NCI Report on Maryland Wind and Biomass Implementation 101211r1-clean

© 2011 Navigant Consulting, Inc.
Assessment of Implementing Land-
Based Wind and Poultry Litter Based
Biomass Power Plants in Maryland
Presented to:
Exelon Corporation and Constellation Energy Group
October 12, 2011
Navigant Consulting, Inc.
3100 Zinfandel Drive, Suite 600
Rancho Cordova, CA 95670
916.631.3200
www.navigant.com

Assessment of Implementing Land Based Wind and
Poultry Litter Based Biomass Power Plants in Maryland
Page i
Table of Contents
1. Executive Summary........................................................................................................2
2. Purpose, Scope and Methodology of Review.............................................................5
3. Identification of Potential LBW Power Plant Sites.....................................................9
4. Implementation Challenges of the Selected LBW Plants ........................................12
4.1 Transmission Constraints ......................................................................................................... 12
4.2 Environmental Challenges........................................................................................................ 14
4.2.1 Permitting Processes ................................................................................................... 14
4.2.2 State of Maryland......................................................................................................... 16
4.2.3 Anticipated Challenges............................................................................................... 17
4.2.4 Anticipated Costs......................................................................................................... 18
4.2.5 Anticipated Schedule .................................................................................................. 18
5. Cost of the Proposed Renewable Energy Requirements.........................................19
5.1 Estimated Installed Costs of LBW Plants................................................................................ 19
5.2 Estimated Installed Cost of the LBW and Biomass Transmission Facilities ...................... 19
5.3 Estimated Installed Cost of the Proposed Wind Only Requirement .................................. 21
5.4 LBW Operating Costs................................................................................................................ 21
5.5 Economic Viability of the Proposed Wind Only Requirement............................................ 22
5.5.1 Economic Viability Under an Alternative REC Price Forecast.............................. 24
5.5.2 REC Price Levels Necessary to Achieve Economic Viability of the Selected LBW
Plants 26
5.6 LBW in Maryland vs. Other PJM Locations ........................................................................... 26
5.7 Poultry Litter Based Biomass ................................................................................................... 28
5.7.1 Current State of Development ................................................................................... 28
5.7.2 Fuel Supply and Challenges....................................................................................... 29
5.7.3 Capital and Operating Costs...................................................................................... 29
5.7.4 Economic Viability....................................................................................................... 31
5.7.5 Local Opposition.......................................................................................................... 32
6. Summary of Estimated Capital Costs and Economic Viability..............................33
7. Offshore Wind ...............................................................................................................35
7.1 Permitting Challenges............................................................................................................... 35
7.2 Costs............................................................................................................................................. 35
7.3 Transmission............................................................................................................................... 36
7.4 Summary..................................................................................................................................... 36

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1. Executive Summary
Exelon Corporation (Exelon), Constellation Energy Group, Inc. (Constellation), and Baltimore Gas and
Electric Company (BGE) (collectively, the “Applicants”) have requested authorization from the Public
Service Commission of Maryland (the “PSC”) for Exelon to exercise substantial influence over the
policies and actions of BGE (the “Application”).1
As part of its Application, Exelon has committed to develop or assist in the development of at least 25
megawatts (MW) of new Tier 12 renewable energy project(s) in Maryland. In response to the Application,
testimony has been filed by interveners suggesting that this renewable energy commitment should be
substantially larger.
In order to assess the cost and risk impact of implementing a significantly larger renewable energy
commitment, Exelon retained Navigant Consulting, Inc. (Navigant) to perform an independent
assessment of the viability of implementing either 1) a proposed renewable energy commitment of 420
MW of land-based wind power plants (the “Proposed Wind Only Requirement”), or 2) 350 MW of land-
based wind power plants and 25 MW of poultry litter based biomass power plants in Maryland (the
“Proposed Wind/Biomass Requirement”). This assessment was performed by identifying potential wind
and biomass power plant sites in Maryland sufficient to satisfy each commitment and estimating the
performance, plant costs, transmission costs and economic viability of each on its own and in aggregate
for each commitment assuming expiration of the federal Production Tax Credit (“PTC”) on December 31,
2012. We also assessed economic viability under continued current Renewable Energy Credit (REC)
prices, and determined what REC prices would need to be in order to achieve economic viability. Key
aspects of wind plant permitting, biomass fuel supply and offshore wind power were also assessed.
Our assessment relies on forecasts of a variety of key factors which are inherently uncertain. The major
forecast uncertainties include future wholesale electricity and Renewable Energy Credit (REC) prices,
power plant costs and timing, inflation, cost of equity and debt, and regulatory changes. Compounding
this uncertainty is the fact that the investment decision on the specific wind and biomass plants would
not be made until several years from now, and would be subject to the then current key forecasts and
regulatory environment. Our assessment is based on forecasts available today and does not reflect the
wide range of outcomes that could occur due to the uncertainty in the forecasts. This compounded
uncertainty results in a risk profile for these plants that is higher than that for a typical renewable plant
investment decision. This risk may not be fully reflected in the equity and debt costs we have used to
calculate the economic viability of the plants.
In our assessment, we have relied on a REC price forecast recently published by the State of Maryland.
This forecast has been used for this assessment because it is publicly available and relevant to the venue
of the proceeding. We have not performed an in-depth assessment of the methodology, assumptions or
other key factors driving this forecast. We draw no conclusions concerning the validity or accuracy of
this forecast.
1 Application of Exelon, Constellation, and BGE, authorizing Exelon to acquire the power to exercise substantial
influence over the policies and actions of BGE pursuant to § 6-105 of the Public Utilities Article (PUA), Annotated
Code of Maryland, May 25, 2011.
2 Tier 1 renewable sources include solar, wind, geothermal, poultry litter, certain biomass, ocean, certain methane,
certain biomass and methane fuel cell, small hydroelectric, waste-to-energy and refuse-derived fuel sourced power
generation facilities as defined in Section 7-701 of the Public Utilities Article, Annotated Code of Maryland.

