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As noted by Staff, the Preliminary Report discussed decisions made to implement the model evaluation process and determined that power purchase agreements (“PPA”), competitive dialogue, and index renewable energy credits (“REC”) sourced through a competitive procurement would be the strongest and most robust models across policy objectives. It also noted that technology-specific characteristics may support alternative models such as partial tolling for dispatchable resources like Battery Energy Storage Systems (“BESS”) and gas.

Staff states that it, “generally agrees with the methods or conclusions of the Preliminary Report…..and recommends that the final evaluation note the value of considering, at the appropriate time, resource availability during reliability-critical periods, dispatchability, duration, locational deliverability, interconnection feasibility, expected commercial operation date, and other technology-specific performance characteristics in addition to electric load carrying capability (“ELCC”).”

“Staff notes the value of this Preliminary Report for identifying which procurement models best facilitate each type of technology. Staff further recommends that the final Study recognize that the effectiveness of a procurement model cannot be evaluated independently from the reliability characteristics and project feasibility of the resources the model is expected to induce.”

“In particular, capacity accreditation, operational performance, locational deliverability, interconnection feasibility, project-readiness, commercial-operation certainty, and risk allocation should inform the evaluation of any future procurement. In observing this proceeding alongside PC72 and the materialization of the PJM RBP and IRAS structures, Staff is skeptical of the value of establishing a long-term, open-ended process for procuring supply in Maryland to alleviate resource adequacy at least cost to ratepayers. Staff believes a more appropriate action could be for the results of the Preliminary Report to inform a structured, discrete procurement based on previous legislation directing discrete procurements under varying types of models. Such a procurement should first define the reliability need and desired performance characteristics, then determine the technology or portfolio capable of satisfying that need, and finally select the procurement model that can obtain those resources at the lowest reasonable risk-adjusted cost to Maryland customers.”

PC66
Resource Adequacy
PC72
Large Load Customer Regulations and Tariffs Interconnecting to the Electric System Servicing Maryland