Restructuring Restructuring and and

Energy Efficiency, Energy Efficiency, Conservation & Demand Conservation & Demand

ResponseResponse

Susan GraySusan Gray

August 26, 2008August 26, 2008

PPRAC MeetingPPRAC Meeting

What else has been happening What else has been happening recently at the PSC?recently at the PSC?

Doug Nazarian replaced Steven Larsen as Doug Nazarian replaced Steven Larsen as Chairman on August 16. Mr. Nazarian served Chairman on August 16. Mr. Nazarian served as PSC General Counsel (since June 2007)as PSC General Counsel (since June 2007)

Restructuring/SB400 – best price/lowest Restructuring/SB400 – best price/lowest cost/least price volatility/maintain reliabilitycost/least price volatility/maintain reliability Case 9117 (IRPs), Case 9149 (RFPs); PC-13Case 9117 (IRPs), Case 9149 (RFPs); PC-13

Energy Efficiency, Conservation & DSMEnergy Efficiency, Conservation & DSM Case 9111 (TAG); PC-12 (EmPwer MD), PC-15 (Utility Case 9111 (TAG); PC-12 (EmPwer MD), PC-15 (Utility

Incentives for EE&C and DR)Incentives for EE&C and DR)

Restructuring-Related CasesRestructuring-Related Cases

Major Elements (PSC has authority to order):Major Elements (PSC has authority to order):• Utilities to build new power plantsUtilities to build new power plants

• Greater electricity supply reliabilityGreater electricity supply reliability• Long-term contracts for power supply (SOS)Long-term contracts for power supply (SOS)

• Could result in construction of new power plants, Could result in construction of new power plants, greater rate stabilitygreater rate stability

• Energy efficiency/conservation as part of supply Energy efficiency/conservation as part of supply portfoliosportfolios

• Integrated Resource Plans (IRPs) to be filed by Integrated Resource Plans (IRPs) to be filed by the utilities in October 2008the utilities in October 2008

Energy Efficiency & Conservation Energy Efficiency & Conservation (EE&C) and Demand Response(EE&C) and Demand Response

Major Considerations:Major Considerations:• Reliability (PJM projects problems as early as Reliability (PJM projects problems as early as

2011/2012)2011/2012)• Increases reliability by reducing load on gridIncreases reliability by reducing load on grid

• Pricing/chargesPricing/charges• How to pay for these programsHow to pay for these programs

• Electricity consumptionElectricity consumption• EmPower MD goal: 15% reduced consumption by 2015EmPower MD goal: 15% reduced consumption by 2015

• Wholesale/retail pricesWholesale/retail prices• Decreased demand means downward pressure on priceDecreased demand means downward pressure on price

• Environmental policiesEnvironmental policies• RGGI/GHG – reductions in emissions; increased priceRGGI/GHG – reductions in emissions; increased price

• EE&C program proposals to be filed by the utilities EE&C program proposals to be filed by the utilities on September 1, 2008.on September 1, 2008.