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We have completed our assessment. Our findings and conclusions are as follows.
1. The Proposed Wind Only Requirement may be satisfied through implementation of three wind
plants in western Maryland (97 MW in 2016, 139 MW in 2018, and 97 MW in 2020) and one in
eastern Maryland (97 MW in 2022). The Proposed Wind/Biomass Requirement may be satisfied
through implementation of two wind plants in western Maryland (97 MW in 2016, 139 MW in
2018), one in eastern Maryland (97 MW in 2022), and a single poultry litter fired biomass power
plant (25 MW in 2016) in eastern Maryland. Each of these Requirements would generate more
than 1.1 million Renewable Energy Credits (RECs).
2. Development of the Proposed Wind Only Requirement would cost approximately $1 billion.
Development of the Proposed Wind/Biomass Requirement would also cost approximately $1
billion.
3. Economic viability was judged on the ability of each plant to achieve a positive net present value
when its after-tax net operating cash flows are discounted at its after-tax weighted average cost
of capital over a 20 year life. None of the plants would be economically viable based on
expected forecast market prices for energy, capacity, and RECs. NPV is approximately negative
$260 million for the Proposed Wind Only Requirement and approximately negative $289 million
for the Proposed Wind/Biomass Requirement. A negative NPV indicates that an owner, if it
were to build this portfolio of plants, would suffer an economic loss since returns from the
portfolio would not be sufficient to cover the cost of debt and equity issued to build the
portfolio.
4. Maryland Tier 1 RECs have been reported to be selling for less than $2. If these current REC
prices continue into the future, NPV for the Proposed Wind Only Requirement worsens to
approximately negative $366 million. To achieve economic viability, REC prices would need to
be approximately $52/MWh for the eastern wind plant, $80-86/MWh for the western wind
plants, and $118/MWh for the biomass plant. These required REC prices are significantly higher
than the Alternative Compliance Payment (ACP) for Maryland, which is currently 4.0¢/kWh
($40/MWh) for non-solar Tier 1 shortfalls. This indicates that it would be more economic for an
entity subject to the Maryland RPS (such as the Applicants) to pay the ACP rate than to purchase
RECs from the potential plants. Economic viability is highly sensitive to REC price assumptions.
This sensitivity, coupled with the current lack of long term REC purchase contracts in the
market, exposes the owner to significant potential losses on either of these $1 billion portfolios.
5. Although local opposition and avian mortality issues have arisen with permitting of wind plants
in Maryland, development of the wind plants and the biomass plant may be accomplished
between now and 2022 assuming no significant permitting or local opposition issues. Permitting
and local opposition are factors beyond the control of the Applicants.
6. Potential wind plants outside of Maryland and in the PJM area may be more economically viable
due to higher capacity factors and generally flatter terrain. There are 27 potential plants in
Illinois and 6 six potential plants in Indiana with projected capacity factors higher than that of
the highest capacity factor potential plant in Maryland.
7. Offshore wind in Maryland is not a viable component of the proposed commitments at this time
due to the early stage nature of technology and uncertainty over cost and environmental impact.

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This report, as dated, summarizes our review and conclusions. In preparing this report, we have relied
on documents, correspondence, analyses, and information from various private and public sources.
While we believe these documents and information to be reliable, they have not been independently
verified for either accuracy or validity, and no assurances are offered with respect thereto. If and to the
extent that additional information becomes available to us after the date of this report, our findings and
conclusions expressed herein are subject to change. Navigant and its employees are independent
contractors providing professional services to Exelon, and are not officers, employees, or agents of the
Applicants.

