Exelon Wants To Build A Power Plant In Maryland, Reversing Decades Of Deregulation Policy

By Christine Condon, Maryland Matters

November 3, 2025

Next year in Annapolis, the Exelon Corp., owner of three electric utilities in Maryland, plans to push for legislative approval to build and operate a power plant in the state, company officials say.

That would be a dramatic reversal of a 26-year-old utility deregulation policy that, in part, forced utilities that operate power lines and other transmission infrastructure to get out of the power generation business.

But Exelon seems ready to seize on a unique political moment to overturn the law, with electric customers in Maryland and across the region feeling the pinch of rising prices — in part because of rising demand, but also because of rising power distribution costs charged by utilities.

Critics say that, unlike power generators operating in the state today, Exelon would be able to recover generation costs from ratepayers. But Exelon notes that it would need to go before Maryland regulators for approval to recoup its costs through power bills.

“It’s a guaranteed way to increase electricity supply, which will help bring costs under control,” said Valencia McClure, a senior vice president of governmental, regulatory and external affairs at Exelon. “And then your regulators will have control over the dollars that are spent: The how, where, when, generation will be built.”

Gov. Wes Moore (D) speaks with BGE CEO Tamla Olivier before a 2025 news conference in Annapolis. (Photo by Christine Condon/Maryland Matters)

Exelon isn’t just looking to build in Maryland, but across its footprint, which also includes ComEd in Illinois and Atlantic City Energy in New Jersey. So Exelon will aim to sway legislators across the region.

“I believe the 2026 legislative sessions are going to be an opportunity for us,” Exelon CEO Calvin Butler told Reuters. “We’re going to be advocating for it.”

That push has plenty of detractors, including ratepayer advocates, who argue that investors should bear the risks of new power development — as opposed to already overburdened consumers. Climate advocates, including the Chesapeake Climate Action Network, are joining the chorus too, as they continue to oppose the development of new natural gas power plants in Maryland.

Not surprisingly, the companies that operate power plants, known as merchant generators, are also opposed. They argue Exelon is unaccustomed to building generation, and therefore poorly suited to enter the fray.

What legislators are saying

Some leading Maryland policymakers are skeptical, too.

Del. C.T. Wilson (D-Charles), who helped usher 2025’s energy reform legislation to the finish line, said he worries that Exelon wants to get involved because it sees an opportunity for a windfall, with a reduced risk.

“They have a duty to the ratepayer, but they also have a duty to their stockholders — and that duty is to make more money,” said Wilson, who chairs the House Economic Matters Committee. “Getting involved in generation is not just something that they’re doing out of the kindness of their hearts. They’re doing it because they see a financial benefit.”

At least one leading Republican, Sen. Steve Hershey (R-Upper Shore) said he’s open to the proposal, but only in a limited fashion. Republicans have argued that policies spearheaded in Annapolis by the Democratic majority, including climate change policies, have driven fossil fuel power generators away from Maryland, worsening the state’s energy picture.

“We have to be smart,” Hershey said in a statement. “I’m open to limited regulated generation if it strengthens our reliability, but it must come with strong consumer protections. Utilities should not be allowed to rate-base a project until it is built, operational and delivering power to Maryland customers.”

In the 2025 legislative session, Maryland lawmakers voted to encourage new power generation in Maryland using regulatory “fast-tracks” for new projects. They stopped well short of allowing utilities to get back in on the generation game.

Power generators had until the end of October to submit their “dispatchable” projects to the Maryland Public Service Commission for an expedited review. To meet the criteria, projects have a certain ranking, indicating that they can contribute to the grid during peak times. The PSC will also accept applications for battery storage projects. McClure said that Exelon is watching both efforts closely to see if today’s competitive market can meet Maryland’s demands.

But in the meantime, Exelon is completing feasibility studies on potential new power facilities in Maryland, McClure said. Exelon has three Maryland utilities: Baltimore Gas & Electric, Pepco and Delmarva Power.

The utility is focusing its studies on a potential natural gas-fired power plant, but it is also considering solar arrays and battery energy storage, McClure said.

Del. C.T. Wilson (D-Charles) speaks in Baltimore County on Sept. 22 about a bill requiring electricity bill refunds for consumers. (Photo by Christine Condon/Maryland Matters)

In a best-case scenario, she said, the company anticipates that building a gas plant could take five to seven years. She said that adds to the urgency for policymakers to act now, and allow transmission companies to add power generation to the grid.

“We don’t have time to continue to wait — to think about: What is the right solution? What is the right plan?” McClure said. “That’s why it’s going to take multiple parties coming to the table to resolve the issue.”

Maryland People’s Counsel David Lapp, an independent attorney general appointee who works to protect ratepayers from unfair practices and high costs, states his opposition to Exelon’s proposal simply: “We should be looking for less monopoly control, and not more,” he said.

Lapp worries that allowing regulated generation — the term for letting utilities build and operate generation — could see massive cost overruns, in part because utilities wouldn’t have incentives to keep costs low.

