Maryland Governor Wants Wind, Solar Power to Compete With Gas

Maryland Governor Martin O’Malley asked utility regulators who are soliciting bids to build 1,500 megawatts of new power plants to evaluate renewable energy projects and not restrict the process to natural gas.

O’Malley urged regulators to require that proposed budgets for building and operating gas-fired plants include fuel costs, in a letter to the Maryland Public Service Commission.

Regulators have requested bids only for gas plants and developers aren’t required to include the price of the fuel needed to run them. O’Malley, a Democrat, said this makes it difficult to make an “apples to apples” comparison with wind and solar projects.

“While current gas prices are relatively low, there are no guarantees that such prices will continue for the duration of the 20-year purchase agreement,” O’Malley said in yesterday’s letter. “The commission needs to compare the price of natural gas to the price of renewable resources such as wind and solar that are not subject to significant fuel price volatility.”

Maryland utility regulators said last month they would seek proposals for building power plants to meet increasing demand in the state.

O’Malley also wants to lift a ban on utilities submitting bids. He asked the commission to permit utilities owned by Pepco Holdings Inc. (POM) and Baltimore-based Constellation Energy Group Inc. (CEG) to submit bids for generation projects that they would build and operate.

The governor is also seeking concessions from Exelon Corp., a Chicago-based utility holding company that’s pursuing a $7.9 billion takeover of Constellation, which operates Baltimore Gas & Electric Co., Maryland’s largest utility.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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