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2. Purpose, Scope and Methodology of Review
Exelon Corporation (Exelon), Constellation Energy Group, Inc. (Constellation) and Baltimore Gas and
Electric Company (BGE) (collectively, the “Applicants”) have requested authorization from the Public
Service Commission of Maryland (the “PSC”) for Exelon to exercise substantial influence over the
policies and actions of BGE (the “Application”).3
As part of the Application, Exelon has committed to develop or assist in the development of at least 25
megawatts (MW) of new Tier 1 renewable energy project(s) in Maryland (the “Renewable Energy
Requirement”). In the Application, the Applicants state:
“At Exelon’s discretion, such assistance may take the form of ownership, development, or financial support of
such projects or entering into long-term agreements for the purchase of renewable energy from project(s) that
are developed, owned, or financed by others, but would not have been constructed except for Exelon’s
assistance. The projects would apply for any applicable permits within 24 months after consummation of the
Merger, and would be operational not later than 45 months after consummation of the Merger.4
Exelon has estimated that the Renewable Energy Requirement will cost between $45 million and $55
million”.5
In response to the Application, testimony has been filed by the Maryland Energy Administration (MEA)
and the Mid-Atlantic Renewable Energy Coalition (MAREC). MEA has suggested that the Renewable
Energy Requirement should be substantially larger.6 MEA proposes that the size of the Renewable
Energy Requirement be set equal to 25 percent of the forecast Maryland RPS requirement for Exelon for
the year 2022 (approximately 1,100,000 RECs).7 To reach this amount, the MEA calculates that Exelon
would need to build or facilitate the building of either 1) 420 MW of land-based wind (LBW), or 2) 350
MW of LBW and 25 MW of biomass (poultry litter fueled) power plants.8 MAREC proposes that the
Applicants should be required to make a commitment for project(s) of a total of at least 250 MW, and at
least 25 percent of the commitment should be developed in the State of Maryland and the remaining
portion should be developed from project(s) that are deliverable to Maryland.9
3 Application of Exelon, Constellation, and BGE, authorizing Exelon to acquire the power to exercise substantial
influence over the policies and actions of BGE pursuant to § 6-105 of the Public Utilities Article (PUA), Annotated
Code of Maryland, May 25, 2011.
4 Application, page 3.
5 Application, Table 1.
6 Direct Testimony of Malcolm D. Woolf on Behalf of The State of Maryland and The Maryland Energy
Administration, page 10 at 18.
7 Maryland mandates that an electricity supplier in Maryland must derive an increasing percentage of its electricity
supply sold into Maryland from renewable energy sources, reaching 20 percent in 2022 and later years. Section 7-703
of the Public Utilities Article, Annotated Code of Maryland.
8 See MEA testimony page 25 at 17: ”For example, if Exelon were to build only LBW to satisfy the requirement, it
would need to construct or facilitate the construction of approximately 420 MW of new generation. If Exelon were to
construct or facilitate the construction of a combination of LBW and biomass, however, it could meet its target
through a single 25 MW biomass plant and 350 MW of LBW. Other Tier 1 combinations are possible, and the
construction of these assets could be done in phases over the next decade.
9 Direct Testimony of Bruce Burcat on behalf of the Mid-Atlantic Renewable Energy Coalition (errata final version),
page 14 at 3.

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Wind energy development in Maryland is in its early stages. At this time, only two utility-scale wind
projects are in service – the 70 MW Criterion Project owned by Constellation and the 50 MW Roth Rock
Project owned by Synergics. Two other wind projects (Savage Mountain and Dans Mountain) have been
proposed for development, but are currently not active in front of the PSC.
Table 1 – Status of Utility-Scale LBW Development in Maryland as of June 201110
There are several land-based wind projects planned for development and interconnection in Maryland.
Table 2 summarizes the interconnection requests that PJM has received for wind projects located in
Maryland.
Table 2– LBW Projects Proposed for Electric Interconnection in Maryland11
There are over 200 wind projects proposed for interconnection in the entire PJM area. Therefore, the
wind projects proposed for Maryland comprise only a small portion of the total number of wind projects
planned. Figure 1 below illustrates the location of wind power project interconnection requests that have
been received by PJM.
PJM administers the process for the interconnection of all new generators and new transmission facilities
to the PJM transmission grid. Upon receipt of an interconnection request, the project is placed in an
interconnection queue, in which queue positions are determined by the submission date of the request.
The requests are studied in both queue and geographic clusters. The studies progress in a stepwise
manner (feasibility, system impact and facility study), requiring the applicant to place deposits in
advance against the cost of the studies, execute study agreements and eventually execute an
interconnection agreement and commit to pay capital costs of the new transmission facilities needed.
The duration of the first two studies (feasibility and system impact) is nominally one year. Facility
studies may take 6 or more months to complete. However, the overall study process can take longer due
to projects dropping out of the queue, delays in study duration and other reasons. An application
10 Exhibit 1 in Fiscal and Policy Note for Senate Bill 314 - Public Utility Companies - Generating Stations – Wind,
Maryland General Assembly, 2011 Session, from the Maryland Power Plant Research Program, Public Service
Commission, Department of Legislative Services.
11 PJM Interconnection Queues, October 2, 2011. http://www.pjm.com/planning/generation-
interconnection/generation-queue-active.aspx.
Proposed PSC Case
Project Developer Size (MW) County Number Status
Criterion Constellation 70 Garrett 8938 Construction Completed
Savage Mountain US Windforce 40 Garrett and Allegany 8939 CPCN Expired
Roth Rock Synergics 50 Garrett 9191 Construction Completed
Dans Mountain US Windforce 70 Allegany 9164 Project on Hold
Queue Queue Date PJM Substation MW Status State
S14 3/19/2007 Dans Mountain 70 Under Study MD
T16 8/20/2007 Gorman-Snowy Creek 69kV 30 Under Study MD
U2-030 6/5/2008 Four Mile Ridge Wind 138kV 60 Under Study MD
W4-017 11/29/2010 Kings Creek-Crisfield 69kV 100 Under Study MD

