Efforts to force local utilities to bring more electricity to the table to confront Maryland's complex energy shortage problems could backfire, an energy consultant said Monday.

"To put on the utilities the requirement of building or buying power plants is a good portfolio management direction, only if the price is right," said Skip Trimble, a principal with Baltimore- based Castlebridge Energy Group.

But credit problems could cause prices to fluctuate, changing the deal altogether, he said.

The Maryland Public Service Commission alerted local investor- owned utilities last week that it might direct them to obtain extra electricity to prevent the brownouts and rolling blackouts that the agency predicted could begin as soon as 2011, during summer high- energy demand days.

Gov. Martin O'Malley mentioned the concept as one of six approaches to the state's energy woes, along with renewable power purchases and helping finance the construction of small scale plants, in the keynote speech before the Maryland Association of Counties at its annual summer conference in Ocean City Saturday.

If the state required local utilities to provide more power for consumers, they would most likely have to partner with companies that could collapse during the life of the deal, because of the difficult credit market, Trimble said.

"Right now credit is at a premium," he said. "I don't care how you slice and dice it."

Utilities are not in a position to generate more power on their own, because in the move to deregulation in 1999, generation plants were sold to other firms. Baltimore Gas & Electric Co. sold its plants to its parent company, Constellation Energy Group Inc.

"If they are forced to capriciously go and buy or own pieces of power plants, that could be dangerous because long term there's that credit liability problem," Trimble said. "The longer that you buy term purchases, the more probability you have of your counterparty going belly up, and that becomes a problem. That's something that could be problematic for what the governor is asking for."

Pepco Holdings Inc. got into a similar situation when its subsidiary Pepco sold its generation plants to Mirant Corp., and Mirant later went bankrupt.

Rob Gould, a spokesman for Constellation, said in a statement that the company is also trying to address the state's energy problems.

"Key to any solution set must be the ability to balance affordability, reliability and sustainability -- all of which are critical to making Maryland an attractive place for future energy investment," he said. "We look forward working with the administration in a meaningful way in helping to address Maryland's future energy needs."

The PSC's order directed utilities to determine when and where supply problems might surface.

The energy companies would need to establish new generation either by buying it or building new plants.

"It's not something that should be mandated, in my personal opinion," Trimble said. "You're gambling that this is a good deal."

Trimble praised the governor's frank discussion of the state's energy future, and his acknowledgement that there is no quick fix to the problem, or inexpensive way to create more generation.

"The governor is doing a real good job of going in many directions that he needs to go into and he's not promising a free ride," he said.

Energy conservation and plans build a new nuclear unit at Constellation's plant at Calvert Cliffs will help, Trimble said, but he also said that the O'Malley administration needs to carefully examine forcing utilities to provide more power.

"They are good ideas," he said, "but they have to be fleshed out with some more business savvy."

Originally published by Danielle Ulman.

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