Maryland Utilities issue request for proposals for supply of wholesale electric power

By Maryland Utilities


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The Potomac Edison Company PE, Baltimore Gas and Electric Company BGE, Delmarva Power, and Pepco have issued Requests for Proposals RFPs for full-requirements, wholesale electric power supply to meet their Standard Offer Service SOS obligations in their Maryland service territories.

Each utility will provide market-based supply service to some or all of its electric customers who do not take service from competitive retail suppliers. The RFPs will consist of supply contracts ranging in term from three to twenty-four months.

For BGE, Delmarva Power, and Pepco, the bidding for Residential contracts will occur in two procurements – October 2015 and April 2016, and the contract term will be twenty-four months. For PE, the bidding for Residential contracts will occur in four procurements – October 2015, January, April, and June 2016, and the contract term will range from twelve to twenty-four months.

For BGE, the bidding for small commercial Type I contracts will occur in two procurements – October 2015 and April 2016, and the contract term will be twenty-four months. For Delmarva Power and Pepco, the bidding for small commercial Type I, is combined with Residential contracts and will occur in two procurements – October 2015 and April 2016, and the contract term will be for twenty-four months.

For PE, the bidding for small commercial Type I contracts will occur in two procurements – October 2015 and January 2016, and the contract term will be twenty-four months. For all the Maryland Utilities, the bidding for larger commercial Type II contracts will be for three-month term contracts and will occur quarterly.

The quarterly procurements will occur in October 2015, January, April and June 2016. Further details regarding the procurement schedule, including the bid due dates for this multi-procurement process can be found in the RFP documents. The four utilities will concurrently conduct their bidding processes under uniform rules and timetables.

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B.C. electricity demand hits an all-time high

BC Hydro Peak Electricity Demand reached a record 10,902 megawatts during a cold snap, driven by home heating. Peak hours surged; load shifting and energy conservation can ease strain on the grid and lower bills.

 

Key Points

Record winter peak of 10,902 MW, set during a cold snap, largely from home heating demand at peak hours.

✅ All-time high load: 10,902 MW between 5 and 6 p.m., Dec. 27.

✅ Cold snap increased home heating demand during peak hours.

✅ Shift laundry and dishwashers off-peak; use programmable thermostats.

 

BC Hydro says the province set a new record for peak electricity demand on Monday as temperatures hit extreme lows, and Quebec shattered consumption records during similar cold weather.

Between 5 and 6 p.m. on Dec. 27, demand for electricity hit an all-time high of 10,902 megawatts, which is higher than the previous record of 10,577 megawatts set in 2020, and follows a record-breaking year in 2021 for the utility.

“The record represents a single moment in the hour when demand for electricity was the highest yesterday,” says Simi Heer, BC Hydro spokesperson, in a statement. “Most of the increase is likely due to additional home heating required during this cold snap.”

In addition to the peak demand record on Monday, BC Hydro has observed an overall increase in electricity demand since Friday, and has noted that cryptocurrency mining electricity use is an emerging load in the province as well. Monday’s hourly peak demand was 18 per cent higher than Friday’s, while Calgary's electricity use soared during a frigid February, underscoring how cold snaps strain regional grids.

“BC Hydro has enough supply options in place to meet increasing electricity demand,” adds Heer, and pointed to customer supports like a winter payment plan for households managing higher bills. “However, if British Columbians want to help ease some of the demand on the system during peak times, we encourage shifting activities like doing laundry or running dishwashers to earlier in the day or later in the evening.”

BC Hydro is also offering energy conservation tips for people looking to lower their electricity use and their electricity bills, noting that Earth Hour once saw electricity use rise in the province:

Manage your home heating actively by turning the heat down when no one his home or when everyone is sleeping. Consider installing a programmable thermostat to automatically adjust temperatures at different times based on your family's activities, and remember that in warmer months wasteful air conditioning can add $200 to summer energy bills. BC Hydro recommends the following temperatures:

16 degrees Celsius when sleeping or away from home
21 degrees Celsius when relaxing, watching TV
18 degrees Celsius when doing housework or cleaning
 

 

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The Need for Electricity During the COVID-19 Pandemic

US utilities COVID-19 resilience shows electric utilities maintaining demand stability, reaffirming earnings guidance, and accessing the bond market for low-cost financing, as Dominion, NextEra, and Con Edison manage recession risks.