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cannot remain in the queue indefinitely. If an applicant fails to pay study deposits or sign study
agreements within 30 days from when a study agreement is offered, the application will be terminated
and considered withdrawn from the queue.
Figure 1 – Wind Projects Proposed for Electric Interconnection in PJM12
The renewable energy commitments advocated by MEA and MAREC are significantly larger than the
Renewable Energy Requirement of Exelon. In order to assess the cost and risk impact of implementing a
significantly larger Renewable Energy Requirement, Exelon retained Navigant Consulting Inc.
(Navigant) to perform an independent assessment of the viability of implementing a Renewable Energy
Requirement of 420 MW of LBW (the “Proposed Wind Only Requirement”), or 350 MW of LBW and 25
MW of poultry litter based biomass power plants in Maryland (the “Proposed Wind/Biomass
Requirement”).
To assess the costs and challenges of implementing the Proposed Renewable Energy Condition, we first
identified for study a set of potential wind power plant sites within Maryland with relatively high
expected annual capacity factors based on publicly available resource data. A potential biomass power
plant site was also identified for study based on proximity to commercial size poultry farms. The
quantity of wind sites selected for study was such that their combined expected power production
capacity was close to the capacity of the wind components of each commitment. The capacity of the
potential biomass plant studied was 25 MW, consistent with the size of biomass plants we have studied
previously and with the size proposed by MEA. We then assessed the interconnection of these potential
new wind and biomass power plants to the existing electrical transmission system, including the need
12 PJM Renewable Energy Dashboard, October 2, 2011. http://www.pjm.com/about-pjm/renewable-dashboard.aspx.

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for new direct connect and network reinforcement facilities. We also assessed the environmental
permitting processes that would be required for development of the plants.
We then estimated the capital costs of the power plants and new transmission facilities as well as the
annual costs of operation, maintenance, taxes, and other owner costs. In addition, we estimated the net
operating cash flows that would be generated by each plant based on certain key power production,
REC sale price, energy sale price, and operating cost assumptions. We then calculated the after-tax
weighted average cost of capital (WACC) for each plant based on certain financing assumptions, and
used this rate to calculate a net present value (NPV) of the operating cash flows. A positive NPV was
indicative of an economically viable plant. We also assessed economic viability under continued current
REC prices, and determined what REC prices would need to be in order to achieve economic viability of
each plant.
In addition to this assessment of LBW and biomass, we assessed the general availability and cost of
potential new offshore wind power plants in Maryland.

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3. Identification of Potential LBW Power Plant Sites
Potential LBW power plant sites in Maryland that could satisfy the wind component of both
commitments were identified through review and extraction of data from a detailed database of more
than 700 GW of potential wind plants in the eastern United States that was developed in 2009 for the
National Renewable Energy Laboratory (NREL) (the “NREL Eastern Wind Database”).13 The database
contains 1,325 separate wind production plants. Most are hypothetical with the balance corresponding to
the locations of existing operating wind plants. The potential plant site locations, plant capacities,
capacity factors, and other parameters were synthesized from historical weather data for the years 2004
through 2006 at high spatial (2-kilometer) and temporal (10-minute) resolution. Based on the historical
data, the model estimates what the wind speeds and air density would have been on the ground and at
wind turbine hub height. Those wind speeds are then used, along with local geographic information
(e.g., mountains, lakes, and ridgelines) to simulate the wind power production.
The database contains nine potential LBW plants for Maryland. Data for these plant sites, ranked from
highest to lowest capacity factor, is shown in Table 3. A satellite photo showing the location of these sites
is shown in Figure 2.
Table 3 – Key Parameters from the NREL Eastern Wind Database for Potential LBW Plants in
Maryland14
13 Development of Eastern Regional Wind Resource and Wind Plant Output Datasets, Subcontract Report NREL/SR-
550-46764, December 2009.
14 See data file EWITS_selected_sites.xlsx
Plant
Number Elevation
Wind
Speed
Capacity
Factor
AREA
(sq.km)
Capacity
(MW)
4401 943 7.36 0.322 5.2 100
5405 887 7.02 0.294 7.8 143.9
6211 851 6.79 0.275 5.6 100.8
6359 776 6.73 0.271 5.3 99.8
6526 879 6.7 0.267 9.5 189.6
6812 0 6.4 0.259 5.6 101.2
6931 515 6.44 0.256 7.8 155.2
7187 0 6.26 0.248 5.5 110.4
7460 0 6.22 0.239 5.6 112.8