That’s because utilities, like Exelon, get a guaranteed return on their infrastructure spending, plus interest. So even if the power infrastructure isn’t needed later, consumers are still on the hook to pay for it over a period of years.

The structure is meant to ensure that the electric and gas systems are continuously maintained. But Lapp argues that some utilities — particularly those owned by publicly traded Exelon — have taken it too far, rapidly spending on infrastructure and swelling customer bills.

Since 2020, the “electricity distribution” rate on BGE bills, which is the cost of delivering power via transmission infrastructure, has increased 30%. Since 2010, the rate has been twice the rate of inflation, according to the Office of People’s Counsel.

Recently, headlines have focused on the supply and demand imbalance, largely fueled by data centers, that has led to skyrocketing auction clearing prices at PJM, the regional power grid operator. But those increases only started hitting customer bills this summer and fall — earlier bill increases came largely from higher distribution rates, Lapp said.

“They [Exelon] want to shift attention away from their high distribution rates that are really driving a lot of the affordability issues we have in Maryland,” Lapp said.

McClure argues that the “supply” charges — fueled in part by PJM’s auction but also by some transmission costs — make up a larger share of customers’ bills than distribution costs.

“You look at the breakout of the bills now, you still see the supply cost is the higher portion of the bill versus distribution. And if we do nothing now, the supply costs will continue to rise,” McClure said.

A battle over ‘institutional knowledge’

To be sure, supply and demand forces are creating more and more problems for customer bills in PJM’s territory. But Lapp says that’s in large part due to sky-high projections for the amount of energy that data centers will use. And most of those energy gobbling facilities won’t be in Maryland.

“Why should Maryland utility customers be on the hook for building generation to supply data centers … most of which are outside of Maryland?” he asked.

Constellation Energy — which owns power facilities across the country, including Maryland’s Calvert Cliffs Nuclear Power Plant and the Conowingo Dam — has its own gripes. Constellation was once a subsidiary of Exelon, though it operated separately as a power producer on the competitive market. But in 2022, it was spun off from Exelon, becoming a separate entity.

A protester holds a shirt calling for “No New Gas” during an Annapolis protest against the Next Generation Energy Act sponsored by House and Senate leadership. (Photo by Christine Condon/Maryland Matters)

Mason Emnett, senior vice president for public policy at Constellation, argued that Exelon doesn’t have the experience necessary to navigate the challenges of siting and then building a large facility in Maryland, from community pushback to supply chain delays associated with gas turbines.

“The utilities are going to have to solve all of these same problems, but they don’t have the supply chains. They don’t have the internal people and expertise. They haven’t operated power plants in over a decade — more than that,” Emnett said.

McClure pushed back, arguing that Exelon, at its core, is an “infrastructure company” focused on maintaining reliable equipment. Constructing and operating a power plant is in the same vein, she said.

“We have institutional knowledge regarding regulated generation,” she said. “We’re also poised to be able to work with some of the top developers throughout the country to be able to build generating plants, as well. So we feel very confident that we have the right expertise.”

Technically, Maryland law actually allows the PSC, which regulates power projects, to direct utilities to construct generating stations if the need arises. But Nick Alexopulos, a spokesman for BG&E, said the company is looking for a more ironclad statute, with “legislative guidance on key issues — such as the form or type of generation, how the output may be offered, and the framework for cost recovery.”

How dire are the grid challenges?

A few Maryland legislators, including Sen. Chris West (R-Baltimore County) backed a bill last legislative session that would have removed the requirement for the PSC to authorize utility-owned generation, in an effort to expressly allow the practice. West was joined by two Democrats, Sen. Karen Lewis Young (D-Frederick) and Sen. Ron Watson (D- Prince George’s).

West said he was alarmed by predictions from the regional grid operator, PJM Interconnection, that power challenges could begin as soon as 2027, when periods of peak demand — like hot summer days — could result in a choked grid, and therefore isolated power shut-offs.

“I think the ratepayers would rather pay more money than all of the sudden go dark,” West said.

Analysts have differing opinions about how dire the reliability situation is in Maryland. Lapp, whose office studies PJM’s proposals for affordability concerns, said he believes that transmission projects already in the pipeline will largely alleviate the stress to Maryland’s portion of the grid. That includes a line under construction to accommodate the retirement of the Brandon Shores coal-fired power plant in Anne Arundel County,

Lapp contends that while the PJM grid may need more energy generation to keep up with data centers, there isn’t exactly a need to produce that power inside Maryland’s borders.

“We’ve been importing more energy than we use for decades and decades — and there’s a reason why we import,” Lapp said. “It’s economic. It’s cheaper to import electricity, because it can be cheaper to generate it — to put power plants — in other states.”

Del. Lorig Charkoudian (D- Montgomery), who also opposes Exelon’s push, said she feels Exelon is raising the volume on worries about an electricity crisis, “with the hope that everyone throws their hands up and says: ‘OK, Exelon, go ahead and build generation.’"