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Gov. Martin O'Malley, D-Md., has introduced legislation that will apply a "rational re-regulation" policy for energy markets in Maryland moving forward. The legislation will call for re-regulation of electricity markets in the state when the Public Service Commission (PSC) deems it is in the best interest of consumers.

If the legislation passes, the PSC would make decisions regarding electricity supply instead of energy companies and would determine when new energy generation is needed - rather than relying on energy markets to make the determination - which should allow for more development of renewable energy in the state.

"The promise of deregulation - that the free market would drive energy prices down through competition - has failed the people of Maryland," says Malcolm Woolf, director of the Maryland Energy Administration. "Taking control of the decision-making process will ensure that these important matters will be decided in the best interest of consumers."

However, O'Malley stressed the prohibitive cost and risk to taxpayers of returning to full, retrospective re-regulation. The immediate cost of buying back the energy plants from private utilities would be passed on to consumers, thus increasing utility bills.

In addition, $1.5 billion of the $2 billion settlement won by the state from Constellation Energy would be lost, since returning Constellation's nuclear power plants would return to ratepayers the cost of decommissioning them. Buying back these plants could also jeopardize the development of Calvert Cliffs 3 and the thousands of jobs it will create.

SOURCE: Office of Gov. Martin O'Malley


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