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Figure 2 – Satellite Photo Showing Location of Potential LBW Plants in Maryland
The first five potential plants in the database are all located in extreme western Maryland in Garrett
County. The other plants are located in the eastern portions of the state on the Delmarva Peninsula, with
the exception of one location in the north central portion of the state.
A subset of these nine potential LBW plants was selected for further study based primarily on the
indicated capacity factor from the NREL Eastern Wind Database. Capacity factor is one of the key
drivers in overall wind plant economic viability. Wind plants, and their associated transmission
interconnection and network facilities, are capital intensive investments. Nearly all costs are fixed and
cannot be reduced or avoided during periods of non-operation. Therefore, capacity factor is one of the
key drivers of overall project economics, project finance ability, and probability of successful
implementation.
The plant sites were also checked for interference with radar and defense applications using the Federal
Aviation Administration (FAA) and Department of Defense (DoD) Preliminary Screening tool.15 The
status of aeronautical studies for each site was also checked. Finally, the sites were evaluated to ensure
that none of the potential plants would be located on state lands.
As a result of this screening process, four potential plants were selected to satisfy the LBW component of
the commitments (the “Selected LBW Plants”). Table 4 shows another summary of the potential plants,
with the cumulative expected available capacity and available energy production from the Selected LBW
Plants shown in the far right columns. The values for available capacity factor, available capacity and
15 See https://oeaaa.faa.gov/oeaaa/external/gisTools/gisAction.jsp?action=showLongRangeRadarToolForm.

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available energy are based on the 10-minute production forecast data extracted from the NREL Eastern
Wind Database for the 2006 meteorological year assuming use of an IEC Class 3 (100 meter hub-height)
wind turbine. 16 These values are different than the capacity factor and capacity values shown for these
plants in Table 3. The values in Table 3 are based on a composite average of Class 1, 2 and 3 wind
turbines whereas the values in Table 4 are based on use of Class 3 wind turbines. The database specifies
that Class 3 turbines could be used at each of the Maryland sites. Class 3 turbines are larger and yield
higher capacity factors than Class 1 and 2 turbines.
Table 4 – Potential Plants and the Selected LBW Plants
Three of the Selected LBW Plants are located in the western area and one in the eastern area of
Maryland. Potential plant 4401 is not far from the existing 70 MW Criterion Wind Project owned by
Constellation. An eastern plant was selected even though it has a relatively low expected capacity factor
so as to account for the potential that avian impacts or transmission costs may limit the number of
western plants that are eventually developed.
The cumulative net capacity of the Selected LBW Plants is similar to the LBW component of the
Proposed Wind Only Requirement (420 MW). The cumulative energy production is sufficient to satisfy
the number of RECs that MEA proposes that Exelon should obtain from Maryland LBW (1,100,000
MWh). The biomass component of the Proposed Renewable Energy Requirement, which is discussed in
section 5.7 of this report, would provide additional RECs.
16 The International Electrotechnical Commission (IEC) defines 3 classes of wind turbines for different wind regimes.
Class 1 turbines are for sites with average speeds of more than 8.5 m/s, Class 2 turbines are for sites with average
wind speeds of 7.5 m/s to 8.5 m/s. Class 3 turbines are for winds less than 7.5 m/s. The NREL Eastern Wind
Database states that Class 3 wind turbines (100 meter hub height) are suitable for use at the potential Maryland LBW
sites and therefore have been assumed in our assessment for this report.
Plant
Number Elevation
Available
Capacity
Factor
Available
Capacity
(MW)
Cummulative
Available
Capacity of
Selected Sites
(MW)
Available
Energy
(MWh)
Cummulative
Available
Energy of
Selected Sites
(MWh)
4401 943 36% 97 97 302,676 302,676
5405 887 33% 139 236 399,295 701,971
6211 851 31% 97 333 261,527 963,498
6359 776
6526 879
6812 0 30% 97 430 259,902 1,223,401
6931 515
7187 0
7460 0

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4. Implementation Challenges of the Selected LBW Plants
4.1 Transmission Constraints
Successful implementation of the Selected LBW Plants will require successful expansion of the existing
high voltage transmission system within and beyond Maryland. To assess the challenges of this
transmission system expansion, an electrical power flow analysis of the PJM high voltage transmission
system was first performed. This analysis was performed for the Selected LBW Plants, as well as for a
new 25 MW biomass plant to be located on the Delmarva Peninsula in Wicomico County. This new
biomass plant would be a component of the Proposed Wind/Biomass Requirement. A discussion of the
new biomass plant is provided in section 5.7 of this report.
For the Selected LBW Plants and the biomass plant, an initial survey of the transmission facilities near
the proposed sites was conducted.17 This information was used to identify the points of interconnection
(POI) listed in Table 5.
Table 5 – Points of Interconnection for LBW and Biomass Plants
Plant Point of Interconnection (POI) Distance to POI (miles)
4401 Oak Park 138kV 4.9
5405 Kelso Gap 138kV 2.0
6211 Jennings 138kV 6.2
6812 Chestertown 69 kV 13.2
Biomass New Market 69 kV 0.4
The proposed LBW and biomass plants were studied using the 2020 summer peak case from PJM’s 2010
FERC 715 filing. This case was the pre-project case. The post-project case was constructed by adding the
five plants, as described in Table 5. In accordance with PJM system impact study guidelines18, the five
plants were dispatched at their respective maximums, other wind resources dispatched to 20 percent of
their respective maximums, and generation across the rest of PJM scaled to accommodate these
changes.19 Single contingencies on all 100 kV and greater branches within PJM and 100 kV and greater
tie lines to other control areas were included in the analysis. Power flow simulations were performed
and the results monitored for new and increased branch violations in the post-project case, as compared
to the pre-project case. The results were further filtered, per PJM study criteria.20 The applicable thermal
violations are shown in Table 6.
17 Ventyx, Velocity Suite, Electric Transmission Lines. October 2011
18 PJM Manual 14B: Regional Transmission Planning Process, Revision 19, September 15, 2011.
19 PJM Manual 14B: Regional Transmission Planning Process, Revision 19, September 15, 2011.
20 Projects have a cost allocation if the contributing MW impact is greater than 5 MW and greater than 1 percent of
the applicable element rating AND, for facilities under 500 kV, the distribution factor must be greater than 5 percent
or the MW impact greater than 5 percent, or, for facilities 500 kV and greater, the distribution factor must be greater
than 10 percent or the MW impact greater than 5 percent.