 

Key Points

It is the sector's capacity to sustain demand, financing access, and guidance despite pandemic recession pressures.

✅ Bond market access locks in low-cost, long-term debt

✅ Stable residential load offsets industrial weakness

✅ Guidance largely reaffirmed by major utilities

 

Dominion Energy (D) expects "incremental residential load" gains, consistent with COVID-19 electricity demand patterns, as a result of COVID-19 fallout. Southern Company CEO Tom Fanning says his company is "nowhere near" a need to review earnings guidance because of a potential recession, in a region where efficiency and demand response can help level electricity demand for years.

Sempra Energy (SRE) has reaffirmed earnings per share guidance for 2020 and 2021, as well timing for the sale of assets in Chile and Peru, and peers such as Duke Energy's renewables plan have reaffirmed capital investments to deliver cleaner energy and economic growth. And Xcel Energy (XEL) says it still "hasn’t seen material impact on its business."

Several electric utilities have demonstrated ability to tap the bond market, in line with utility sector trends in recent years, to lock in low-cost financing, as America moves toward broader electrification, despite ongoing turmoil. Their ranks include Dominion Energy, renewable energy leader NextEra Energy (NEE) and Consolidated Edison (ED), which last week sold $1 billion of 30-year bonds at a coupon rate of just 3.95 percent.

It’s still early days for US COVID-19 fallout. And most electric companies have yet to issue guidance. That’s understandable, since so much is still unknown about the virus and the damage it will ultimately do to human health and the global economy. But so far, the US power industry is showing typical resilience in tough times, as it coordinates closely with federal partners to maintain reliability.

Will it last? We won’t know for certain until there’s a lot more data. NextEra is usually first to report its Q1 earnings reports and detailed guidance. But that’s not expected until April 23. And companies may delay financials further, should the virus and efforts to control it impede collection and analysis of data, and as they address electricity shut-off risks affecting customers.

 

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Why Canada should invest in "macrogrids" for greener, more reliable electricity

Canadian electricity transmission enables grid resilience, long-distance power trade, and decarbonization by integrating renewables, hydroelectric storage, and HVDC links, providing backup during extreme weather and lowering costs to reach net-zero, clean energy targets.

 

Key Points

An interprovincial high-voltage grid that shares clean power to deliver reliable, low-cost decarbonization.

✅ Enables resilience by sharing power across weather zones

✅ Integrates renewables with hydro storage via HVDC links

✅ Lowers decarbonization costs through interprovincial trade

 

As the recent disaster in Texas showed, climate change requires electricity utilities to prepare for extreme events. This “global weirding” is leaving Canadian electricity grids increasingly exposed to harsh weather that leads to more intense storms, higher wind speeds, heatwaves and droughts that can threaten the performance of electricity systems.

The electricity sector must adapt to this changing climate while also playing a central role in mitigating climate change. Greenhouse gas emissions can be reduced a number of ways, but the electricity sector is expected to play a central role in decarbonization, including powering a net-zero grid by 2050 across Canada. Zero-emissions electricity can be used to electrify transportation, heating and industry and help achieve emissions reduction in these sectors.

Enhancing long-distance transmission is viewed as a cost-effective way to enable a clean and reliable power grid, and to lower the cost of meeting our climate targets. Now is the time to strengthen transmission links in Canada, with concepts like a western Canadian electricity grid gaining traction.


Insurance for climate extremes
An early lesson from the Texas power outages is that extreme conditions can lead to failures across all forms of power supply. The state lost the capacity to generate electricity from natural gas, coal, nuclear and wind simultaneously. But it also lacked cross-border transmission to other electricity systems that could have bolstered supply.

