The Maryland Public Service Commission (PSC) has completed its investigation of market competition and regulatory policies for the electric industry. The PSC chose a "measured approach," ruling against retail wheeling at this time while permitting, but not requiring, utility proposals for performance-based ratemaking.
The PSC described electricity rates in the state as "globally competitive," noting that Maryland's utilities were not encumbered by a lot of expensive nuclear power plants or high-cost cogeneration contracts. Finding that the conditions needed to ensure a competitive retail market "do not currently exist," the PSC cited numerous unresolved concerns associated with retail competition, including: 1) system reliability, 2) stranded investment, 3) reciprocity in neighboring states, and 4) continued funding for environmental and social goals.
Finding a focus on wholesale competition more prudent, the PSC pledged to open state-jurisdictional transmission facilities to wholesale competitors and to support voluntary power pooling and other forms of utility coordination. It also adopted a competitive bidding policy for all future utility capacity needs to ensure that ratepayers benefit from favorable conditions in the current bulk-power market. Re Electric Services, Market Competition, and Regulatory Policies, Case No. 8678, August 18, 1995 (Md.P.S.C.).
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