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Two scenarios were considered for this analysis. For the “Proposed Wind Only Requirement”, only the
four LBW plants (4401, 5405, 6211 and 6812) were studied as described above. The resulting thermal
violations from the study are shown in Table 6.
Table 6 – Violations Attributable to the Projects under the Proposed Wind Only Requirement
From Substation To Substation Circuit Post-Project Loading (%)
Glasgow 138 kV Cecil 138 kV 1 280
Chichester 2 230 kV Linwood 230 kV 1 149
Albright 138 kV Snowy Creek Tap 1 114
Elk Garden 138 kV Kelso Gap 1 112
Snowy Creek Tap Oak Park 138 kV 1 112
Elk Garden 138 kV Parr Run 138 kV 1 111
Brighton 500 kV Brighton 014 230 kV 1 105
Junction 138 kV Parr Run 138 kV 1 104
All of the thermal violations occurred under contingency conditions, as described above. The last
column indicates the flow on the corresponding branch as a percentage of its contingency limit (Long
Term Emergency (LTE) rating). Hence, a loading greater than 100 percent in the post-project case, that
did not occur in the pre-project case, indicates a thermal violation introduced by the projects. The
loadings shown in the table are the highest loading for the corresponding branch, under all of the single
contingencies evaluated. The cost implications for each of the projects are described in Section 5.2.
For the Proposed Wind/Biomass Requirement, three LBW plants and the biomass plant were assumed to
be built and the power flow analysis conducted using the methodology described above. Specifically,
plants 4401, 5405, 6812 and the biomass plant were included in this scenario. Plant 6211 was assumed to
not have been developed due to its poor economics relative to 6812. The applicable thermal violations
are shown in Table 7.

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Table 7 – Violations Attributable to the Projects under the Proposed Wind/Biomass Requirement
From Substation To Substation Circuit Post-Project Loading (%)
Glasgow 138 kV Cecil 138 kV 1 280
Albright 138 kV Snowy Creek Tap 1 114
Elk Garden 138 kV Kelso Gap 1 112
Snowy Creek Tap Oak Park 138 kV 1 112
Elk Garden 138 kV Parr Run 138 kV 1 111
Brighton 500 kV Brighton 014 230 kV 1 105
Milford 230 kV Indian River 4 230 kV 2 104
Junction 138 kV Parr Run 138 kV 1 104
Note that dynamic stability, low voltage ride-through, and short circuit studies were not conducted as
part of this analysis. It is possible that these studies would show that additional upgrades are required.
Hence, the list of violations should be considered as the minimum impact caused by the proposed
projects. The above branches were assumed to be rebuilt for purposes of this high level analysis.
Since nearly a decade remains between now and the expected on-line dates for the potential plants, one
would not expect significant timing issues with the official study process and implementing the
necessary transmission upgrades. This assumes that the process is started soon and that no significant
obstacles are encountered during the process.
4.2 Environmental Challenges
Successful implementation of the Selected LBW Plants will require successful pre-construction field
surveys, monitoring and permitting pursuant to local, state and federal requirements. To assess the
challenges of this permitting, a survey of regulatory requirements and the status or results of recent
permitting efforts was performed.
4.2.1 Permitting Processes
Development of LBW resources in Maryland requires compliance with numerous regulatory
requirements and the issuance of multiple permits. While the specific list of regulatory and permitting
requirements for a project cannot be identified without a specific project footprint (including the
transmission interconnection route, location of staging areas and access routes, etc.), a list of potential
requirements can be identified. Table 8 identifies these potential requirements. Not all of the
requirements shown would be required for every individual project.