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Long-distance transmission offers the opportunity to escape the correlative clutch of extreme weather, by accessing energy and spare capacity in areas not beset by the same weather patterns. For example, while Texas was in its deep freeze, relatively balmy conditions in California meant there was a surplus of electricity generation capability in that region — but no means to get it to Texas. Building new transmission lines and connections across broader regions, including projects like a hydropower line to New York that expand access, can act as an insurance policy, providing a back-up for regions hit by the crippling effects of climate change.

A transmission tower crumpled under the weight of ice.
The 1998 Quebec ice storm left 3.5 million Quebecers and a million Ontarians, as well as thousands in in New Brunswick, without power. CP Photo/Robert Galbraith
Transmission is also vulnerable to climate disruptions, such as crippling ice storms that leave wires temporarily inoperable. This may mean using stronger poles when building transmission, or burying major high-voltage transmission links, or deploying superconducting cables to reduce losses.

In any event, more transmission links between regions can improve resilience by co-ordinating supply across larger regions. Well-connected grids that are larger than the areas disrupted by weather systems can be more resilient to climate extremes.


Lowering the cost of clean power
Adding more transmission can also play a role in mitigating climate change. Numerous studies have found that building a larger transmission grid allows for greater shares of renewables onto the grid, ultimately lowering the overall cost of electricity.

In a recent study, two of us looked at the role transmission could play in lowering greenhouse gas emissions in Canada’s electricity sector. We found the cost of reducing greenhouse gas emissions is lower when new or enhanced transmission links can be built between provinces.

Average cost increase to electricity in Canada at different levels of decarbonization, with new transmission (black) and without new transmission (red). New transmission lowers the cost of reducing greenhouse gas emissions. (Authors), Author provided
Much of the value of transmission in these scenarios comes from linking high-quality wind and solar resources with flexible zero-emission generation that can produce electricity on demand. In Canada, our system is dominated by hydroelectricity, but most of this hydro capacity is located in five provinces: British Columbia, Manitoba, Ontario, Québec and Newfoundland and Labrador.

In the west, Alberta and Saskatchewan are great locations for building low-cost wind and solar farms. Enhanced interprovincial transmission would allow Alberta and Saskatchewan to build more variable wind and solar, with the assurance that they could receive backup power from B.C. and Manitoba when the wind isn’t blowing and the sun isn’t shining.

When wind and solar are plentiful, the flow of low cost energy can reverse to allow B.C. and Manitoba the opportunity to better manage their hydro reservoir levels. Provinces can only benefit from trading with each other if we have the infrastructure to make that trade possible.

A recent working paper examined the role that new transmission links could play in decarbonizing the B.C. and Alberta electricity systems. We again found that enabling greater electricity trade between B.C. and Alberta can reduce the cost of deep cuts to greenhouse gas emissions by billions of dollars a year. Although we focused on the value of the Site C project, in the context of B.C.'s clean energy shift, the analysis showed that new transmission would offer benefits of much greater value than a single hydroelectric project.

The value of enabling new transmission links between Alberta and B.C. as greenhouse gas emissions reductions are pursued. (Authors), Author provided
Getting transmission built
With the benefits that enhanced electricity transmission links can provide, one might think new projects would be a slam dunk. But there are barriers to getting projects built.

First, electricity grids in Canada are managed at the provincial level, most often by Crown corporations. Decisions by the Crowns are influenced not simply by economics, but also by political considerations. If a transmission project enables greater imports of electricity to Saskatchewan from Manitoba, it raises a flag about lost economic development opportunity within Saskatchewan. Successful transmission agreements need to ensure a two-way flow of benefits.

Second, transmission can be expensive. On this front, the Canadian government could open up the purse strings to fund new transmission links between provinces. It has already shown a willingness to do so.

Lastly, transmission lines are long linear projects, not unlike pipelines. Siting transmission lines can be contentious, even when they are delivering zero-emissions electricity. Using infrastructure corridors, such as existing railway right of ways or the proposed Canadian Northern Corridor, could help better facilitate co-operation between regions and reduce the risks of siting transmission lines.

