Pepco, Delmarva Ask Maryland PSC to Consider Utility-Owned Generation

Pepco and Delmarva Power have informed the Maryland PSC that they may petition for reconsideration of PSC's decision to issue an RFP for up to 1,500 MW of new generation under long-term contracts, stating that the PSC should consider utility-built generation to meet any identified capacity needs.

In a letter to the PSC, the Pepco Holdings utilities said that it was unclear if the Commission's notice issuing the RFP constituted final action subject to judicial review. The utilities sought guidance from PSC on this issue, and reserved the right to file a formal petition for reconsideration if no clarification on the reviewability of the RFP notice is provided.

The utilities reiterated their belief that, "Maryland's deregulated generation market produces reliable electric supply at reasonable prices for the Companies' Standard Offer Service customers."

However, noting the PSC's preliminary finding that new generation is needed, the Pepco companies primarily wished to reiterate their position, communicated earlier in Case 9214, that if mandated new generation is in the public interest, "Maryland's electricity consumers would be better served by utility-owned generation rather than long-term PPAs."

The Pepco utilities said that, "utility-owned generation would provide all of the benefits of contracted merchant generation, as well as the important additional benefit of being available to the customers who financed it on a cost basis, rather than market basis, for the entire life of the project."

The utilities cited the above-market costs of the contracts with Panda Brandywine and AES Warrior Run, signed pursuant to PURPA, as a risk from PPAs.

The utilities further said that the PSC should consider new transmission facilities and demand-side management programs for capacity needs.

As noted today (see related story), the Maryland utilities have issued the RFP for new generation as directed.