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Berlin, Ocean Pines News Worcester County Bayside Gazette Logo Berlin, Ocean Pines News Worcester County Bayside Gazette

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Offshore wind could lower congestion costs across co.

(Sept. 8, 2016) With the only power plant in the county servicing the citizens of Berlin, and only part time at that, transmitting the necessary electric to customers on the lower shore can get costly, but quantifying exactly how much could be saved is not likely to be a line item on anyone’s bill anytime soon.
These costs are already rolled into the kilowatt-hour charges customers see delineated on electric bills.
Paul Rich of U.S. Wind, the company in the process of installing an offshore wind farm near Ocean City, described these costs as a “hidden tax” on lower shore residents. He estimated the costs at $4.25 per bill per individual customer on the lower shore.
Larger customers, like hospitals, pay a great deal more, Rich said.   
“The congestion fees were derived from the Maryland Energy Administration and testimony by PJM before the Public Service Commission, not by me or U.S. Wind,” he said.
PJM Interconnection oversees the wholesale market of electric distribution in whole or part of 13 states, including Maryland, and the District of Columbia.  
Morris Schriem is the Public Service Commission’s senior advisor for PJM matters.
Schriem said he couldn’t quantify the amount congestion costs add to each bill, but said PJM was working within set constraints.
“PJM selects the operator with the lowest cost, and with excessive demand the lines can become congested or clogged,” he said. PJM would then have to go to another operator, possibly at higher cost, to meet the demand.
“There may be certain times or conditions when service is down, and you end up paying more,” he said. “The charge is imposed on the company on behalf of the customer.”
The costs are not yet real-time, Schriem said, but the market is moving that way.
“There is a market for the next day’s generation,” he said.
The only real mechanism for tracking these costs, Schriem said, is through the quarterly and annual reports of PJM.
“Offshore wind operates like a generating facility,” he said — one local to the Ocean City and Worcester County markets, which could potentially lower congestion costs, though factors such as volume of electric produced, the size of the population drawing power and the volatility of the petroleum market among others must be taken into account.
“This is just one aspect of how the market runs and how the grid operates,” Schriem said. “But people should be familiarized with the idea of congestion, and if the lines are overtaxed, the system is set up to go to the next-best system and generator.”