If Canada can address these barriers to transmission, we should find ourselves in an advantageous position, where we are more resilient to climate extremes and have achieved a lower-cost, zero-emissions electricity grid.

 

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Portsmouth residents voice concerns over noise, flicker generated by turbine

Portsmouth Wind Turbine Complaints highlight noise, shadow flicker, resident impacts, Town Council hearings, and Green Development mitigation plans near Portsmouth High School, covering renewable energy output, PPAs, and community compliance.

 

Key Points

Resident reports of noise and shadow flicker near Portsmouth High School, prompting review and mitigation efforts.

✅ Noise exceeds ambient levels seasonally, residents report fatigue.

✅ Shadow flicker lasts up to 90 minutes on affected homes.

✅ Town tasks developer to meet neighbors and propose mitigation.

 

The combination of the noise and shadows generated by the town’s wind turbine has rankled some neighbors who voiced their frustration to the Town Council during its meeting Monday.

Mark DePasquale, the founder and chairman of the company that owns the turbine, tried to reassure them with promises to address the bothersome conditions.

David Souza, a lifelong town resident who lives on Lowell Drive, showed videos of the repeated, flashing shadows cast on his home by the three blades spinning.

“I am a firefighter. I need to get my sleep,” he said. “And now it’s starting to affect my job. I’m tired.”

Town Council President Keith Hamilton tasked DePasquale with meeting with the neighbors and returning with an update in a month. “What I do need you to do, Mr. DePasquale, is to follow through with all these people.”

DePasquale said he was unaware of the flurry of complaints lodged by the residents Monday. His company had only heard of one complaint. “If I knew there was an issue before tonight, we would have responded,” he said.

His company, Green Development LLC, formerly Wind Energy Development LLC, installed the 279-foot-tall turbine near Portsmouth High School that started running in August 2016, as offshore developers like Deepwater Wind in Massachusetts plan major construction nearby. It replaced another turbine installed by a separate company that broke down in 2012.

In November 2014, the town signed an agreement with Wind Energy Development to take down the existing turbine, pay off the remaining $1.45 million of the bond the town took out to install it and put up a new turbine, amid broader legal debates like the Cornwall wind farm ruling that can affect project timelines.

In exchange, Wind Energy Development sells a portion of the energy generated by the turbine to the town at a rate of 15.5 cents per kilowatt hour for 25 years. Some of the energy generated is sold to the town of Coventry.

“We took down (the old turbine) and paid off the debt,” DePasquale said, noting that cancellations can carry high costs as seen in Ontario wind project penalties for scrapping projects. “I have no problem doing whatever the council wants … There was an economic decision made to pay off the bond and build something better.”

The turbine was on pace to produce 4 million-plus kilowatt hours per year, Michelle Carpenter, the chief operating officer of Wind Energy Development, said last April. It generates enough energy to power all municipal and school buildings in town, she said, while places like Summerside’s wind power show similarly strong output.

The constant stream of shadows cast on certain homes in the area can last for as long as an hour-and-a-half, according to Souza. “We shouldn’t have to put up with this,” he said.

Sprague Street resident John Vegas said the turbine’s noise, especially in late August, is louder than the neighborhood’s ambient noise.

“Throughout the summer, there’s almost no flicker, but this time of year it’s very prominent,” Vegas added. “It can be every day.”

He mentioned neighbors needed to be better organized to get results.

“When the residents purchased our properties we did not have this wind turbine in our backyard,” Souza said in a memo. “Due to the wind turbine … our quality of life has suffered.”

After the discussion, the council unanimously voted to allow Green Development to sublease excess energy to the Rhode Island Convention Center Authority, a similar agreement to the one the company struck with Coventry, as regional New England solar growth adds pressure on grid upgrade planning.

“This has to be a sustainable solution,” DePasquale said. “We will work together with the town on a solution.”

