Guest Post by Geoffrey Pohanka. Originally posted at RealClearEnergy, reposted with permission.
Editors’ Note: Progressive politicians blame grid operators and data centers for rising electricity costs, but they are misleading the public. It is increasingly clear that over-penetration of renewables like wind and solar, while shutting down reliable, affordable electricity sources, all in the name of net-zero, has resulted in climbing electric bills. Climate Realism has discussed this effect both at the state level, as well as internationally.
Progress and Progress(ive)…. two words with somewhat similar spelling but with entirely different meanings. I asked Grok to help identify the distinctions. Progress… a forward movement, advancement, or improvement over time. It’s about actual results or the process of getting better. Progressive…..favoring or promoting reform, change, and new ideas (especially social or political change), happening gradually or in stages…..supporting “progress’ as an ideology.
There may be no better way to illuminate the difference between the two than with energy policies in the State of Maryland. There is not much disagreement that electricity prices are rapidly increasing but there isn’t much agreement as to the causes. Maryland residential electricity rates have risen 50.9% in the past five years. Maryland Governor Wes Moore, as well as other blue state governors, place blame for rising electricity prices on utility profiteering and their ‘double dipping’ on energy infrastructure projects. He blames the PJM grid operator and data centers “as the largest single driver of capacity prices “. The Maryland legislature, in an attempt to slow the rate of increases, has even capped the compensation for utility executives. To give citizens relief, state officials passed the Utility Relief Act which will rebate $150 towards the cost of electricity (which essentially gives the people back their own tax dollars).
Increasing demand for electricity, and including from Data Centers, is indeed causing a power shortage and rising electricity prices. But are there other important factors that some politicians are conveniently failing to consider, such as state government regulations that are contributing to the shortage of reliable power supply? What about the impact on supply from decarbonization policies designed combat climate change and the push for an all-electric economy, requiring electric cars, electric buildings, and electric heating. Maryland passed the Climate Solutions Now Act of 2022 mandates a 60% reduction in state greenhouse gas emissions from 2006 levels by 2031 and net-zero emissions by 2045. Other legislation requires all electric heating in larger buildings.
Maryland also wants to phase out natural gas and oil heating and replace them with electric heat pumps. Maryland is also a member of RGGI, the Regional Greenhouse Gas Initiative, which is a carbon tax on fossil fuel power plant emissions. According to a Baltimore Sun article, RGGI fees in 2024 were equivalent to a 44% tax on Maryland fossil fuel plant revenues, a cost which cannot be passed onto utility customers due to MD’s deregulation of the power industry that prevents common ownership of power generation and distribution. The current RGGI auction price of $35 per ton of CO2 emissions is equivalent to an annual tax of $100 million dollars for a 1GW natural gas power plant. The combination of decarbonization policies and RGGI fees have made many fossil fuel power plants (and especially coal power plants) uneconomic to operate and to voluntarily close. Maryland has lost a significant amount of in-state energy generation since 2018 and now imports 43% of its electricity from neighboring Pennsylvania (natural gas, nuclear, and coal) and West Virginia (coal). The imported electricity is equivalent to Maryland’s entire residential electricity consumption. To meet the net-zero emission goal, “many, if not all, of MD fossil fuel power plants may need to retire earlier than planned”. The shortage of in-state energy generation is not limited to Maryland, it is also found in VA, DC, DE, OH, and NJ. All are within the PJM grid.
Maryland has indeed reduced in-state carbon emissions, which is celebrated by progressives, but how can moving these emissions across the state border be considered actual progress? Imported electricity costs more and often pollutes more. Due to increased demand for electricity, Maryland has expensive plans to import even more power from neighboring states. Three new power lines are in the planning stages, the Mid-Atlantic Resiliency Link, the Piedmont Reliability Project, and the Tri-Country Transmission Upgrade. These lines will cost Maryland utility customers billions and only add to the dependence on neighboring states. In fact, one of the power lines will result in less in-state power generation since the imported electricity is required for the closure of the Brandon Shores (coal) and Wagner (oil) power plants in Baltimore than have a combined capacity of 2.1 GW. Progressives want to close the last Maryland coal fired power plant and have kneecapped the oil fired Wagner power plant, allowing it to operate only up to 5% of the time. This over reliance on imported electricity is one reason why electricity transmission costs are rising significantly faster than the cost of energy generation.….Increasing reliance on imported power incurs higher transmission and congestion fees.
Governor Moore does support an increase in in-state energy generation but his primarily focus is on offshore wind, solar energy, and battery storage. The large offshore wind project off the Maryland Atlantic coastline has faced significant opposition from the shore community and is likely not going to be built anytime soon. Solar energy is only given a less than 7% reliability factor by the PJM grid operator. Wind and solar energy are intermittent power sources and are very unreliable without expensive battery backup. The combination of wind and solar power with battery backup is one of the most expensive sources of electricity generation. Maryland will have to act soon to find more sources of reliable electricity because utilities are warning that the state could suffer a voltage collapse and rolling blackouts by the Summer of 2027.
Geoffrey Pohanka, Chairman, Pohanka Automotive Group, Capitol Heights MD.
Originally posted at RealClearEnergy, reposted with permission.
