Exelon Seeks to Build Maryland Power Plant, Challenging Decades of Utility Deregulation

Exelon Corp., owner of three electric utilities in Maryland, plans to push for legislative approval next year to build and operate a power plant in the state, representing a dramatic reversal of a 26-year-old utility deregulation policy. The current policy, established decades ago, forced utilities operating power lines and transmission infrastructure to exit the power generation business, creating a separation between distribution and generation services.

The company appears positioned to capitalize on a unique political moment as electric customers across Maryland and the region experience significant price pressures. Rising electricity costs stem from multiple factors including increased demand and higher power distribution charges imposed by utilities. Exelon argues that adding generation capacity through its proposed plant would help stabilize costs by increasing electricity supply in the regional market.

Critics of the proposal raise concerns about cost recovery mechanisms that would differ from current power generators operating in Maryland. Unlike independent generators, Exelon would potentially recover generation costs directly from ratepayers through regulated rate structures. Company officials counter that any cost recovery would require approval from Maryland regulators, who would maintain oversight over how, where, and when generation infrastructure investments are made.

Valencia McClure, a senior vice president of governmental, regulatory and external affairs at Exelon, emphasized the benefits of regulatory oversight in controlling electricity costs. The company's approach would provide regulators with direct authority over investment decisions and cost recovery processes, potentially offering more stability than the current market-based generation system. This regulatory framework would differ significantly from the competitive generation market that has operated in Maryland since deregulation.

The legislative battle expected in Annapolis next year will test whether policymakers are willing to reconsider fundamental aspects of Maryland's energy market structure. The outcome could reshape how electricity generation is regulated and financed in the state, with potential implications for ratepayers, competing generators, and the broader regional energy market. The debate comes at a time when energy affordability concerns are mounting alongside ongoing transitions in the power generation landscape.