GBC’s Fry: Our energy future will be shaped by conservation

Don Fry Commentary on WYPR

Now that Marylanders have endured the painful adjustment from paying artificially low, regulated rates for electricity to paying market rates, what’s in store for our energy future?

In a word – conservation.

That’s the consensus of experts who addressed a recent Greater Baltimore Committee Business Outlook conference on energy. The coming decades will be characterized by growing customer motivation to conserve energy, the experts agreed.

Briefly, here’s why.

Demand for electricity is increasing in the U.S., but our generating and transmission infrastructure is aging. In Maryland, where half of our state’s electric power infrastructure is more than 30 years old, demand for electricity increased 16 percent since 1999, while our generating capacity grew by only 2 percent.

Responding to similar trends across the country, the electric power industry is poised to enter one of its largest building phases in history. In the next several decades, $750 billion in private investments will be made to build new generating and transmission infrastructure.

Electricity prices will reflect the need to compensate the private investors – the risk takers who fund infrastructure improvements. Prices will also be driven by rising costs of power plant fuel – mostly coal and nuclear in Maryland – and growing pressure to address environmental concerns.

As one expert put it: “Energy is expensive. It’s going to remain expensive. So it’s very important to do with less.”

Expect an emphasis on consumer conservation, including rate structures that encourage energy use during off-peak hours, and more aggressive consumer education about using energy efficiently.

Maryland’s government has set a goal of reducing its electricity consumption by 15 percent.

Do consumers in Maryland have the capacity to match such a goal? The experts say “yes,” and point to California – of all states – as a potential energy role model. If the average Marylander would adopt the energy conservation habits of the average Californian, experts say, Maryland would use 42 percent less electricity.

That’s certainly a goal worth aiming for.

For the Regional Business Report, this is Don Fry, President and CEO of the Greater Baltimore Committee, for 88.1 WYPR, your NPR news station.

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