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Table 8 – List of Potential Permits for Wind Development in Maryland
Regulatory Agency -Permitting or
Regulatory Action Description
Maryland Public Services
Commission (PSC) – Certificate of
Public Convenience and Necessity
(CPCN)
CPCN Application or CPCN Exemption (see section 4.4.2 State of Maryland))
Lead Agency - Compliance with
National Environmental Policy Act
(NEPA)
Compliance with NEPA could be required if the project crosses any Federal land
or would require any major Federal Action.
NEPA compliance would be in the form of a Categorical Exclusion (schedule
range of 1 to 3 months), an Environmental Assessment/Finding of No Significant
Impact (EA/FONSI) schedule range of 4 to 6 months or an Environmental Impact
Statement/Record of Decision (EIS/ROD) (schedule range of 12 to 18 months). The
likelihood that an EIS would be required for a project is considered low.
U.S. Fish and Wildlife Service
(USFWS) - Federal Endangered
Species Act (FESA)
Migratory Bird Treaty Act
Compliance with FESA is required for potential impacts to federally listed
threatened and endangered species. An incidental take permit is required when
non-federal activities will result in “take” of threatened or endangered wildlife. A
habitat conservation plan (HCP) must accompany an application for an incidental
take permit for non-federal activities. The purpose of the incidental take permit is
to authorize the incidental take of a listed species, not to authorize the activities
that result in take. Initial consultation with USFWS should be conducted.
Low-effect HCPs involve minor effects on federally listed, proposed, or candidate
species and their habitats covered and minor effects on other environmental
resources and do not require NEPA compliance and take about 3 months to obtain.
HCPs that do not fall into the “Low Effect” category and require either an EA or
an EIS, depending on their complexity. For those requiring an EA as part of the
permit application, the target permit processing time is 4 to 6 months. For those
requiring an EIS, the target permit processing time may be up to 12 months. The
likelihood that an EIS would be required for a project is considered low.
U.S. Army Corps of Engineers
(Corps) - Clean Water Act Section
404
Authorization is required when dredged or fill material is discharged into waters
of the U.S., including wetlands. Authorization can come in the form of an
Individual Permit or a Nationwide Permit. An Individual Permit is typically
issued for activities involving wetlands and more than minimal impacts.
Maryland Department of the
Environment (MDE) Water
Management Administration –
Section 401 Water Quality
Certification
Validates the Corps 404 Permit by certifying that a project will not impact
Maryland water quality standards. The permit is required if a project will alter a
floodplain, waterway, tidal, or non-tidal wetland.
MDE - General Permit for
Construction Activity
Projects that disturb one or more acres of earth must apply for either a General or
Individual Permit for Stormwater Associated with Construction Activity. Projects
that will disturb 150 acres or more and which discharge to a water listed as
impaired on Maryland’s 303(d) list must apply for an individual permit (an
individual permit requires an application in accordance with the United States
Environmental Protection Agency's (EPA) National Pollutant Discharge
Elimination System (NPDES) regulations at 40 C.F.R. Part 122, w. All other
projects may apply for a general permit.
MDE – Air Quality Permit to
Construct
An Air Quality Permit to Construct applies to any minor, new, or modified or
reconstructed sources of air pollution.
National Historic Preservation Act
of 1966 (NHPA) and the Maryland
Historical Trust Act
Section 106 requires federal agencies to take into account the effects of their
undertakings on historic properties through project consultations and provides for
coordination when a federally licensed undertaking may cause irreparable
damage to significant cultural resources. Section 106 regulations set forth
procedures to be followed for determining eligibility of cultural resources,
determining the effect of the undertaking on the historic properties, and how the
effect would be taken into account.

Page 16
Regulatory Agency -Permitting or
Regulatory Action Description
Federal Aviation Administration
(FAA) Title 14 Part 77 - Notice of
Proposed Construction –
Form 7460-1
FAA Regulations require notice of any construction or alteration that is (a) more
than 200 feet in height above ground level or (b) greater than certain planes
extending outward and upward at specified radius and slopes from the nearest
runway of certain airports.
Department of Natural Resources
State’s Wildlife and Heritage
Service – State Endangered Species
The Wildlife and Heritage Service regulates many activities that affect Maryland's
wildlife or rare, threatened, and endangered animal and plant species. They serve
as the lead state agency responsible for the identification, ranking, protection, and
management of rare and endangered species and natural communities in
Maryland. When potential impacts are identified, Regional Ecologists work with
the applicant to avoid or minimize disturbance.
An Environmental Review can be requested early during the project planning
phase to assess species and habitats of concern and review projects for potential
impacts to rare species.
Garrett County and Kent County -
Land Use and Zoning Permits
Grading Permit
Building Permit
Road Permits
For wind projects that receive an Exemption from a CPCN, counties generally
have the authority to specifically restrict or authorize construction through local
zoning rule, regulation, law, or by ordinance if they have adopted an
implementing ordinance and comprehensive plan.
4.2.2 State of Maryland
The Maryland Public Service Commission (PSC) is the lead agency for the granting of licenses for the
siting, construction, and operation of power plants and transmission lines greater than 69 kV in the state.
For proposed wind projects, the PSC may issue either a Certificate of Public Convenience and Necessity
(CPCN) or an Exemption from a CPCN.
Under the CPCN process, the Maryland Department of Natural Resources Power Plant Research
Program (PPRP) is responsible for coordinating the state’s consolidated environmental review, and it
normally represents the state’s position before the PSC in licensing cases.21 The CPCN approval process
subsumes within it a number of other permits and authorizations that usually would be under the
purview of other state and local agencies if not for the CPCN. The PPRP considers land use compatibility
and zoning designations as part of the overall project evaluation. However, an applicant does not need
to obtain formal zoning approval from the local planning authority. The CPCN process supersedes local
zoning requirements. After the CPCN is obtained, the project may be constructed as licensed. If multiple
facilities are located in close proximity, or are proposed in close proximity to each other or to existing
plants, PPRP would also analyze cumulative impacts.
To be eligible for the Exemption from a CPCN, wind projects must be land-based, have a capacity of less
than 70 MW, and sell electricity on the wholesale market pursuant to an interconnection, operation, and
maintenance agreement with the local electric company. The agreements with the local electric company
must be filed with the PSC before an application is approved. A wholesale sales agreement with PJM is
also required. Since each of the Selected LBW plants would be greater than 70MW in capacity, they
would not be eligible for a CPCN Exemption.
21 PPRP coordinates the project review and consolidates comments from the Departments of Natural Resources,
Environment, Agriculture, Business and Economic Development, Planning, and Transportation, and the Maryland
Energy Administration.

