When the owner of two fossil fuel-burning power plants in Anne Arundel County made surprise plans last year to close them by mid-2025, the regional electric grid operator decided they needed to stay open until at least 2028 to ensure reliable electricity supplies throughout Maryland.
But a plan advanced by power plant owners Brandon Shores and H.A. Wagner to keep them open would unfairly burden customers of Baltimore Gas & Electric and other state utilities, opponents say, including the state agency that represents taxpayers, state utility regulators and one of the least. Of those facilities.
The Office of the People’s Counsel, which represents utility customers, said in a federal filing last week that Houston-based Talen Energy Corp.’s proposed cost recovery plan would amount to about $215 million annually. About three-quarters of that amount will fall to BGE customers, who make up the largest share of consumers served, while the rest will be borne by customers of Pepco, Southern Maryland Electric Cooperative and others, OPC said.
The payment arrangements could add an estimated $5 a month, above already approved rate increases, to BGE customers’ bills for as long as it takes regional electric grid operator PJM to build new transmission lines to prevent electrical system failures.
The NPC says Talen Energy’s proposal would lead to unfair and unreasonable prices being charged to cover old investments that the plants never expected to recover. The Southern Maryland Electric Cooperative has joined the NPC in protesting before the Federal Energy Regulatory Commission, which must approve Tallinn’s request. The Maryland Public Service Commission objected in a separate filing.
Talen Energy has notified PJM, which serves Maryland, 13 other states and Washington, that it plans to deactivate Wagner and Brandon Shores effective June 1, 2025. Restrictions on the operation of oil-burning units have made operations at Wagner unsustainable, while plans to convert Brandon Shores’ transition from coal to burning oil didn’t make economic sense, the owner told PJM.
Plans were announced more than two years ago to convert these plants from burning coal to burning mostly oil.
But PJM doesn’t expect to complete the nearly $800 million transmission upgrade to make up for the closing of the two plants until 2028. Those plants generate about 2,000 megawatts, a significant portion of the state’s electric power.
PJM sought what is known as a “reliability must manage” arrangement with Tallinn over the plants, which Susan Buehler, a PJM spokeswoman, described in an email as “a last resort to bridge the gap between the scheduled retirement date of a generating unit and the completion of projects needed to maintain system reliability.”
David Lapp, Maryland’s People’s Counsel, said Tallinn’s proposal came about largely due to a lack of planning by PJM.
“These plants have been uneconomical for some time, they are old… and they are subject to ever-tightening environmental regulations, so their retirement was expected and should have been planned,” Lapp said in an interview on Monday. “Clients bear the consequences of failing to plan ahead.”
PJM officials responded that Tallinn planned to convert Brandon Shores to oil, and said they were not aware of plans to close that plant until last April.
“It is not unreasonable to expect PJM to anticipate the imminent inactivation of the Brandon Shores units when numerous public statements and direct conversations between PJM and Talen supported the idea that Brandon Shores was on track to stay online, albeit using a different fuel,” Manu Asthana said. “Source” , president and CEO of PJM, in a December letter to officials at the Maryland chapter of the Sierra Club.
In an April 18 filing with the Federal Commission, representatives of each of Tallinn’s power plants outlined the terms, conditions and cost-based rates under which the plant operators would agree to continue operating the units from the deactivation date of June 1, 2025 until the end of 2025. 2028.
“Continued plant operations are no longer economically viable, and Talen has met all regulatory requirements for plant closures,” the company said in the filing. “But for reliability reasons, PJM asserts that keeping these plants operational is essential to keeping the lights on in Baltimore. … Tallinn is committed to working with the parties to keep the plants running until a reliable alternative can be implemented.”
Talen has been in talks with PJM for nearly a year to resolve reliability concerns in BGE’s service area. A PJM study conducted more than four years ago showed that the state’s phaseout of coal-fired power plants, including Brandon Shores and H.A. Wagner, would result in “infrastructure overload for seven existing transmission facilities in the region,” according to the prepared study. to state legislators and was cited in Talen’s FERC filing.
“Talen, Brandon Shores and Wagner should not be required to (operate the plants) without fully recovering all costs, investments necessary to maintain the plants, and a fair return on equity,” Talen’s filing said.
Lapp called the proposed $215 million-a-year payment arrangement “significantly excessive” since some of the plant’s costs had already been reduced, and said the plant operator was “trying to revive those costs and seize them from captive utility customers.”
Representatives for Talen did not respond to requests for comment.
The NPC said Tallinn’s request could encourage other energy companies to retire their plants prematurely and try to recover costs that have long been written off as unrecoverable from “captive” utility customers. LAP also says it could take much longer than the next four and a half years to build new transmission lines, which could make any arrangement with Tallinn more expensive.
The Maryland Public Service Commission also objects to Tallinn’s proposal, saying it should be rejected because Brandon Shores and Wagner “did not propose fair and reasonable compensation for the proposed service.”
The commission raised concerns about Talen’s ability to operate the Brandon Shores plant due to restrictions in an agreement with the Sierra Club and the need for permit extensions from the state. She added that Tallinn could end up receiving compensation for three years without any obligation to operate the plants, an outcome that would be “unfair, unreasonable and not in the public interest.”
(Tags for translation)Power plants in Anne Arundel County
