Maryland PSC OKs Potomac Edison proposal to buy out contract of generating station

Daily Record Staff//June 22, 2023//

Listen to this article

The Maryland Public Service Commission (PSC) approved a proposal from Potomac Edison, a subsidiary of FirstEnergy, to buy out its contract with AES’s Warrior Run generating station in Cumberland approximately seven years early, potentially saving customers nearly $80 million.

The contract with AES Warrior Run for the coal-fired power station was established in 2000 as a requirement of the Public Utility Regulatory Policies Act (PURPA) passed by Congress in 1978. The contract was scheduled to end in 2030. Potomac Edison’s Maryland customers currently pay a Cogeneration PURPA Project Surcharge on their electric bill based on the price at which Potomac Edison can resell the power it purchased from Warrior Run. The surcharge amount has varied greatly year-to-year due to fluctuations in the competitive market.

Customers will continue to see the PURPA surcharge on their bills through the term of the buyout in accordance with the Maryland PSC’s order. However, through the buyout period, Potomac Edison customers are forecast to save a substantial amount of money. Also, this agreement will help to stabilize their bills by eliminating charges that are based on a volatile market. An early end to the Warrior Run contract has an estimated 90% probability of saving customers money over the remaining term of the agreement.

Potomac Edison serves about 285,000 customers in all or parts of Allegany, Carroll, Frederick, Garrett, Howard, Montgomery and Washington counties.