As we round out the final states in our blog series identifying unique energy attributes in your state, we return to the location of Corporate United’s recent Road to SYNERGY event. While Maryland was a great host, it is also home to specific, local price drivers that affect the cost of energy across the state.
(To view other posts in this series, click here.)
Maryland has a distinctive mix of electricity generation that has been gradually changing over time, a trend we have seen in some of the other states we have analyzed.
Historically nuclear and coal generation represented the vast majority of net electricity but decreasing natural gas prices and regulatory pressures have created a decline in coal utilization across the United States. Maryland is no exception.
In Maryland, FirstEnergy retired 116 MW of coal generation in 2012. FirstEnergy spokesman, Mark Durbin said at the time that it was more cost effective to retire the plants than to bring them up to federal air-pollution standards. The now-retired plant was granted special permissions to not meet the emission reduction that other plants in the state were ordered to meet, 70-80% reduction. Instead they were capped, angering many environmentalists in the state, who welcomed the closure in 2012. An additional 1,316 MW of coal generation from NRG is planned for retirement in May 2019.
Additionally, Maryland is home to a single nuclear power plant, Calvert Cliffs, which provides 40% of the state’s current net electricity needs. The 1655 MW dual-reactor generating facility has an additional 1,600 MW reactor that has been approved, but not leveraged due to current financial conditions.
Maryland is also notably committed to solar energy. As of 2016 the Maryland Energy Administration reported 508 MW of grid-connected solar energy. This gained Maryland the ranking of 11th in the country. End-use and utility scale solar energy was catalyzed by significant tax credits and incentives. Is your facility due a tax credit or incentive from the Maryland Energy Administration? Find out here.
ELECTRICITY SUPPLIER MIX
In total, there are 98 different retail electricity suppliers registered with the Maryland Public Service Commission. This can make it difficult for procurement to know which supplier will be the best energy partner for their specific facility needs. Corporate United members are able to leverage Trane Building Advantage’s capabilities to identify which, in this surplus of suppliers, will prove to be most competitive and financially sound for your spend management needs. Additionally, procurement will need to understand how to strategically aggregate and source power across PJM in a manner that will achieve your energy spend goals.
NATURAL GAS SUPPLIER MIX
There are fewer active competitive suppliers for natural gas in Maryland as compared to the large amount of electricity suppliers that procurement can choose from and evaluate. This is especially true in the western part of the state, which deals with pipeline constraints.
Regardless of the amount of suppliers, procurement needs to complete a thorough and competitive price evaluation of natural gas options with local service capabilities to determine the best supplier for your facility.
In the past year Maryland has made three large statements regarding their commitment to furthering environmental efforts towards the state’s “smart, green and growing” future.
In March 2017 Maryland increased their Renewable Portfolio Standard from 20% by 2022 to 25% renewable energy production by 2020.
The increase in the Renewable Portfolio Standard had an immediate impact – although not overly significant - on electricity supply prices. Prices went up on the forward strip with the increase in the REC market.
- 2017 : $0.00005/kWh
- 2018 : $0.00005/kWh
- 2019 : $0.00025 - $0.00050/kWh
- 2020 and beyond : $0.00050 - $0.001/kWh
- In April 2016, Gov. Larry Hogan (R) signed into law the Greenhouse Gas Emissions Act, which required a 40% statewide reduction in Greenhouse Gas Emissions from 2006 levels by 2030. This law is expected to help create and maintain tens of thousands of jobs and represents a balanced, science-based approach to reduce carbon pollution.
- In April 2017, Gov. Larry Hogan (R) signed a General Assembly approved ban on hydraulic fracturing for the purpose of fossil fuel extraction. Maryland became the third state to ban fracking, including New York and Vermont. The ban in Maryland was particularly meaningful because of its Marcellus Shale resources, which have created significant financial gains in Pennsylvania and West Virginia.
MARYLAND PRICE DIFFERENCES FROM U.S AVERAGE
INFORMED ENERGY SPENDING
Every state in the US is characterized by different energy attributes making procurement’s ability to optimize energy spend management challenging. As we have discovered in our series, no state is the same and as such, each facility cannot fit into a “one-size-fits-all” energy program. A customized approach is necessary to utilize your spend in the most informed way while working with reliable energy suppliers. Trane Building Advantage, supplier of OMNIA Partners, can make this process easier for you and ensure you are working with the best supplier partner for your requirements while impacting your spend through a program targeted to your specific needs.
Want to spend more efficiently? Watch an on-demand webinar from our partners, the experts at Trane Building Advantage to take a deeper dive into understanding your electricity and natural gas pricing.
OHIO: Understand how to make smarter energy buying decisions in the Buckeye state based on local price drivers.
NEW YORK: Find out how New York’s evolving energy profile affects your cost of energy.
TEXAS: Discover what influences energy pricing in the Lone Star state to appropriately manage your energy spend.
ILLINOIS: Learn how to optimize energy spend management in the home of the Windy City.
PENNSYLVANIA: Optimize Energy Spend in Pennsylvania and Eliminate Energy Guesswork