 

 

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Electricity Demand In The Time Of COVID-19

COVID-19 Impact on U.S. Power Demand shows falling electricity load, lower wholesale prices, and resilient utilities in competitive markets, with regional differences tied to weather, renewable energy, stay-at-home orders, and hedging strategies.

 

Key Points

It outlines reduced load and prices, while regulatory design and hedging support utility stability across regions.

✅ Load down in NY, New England, PJM; weather drives South up.

✅ Wholesale prices fall 8-10% in key markets.

✅ Decoupling, contracts, hedging support utility earnings.

 

On March 27, Bloomberg New Energy Finance (BNEF) released a report on electricity demand and wholesale market prices impact from COVID-19 fallout. The model compares expected load based largely on weather with actual observed electricity demand changes.

So far, the hardest hit power grid is New York, with load down 7 and prices off by 10 percent. That’s expected, given New York City is the current epicenter of the US health crisis.

Next is New England, with 5 percent lower demand and 8 percent reduced wholesale prices for the week from March 19-25. BNEF says the numbers could go higher following advisories and orders issued March 24 for some 70 percent of the region’s population to stay at home.

Demand on the biggest grid in the US, the PJM (Pennsylvania/Jersey/Maryland), is 4 percent lower, with prices dropping 8 percent, as recent capacity auction payouts fell sharply. BNEF believes there will be more impact as stay at home orders are ramped up in several states.

California’s power demand for March 19-25 was 5 percent below what BNEF’s model expects without COVID-19 impact. That reflects a full week of stay-at-home orders from Governor Newsom issued March 19.

Health officials in Los Angeles and elsewhere expect a spike in COVID-19 cases in coming weeks. But BNEF’s model now actually projects rising electricity load for the state, due to what it calls "freakishly mild weather a year ago."

Rounding out the report, power demand is up for a band of southern states stretching from Florida to the desert Southwest, with weather more than offsetting public response to COVID-19 so far. BNEF says the Northwest’s grid "has not yet been highly impacted," while the Southeast is "generally in line" with pre-virus expectations.

Clearly, all of this data can change quickly and radically. Only California and New York are currently in full shutdown mode. Following them are New England (70 percent), the Midwest (65 percent), Texas (50 percent), PJM (50 percent) and the Northwest (50 percent).

In contrast, only small parts of Florida, the Southeast and Southwest are restricting movement. That could mean a big future increase for shut-ins, with heightened risks of electricity shut-offs that burden households and a corresponding impact on power demand.

Also, weather will play a major role on what happens to actual electricity demand, just as it always does. A very hot summer, for example, could offset virus-related shut-ins, just as it apparently is now in states like Texas. And it should be pointed out that regions vary widely by exposure to recession-sensitive sources of demand, such as heavy industry.

Most important for investors, however, is the built in protection US utility earnings enjoy from declining power demand, even amid broader energy crisis pressures facing the sector. For one thing, US power grids in California, ERCOT (Texas), MISO (Midwest), New England, New York and PJM have wholesale power markets, where producers compete for sales and the lowest bidder sets the price.

In those states, most regulated utilities don’t produce power at all. In fact, companies’ revenue is decoupled entirely from demand in California, as well as much of New England. In the roughly three-dozen states where utilities still operate as integrated monopolies, demand does affect revenue, and in many regions flat electricity demand already persists. But the cost of electricity is passed through directly to customers, whether produced or purchased.

A number of US electric companies have invested in renewable energy facilities as part of broader electrification trends nationwide. These sell their output under long-term contracts primarily with other utilities and government entities.

This isn’t a risk free business: For the past year, generators selling electricity to bankrupt PG&E Corp (PCG) have had their cash trapped at the power plant level as surety for lenders. But even PG&E has honored its contracts. And with states continuing aggressive mandates for renewable energy adoption, growth doesn’t appear at risk to COVID-19 fallout either.

The wholesale price of power from natural gas, coal and many nuclear plants was already sliding before COVID-19, due to renewables adoption and low natural gas prices, even as coal and nuclear disruptions raise reliability concerns. But here too, big producers like Exelon Corp (EXC) and Vistra Energy (VST) have employed aggressive price hedging near term, with regulated utilities and retail businesses protecting long-term health, respectively.

