Taking Control Of Our Energy Future
Maryland Association of Counties Keynote Address
August 16, 2008
Thank you very much. It is good to be with all of you again in Ocean City. On behalf of everyone inthe O’Malley-Brown Administration, I thank you so very much for your hard work, your partnership, and your support for the important and shared work of advancing the common good of the people of Maryland.
I want to say a word of thanks and congratulations to David Bliden who is moving on after 17 proud years at the helm of MACO. David is the longest serving Executive Director in this organization’s history, and he’s left a positive mark not only on MACO but really on the future of our State.
I know this has been a bittersweet year for all of us who are part of this extended MACO family. We had to say a very sad goodbye to Becky Black, who passed away after a courageous battle with cancer. Becky was such an important part of MACO and she cared deeply about the people of our State.
We were also deeply saddened by the loss of Marilyn Praisner, who during her years on the Montgomery County Council had become somewhat of a MACO Icon. Marilyn, of course, served as MACO President in 2003, a position she served with honor and vigor – always leading from the front, always pushing us to do better.
Introduction: Securing Our Energy Future
During this past year, we have been able to make some real and steady progress on those goals that unite us, those goals that we share: to strengthen and grow our middle class and our family-owned businesses and family farms; to improve public safety and public education in every part of our State; and to expand opportunity; the opportunity to learn, the opportunity to earn, the opportunity to enjoy the health of the people that we love as well as the health of this environment that we love to more people rather than fewer.
That’s our mission statement. And we’ve been making solid progress towards all those goals:
- Creating the Chesapeake Bay Trust Fund, which will ramp up to $50 million this year.
- Using every dollar of Program Open Space for open space.
- Quadrupling the amount of money that we invest in the cover crop program.
- Passing the most sweeping foreclosure prevention legislation of any State in the nation. Let’s not forget having done away with the ground rents. Let's also not forget that we became the first State to pass the Living Wage Act, the very first one in the country.
- Providing record funding this year for investments in public education. We’ve increased by 350 percent -- even in tough times -- what we invest in school construction and school renovation.
- Yes, to strengthen and grow the ranks of our middle class. Yes, to improve public safety and public education. Yes, to expand opportunity to more people.
But today I wanted to talk to you about an admittedly complex issue which stands directly in the path of our progress as a State, our progress as a nation, and really our progress as a civilized people who share this increased problem on this globe.
I want to talk with you about our energy future, particularly I want to talk to you about our energy future as it relates to electricity supply and demand here in Maryland. And I want to talk with you, also, about the things that we must do together in order to secure a more affordable and a more renewable energy future for our State.
Free markets alone will not secure that future. If we want a more secure, more renewable, and more affordable energy future, then there are things that we must do together to bring about that stronger future that we prefer.
Fighting Every Battle On The Public’s Behalf
You know, the professional ice hockey great, Wayne Gretzky, once declared, “You miss one hundred percent of the shots that you don’t take.” Well, for four years the consumers of Maryland did not have a Public Service Commission or an Administration that was willing to take the shots that needed to be taken for them. And as a result, energy company profits trumped the public interest for four critical years.
Those years are gone, they’re behind us and they are over. And while we have not been able to undo all the damage of four years of inaction, for the last 17 months of the O’Malley-Brown administration we have been taking every shot that we can on behalf of the consumers of Maryland and businesses.
Some of these battles we have lost and some of these battles we have won, but every day we fight, and we fight for the public interest of the people of our State. And that is what we are going to continue to do, sparing no expense, retaining any expert, hiring whatever legal resources the public’s case requires, and recruiting our neighbors in other States whenever possible in order to stand up for the public interest, especially in these challenging times, in our fight for a more affordable and secure energy future.
So far we have been able to recover $2 billion dollars for consumers, which was the largest settlement of its kind in U.S. history.
So far, we have also won a major victory with federal regulators, ending unfair practices that added $85 million a year in costs to our energy bills.
So far we have successfully fought to strike down rules that were allowing generators to charge above market prices.
In just 17 months, we’ve been able to successfully assemble and lead a coalition of four States, consumer advocates, industrial users, municipal power companies and co-ops in a $12 billion complaint with federal regulators against overcharges that the citizens of our State and others, for generation incentives that are only serving to juice the profits of generation holding companies and not really incentivizing new generation.
But we are by no means out of the woods. The road ahead is going to be far more challenging. It’s going to be far more challenging even than that jolt we suffered when we moved from regulated markets to deregulated markets without a clutch and without a functional Public Service Commission.
Our Challenges: What We’ve Learned
The first step in this long battle was, of course, taking control and restoring the professionalism of own Public Service Commission. Restoring its professionalism, its competence, and its ability to defend the public interest in matters relating to energy regulation.
With new and professional leadership at the Public Service Commission and at the Maryland Energy Administration, we’ve been able to learn -- in some cases for the first time -- the true scope of the challenges that we face. And as a result, today we have a clearer understanding of the very difficult challenges that lay ahead of us:
We learned the laissez-faire, “hands-off,” “let the markets work,” “we’re-pro-business-what-do-you-expect” approach that was pushed by the energy lobby, the old Public Service Commission, and the former administration failed us in Maryland. It failed us badly, even as it allowed for record profits for big energy companies.
We also learned that no new power plants of any size have been built in our State for decades. Even as our economy grew, even as we added new homes, new schools, new businesses and new growth, the market didn’t respond as many had promised and all of us had hoped.
We learned that our demand for energy is greatly outpacing our supply. We learned that we are now importing nearly one third of our electricity because we don’t have the local generating capacity to meet our needs, and we rely increasingly on major transmission lines from the west to keep the lights on in Maryland.
We learned that we now face the prospect of brown-outs and rolling black-outs by 2011, as the existing transmission lines become overloaded on hot summer days.
We learned that foolish pricing policies for buying electricity pursued under the former do-nothing PSC -- like allowing 100 percent of BGE’s electricity needs to be purchased at a time when the market was its very highest -- after hurricanes Katrina and Rita -- only made existing market conditions worse for consumers
And we learned that even in the best circumstances, the wholesale market the utilities use to purchase their electricity isn’t set up with the best interests of consumers in mind. Instead, it is set up for the benefits of big energy generating holding and trading companies.