At a meeting Sept. 9, the Berlin Mayor and Council heard a presentation by Electric Utility Director Tim Lawrence on the upcoming increases to Maryland consumers’ electricity rates.
A Berlin electric truck is pictured.
File photo
By Tara Fischer, Staff Writer
At their Monday, Sept. 9 meeting, the Berlin Mayor and Council heard a presentation by Electric Utility Director Tim Lawrence on the upcoming increases to Maryland consumers’ electricity rates.
Lawrence spoke to an Aug. 14 press release issued by the Maryland Office of People’s Counsel that claims customers will “face average annual electricity bill increases of hundreds of dollars in the coming years because of problems in the regional market run by PJM Interconnection, LLC…”
According to Lawrence, PJM is the independent system operator regional transmission organization that runs the electric transmission system for various states, including the District of Columbia, Pennsylvania, Maryland, New Jersey, Delaware, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, Virginia, and West Virginia. The company coordinates the movement of electricity from generators to local utilities, and the local utilities then distribute the power to customers.
In reference to the press release, Lawrence said that it is a “report that is saying for the next four years, starting at the end of 2025 and up until 2030, we are looking at rate increases” and that the MOPC is blaming PJM for the hikes.
“Customers are facing massive rate increases from potential retirements of old and uneconomic fossil fuel power plants—potential retirements that were entirely foreseeable and that PJM should have planned for,” Maryland People’s Counsel David S. Lapp said in the release. “Customers will bear the brunt of PJM’s planning failures and other dysfunctional market rules, while generation companies will walk away with record profits.”
Lawrence argued that PJM is not solely responsible for the rate increases and maintained that the mandated closure of coal-fired plants will in part cause the rise in consumer prices. According to the utility director, 50% of the plants have already been shut down, and the ones remaining will be gone by 2040.
The required closures, part of an effort to halt climate change caused by fossil fuel energy sources, will be replaced with wind and solar power. Lawrence said these projects cannot be built fast enough to keep up with mandates, and many are still in the planning phase or being ironed out in the court system.
While the alternative energy source providers get worked out, “We’re going to have to pay higher capacity charges to guarantee the power is going to flow to each state, each municipality, each power provider,” the director said.
Lawrence adds that the proposed Ocean City wind farm, for instance, has been in the works for years and continues to receive opposition.
The utility director said that a silver lining of the situation is that Berlin has peak shaving at its generation power plant located on William Street that will offset capacity charges.
Peak shaving is a cost-saving strategy employed by companies that involve quickly reducing power consumption during intervals of high demand. Lawrence said that for this past year, summer peaking in Berlin had saved approximately $680,000.
Still, the utility director said residential customer rates are projected to increase by about $250 a year starting in June 2025. The true impact of Berlin’s utility rate will take time to determine. It’s a “wait-and-see” approach, Lawrence said Monday night.
“For the period from June 2025 to May 2026, PJM pays generators, which produces the power for the grid, $14.7 billion annually, which will be collected from customers in the PJM region,” Lawrence said.