O'Malley Holds Summit to Help Develop State Policy

Maryland Gov. Martin O'Malley, facing political fallout from soaring electricity prices, convened 250 utility industry officials, experts and lawmakers yesterday to start to map a path that would reduce the state's energy use and generate more power.

Citing higher gasoline prices, increased demand for electricity and alarm over climate change caused by emissions from coal-fired plants, O'Malley called the creation of energy policy "a moral challenge of our time."

"These are not just kitchen-table issues," the governor said as his energy summit got underway in the state Senate building in Annapolis. "They're life-and-death issues for our planet. Maryland is on a dangerous and unsustainable path of consumption."

The four-hour meeting came as O'Malley attempts to take ownership of the state's energy policy. He has pledged to curb Maryland's consumption by 15 percent by 2015.

He traveled to Frederick last week to watch a solar panel manufacturer break ground on a $97 million expansion. A few weeks before, he stood next to a solar panel on the roof of a state building in Annapolis to present conservation measures for state government, including the use of energy-efficient air conditioners and fluorescent light bulbs. And he announced a fund to help low-income residents pay their electric bills.

Maryland's electricity rates, at 10 cents per kilowatt hour, are among the highest in the Washington region and above the national average, officials said yesterday. As consumption has climbed with development, state lawmakers have moved to cut emissions from car tailpipes and smokestacks and require that electricity come from renewable sources such as solar and wind.

But recent deregulation of the state's electricity markets has resulted in rising bills and a backlash from consumers rather than the competition it was intended to create. Pepco customers were hit with a 39 percent rate increase last year. Baltimore Gas and Electric Co. raised its prices by 50 percent July 1, after a 15 percent increase last summer. O'Malley made the rate increases a centerpiece of his campaign against then-Gov. Robert L. Ehrlich Jr. (R) last fall but said this spring that he had no authority to roll back the increases.

"The people of our state have a right to know that they are not being gouged," O'Malley said in opening yesterday's meeting. "No doubt there are questions about why profits are being enjoyed by some while others are taking it on the chin."

He has asked state regulators to investigate whether the relationship between BGE and its corporate parent contributed to higher rates and to consider whether the parent company, Constellation Energy Group, should be broken up. State regulators have subpoenaed numerous corporate records from Constellation, said LaWanda Edwards, a spokeswoman for the Public Service Commission.

But the summit focused on supply and demand: how to create incentives for consumers and utilities to use less power and to send more electricity through Maryland's congested transmission grid. Malcolm Woolf, the governor's chief energy adviser, called the event a first step toward developing a strategy that could include executive orders, legislative proposals or, possibly, new controls on utility companies.

Maryland imports 28 percent of its electricity from other states, and its transmission lines are operating at capacity. Two power companies are proposing to build a high-voltage line that would stretch across Western Maryland and end near the Montgomery County line. New power generation could lower costs to consumers. The $1.8 billion line, which would be the highest capacity transmission line in the nation, would probably attract opposition from residential areas.

Maryland relies on coal-fired and nuclear power for most of its electricity needs, and half of its coal-fired plants are losing efficiency with age. A Silver Spring company announced plans this week to build a natural gas plant in Charles County.

On the demand side, a panel of experts pondered yesterday whether the state, customers or the utilities should fund conservation programs that would reduce electricity consumption but might be expensive. One strategy, called smart meters, appealed to state officials: It would allow consumers to pay less if they use electricity at off-peak times, when there is less pressure on the power grid.

Other possible strategies included a break on the sales tax on fluorescent light bulbs, which burn less electricity than incandescent ones.

Energy policy will be on the administration's agenda today when the Public Service Commission begins two days of hearings to forecast its power needs for the next decade.

"This was very much like going through a table of contents of the challenges in front of us," O'Malley said at the summit's close.

Staff writer John Wagner contributed to this report.