Bottom line: It’s early days for the COVID-19 crisis and much can still change. But so far at least, the US power industry is absorbing the blow of reduced demand, just as it’s done in previous crises.

That means future selloffs in the ongoing bear market are buying opportunities for best in class electric utilities, not a reason to sell. For top candidates, see the Conrad’s Utility Investor Portfolios and Dream Buy List in the March issue. 

 

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Environmentalist calls for reduction in biomass use to generate electricity

Nova Scotia Biomass Energy faces scrutiny as hydropower from Muskrat Falls via the Maritime Link increases, raising concerns over carbon emissions, biodiversity, ratepayer costs, and efficiency versus district heating in the province's renewable mix.

 

Key Points

Electricity from wood chips and waste wood in Nova Scotia, increasingly questioned as hydropower from the Maritime Link grows.

✅ Hydropower deliveries reduce need for biomass on the grid

✅ Biomass is inefficient, costly, and impacts biodiversity

✅ District heating offers better use of forestry residuals

 

The Ecology Action Centre's senior wilderness coordinator is calling on the Nova Scotia government to reduce the use of biomass to generate electricity now that more hydroelectric power is flowing into the province.

In 2020, the government of the day signed a directive for Nova Scotia Power to increase its use of biomass to generate electricity, including burning more wood chips, waste wood and other residuals from the forest industry. At the time, power from Muskrat Falls hydroelectric project in Labrador was not flowing into the province at high enough levels to reach provincial targets for electricity generated by renewable resources.

In recent months, however, the Maritime Link from Muskrat Falls has delivered Nova Scotia's full share of electricity, and, in some cases, even more, as the province also pursues Bay of Fundy tides projects to diversify supply.

Ray Plourde with the Ecology Action Centre said that should be enough to end the 2020 directive.

Ray Plourde is senior wilderness coordinator for the Ecology Action Centre. (CBC)
Biomass is "bad on a whole lot of levels," said Plourde, including its affects on biodiversity and the release of carbon into the atmosphere, he said. The province's reliance on waste wood as a source of fuel for electricity should be curbed, said Plourde.

"It's highly inefficient," he said. "It's the most expensive electricity on the power grid for ratepayers."

A spokesperson for the provincial Natural Resources and Renewables Department said that although the Maritime Link has "at times" delivered adequate electricity to Nova Scotia, "it hasn't done so consistently," a context that has led some to propose an independent planning body for long-term decisions.

"These delays and high fossil fuel prices mean that biomass remains a small but important component of our renewable energy mix," Patricia Jreiga said in an email, even as the province plans to increase wind and solar projects in the years ahead.

But to Plourde, that explanation doesn't wash.

The Nova Scotia Utility and Review Board recently ruled that Nova Scotia Power could begin recouping costs of the Maritime Link project from ratepayers. As for the rising cost of fossil fuels, Ploude noted that the inefficiency of biomass means there's no deal to be had using it as a fuel source.

"Honestly, that sounds like a lot of obfuscation," he said of the government's position.

No update on district heating plans
At the time of the directive, government officials said the increased use of forestry byproducts at biomass plants in Point Tupper and Brooklyn, N.S., including the nearby Port Hawkesbury Paper mill, would provide a market for businesses struggling to replace the loss of Northern Pulp as a customer. Brooklyn Power has been offline since a windstorm damaged that plant in February, however. Repairs are expected to be complete by the end of the year or early 2023.

Ploude said a better use for waste wood products would be small-scale district heating projects, while others advocate using more electricity for heat in cold regions.

Although the former Liberal government announced six public buildings to serve as pilot sites for district heating in 2020, and a list of 100 other possible buildings that could be converted to wood heat, there have been no updates.

"Currently, we're working with several other departments to complete technical assessments for additional sites and looking at opportunities for district heating, but no decisions have been made yet," provincial spokesperson Steven Stewart said in an email.

 

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