SMECO to Purchase Power from Brandywine Plant - Southern Maryland Headline News

SMECO to Purchase Power from Brandywine Plant

HUGHESVILLE, Md. (June 10, 2011)—Southern Maryland Electric Cooperative (SMECO) has entered into a purchase power agreement with J.P. Morgan Ventures Energy Corporation to purchase power generated by a facility in Brandywine, Maryland, located within SMECO's service area.

"Purchasing power from another local facility will help keep SMECO's rates low," according to Austin J. Slater, Jr., SMECO president and CEO. "We will avoid congestion charges for power that is produced in other areas and delivered to Southern Maryland via transmission lines. Continuing our plan of regional purchases avoids those charges and means our customers will save money."

The natural gas fueled plant can produce 225 megawatts (MW) of power, which would have served the energy needs of 57,000 households on an average day in April.

SMECO will receive power at its discretion for a period of eight years. The "call option" agreement allows SMECO to determine, on a daily basis, whether or not the Co-op will take power from the plant on the next day. The call option helps SMECO avoid paying high energy costs when market prices go up.

To produce power, the Brandywine plant uses natural gas, which has become the most cost-effective and clean fuel source for generating plants. Slater added, "This agreement represents a very good value for SMECO and its customer-members. Natural gas has become a plentiful, reliable, and cost effective fuel source for generating plant. In addition, natural gas is a more environmentally-friendly fuel source than coal or oil."

SMECO will also benefit by acquiring enough capacity to meet about 25 percent of its requirements as determined by the PJM Interconnection, of which the Co-op is a member. Slater explained that the utilities that belong to PJM are required to ensure that enough generating capacity is available to meet the electric demand for all customers on even the hottest days of the year. By purchasing power from the Brandywine plant and reducing the risk of price increases, SMECO may save millions of dollars.

SMECO is a customer-owned electric cooperative providing electricity to over 150,000 services in Charles County, St. Mary's County, southern Prince George's County, and all but the northeast portion of Calvert County. Co-ops are distinctly different from investor-owned utilities because co-ops are owned by their customers, and customer-members elect the men and women who serve on the Board of Directors.

Source: SMECO

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