Page 17
4.2.3 Anticipated Challenges
Generally expected environmental issues on proposed wind projects include avian mortality (bats and
birds), impacts on endangered species or sensitive habitats, visual and land-based impacts, and impacts
to cultural resources. To help address the avian mortality issue, a technical advisory group to the PSC
developed guidelines for monitoring protocols for birds and bats during pre- and post-construction
phases. In the case of the Criterion Wind Project, two years of pre-construction surveys for bird and bat
species were conducted.22 It is likely that similar preconstruction survey requirements would be required
for any new wind development with similar species issues.
Potential issues that could be raised by interveners can be identified by looking at the recent experience
of other wind projects in the state including Constellation’s Criterion Wind Project and Synergics’ Roth
Rock Wind Project. Both projects are located in Garrett County. The Criterion Wind Project was subject
to opposition by Save Western Maryland over the potential effects on the federally listed Indiana Bat.
The project is now operational and no endangered species were “taken” during project construction or
operation.23 The Criterion Wind Project website reports that Constellation is working with state and
federal governmental authorities to avoid impacts to the Indiana bat, specifically working with
governmental authorities in connection with the “incidental take” process.” Synergic’s Roth Rock Project
was accused of violating the Federal Endangered Species Act (FESA) by “taking” species24. These recent
concerns (with particular regard to bat species) could be exacerbated by the cumulative effect of
introducing more wind projects in the same general area of western Maryland.
Development of a wind project in eastern Maryland would also be required to address avian mortality in
concert with the guidelines referenced above. Based on a review of the listed of rare, threatened and
endangered species for Kent County as of April 2010, there are no federally listed bird or bat species
identified as being located in the county.25 Federally listed species include the Shortnose sturgeon,
Puritan Tiger Beetle and Delmarva Fox Squirrel. Potential impacts to these species would be addressed
through coordination with regulatory agencies, permitting and mitigation.
There has also been local opposition to wind farms in Maryland on the basis of aesthetics. When the
Criterion Project was completed in 2011, Maryland State Delegate Wendell R. Beitzel indicated that the
local community was divided on the project and that “residents in town and second-home owners are
generally opposed, seeing the turbines as a visual scar.”26 As the project was being built in August 2010,
residents also complained about losing scenic views and the wind farm “posing a threat to nearby
residents’ health and safety.”27 Maryland citizens also attended hearings at the state capitol to protest
wind farms.28
A number of Maryland-based organizations have mandates that include maintaining the natural beauty
of the state. These include Save Western Maryland, Maryland League of Conservation Voters, and
Maryland Conservation Council. In addition, individual citizens also pursue similar goals and have been
22 See http://www.dnr.state.md.us/irc/docs/00013918.pdf.
23 See http://www.pacificlegal.org/page.aspx?pid=1573
24 See http://www.scribd.com/doc/35040427/Synergics-60-Day-ESA-Notice
25 See http://www.dnr.state.md.us/wildlife/Plants_Wildlife/rte/rteanimals.asp
26 See http://articles.baltimoresun.com/2011-07-19/features/bs-md-wind-turbine-opening-20110719_1_wind-turbines-
wind-project-wind-farm
27 http://articles.baltimoresun.com/2010-08-02/features/bs-gr-wind-farm-20100802_1_wind-project-backbone-
mountain-commercial-wind
28 http://news.heartland.org/newspaper-article/2008/04/01/citizens-protest-wind-farm-plan-maryland

Page 18
jointly involved with the organizations mentioned. To date, these groups have been active in protesting
wind farms on the basis of environmental concerns.
Another consideration for siting wind farms is potential conflicts with military activities. In September
2011, officials at Patuxent River Naval Air Station raised concerns that turbines proposed for sites in
Somerset County could interfere with radar at the St. Mary’s County facility.29 These concerns were also
raised in 2010 when offshore wind (off the shore of Maryland) was being discussed.30
4.2.4 Anticipated Costs
It is difficult to estimate with precision the cost and duration for permitting of a wind project without a
specific footprint established for the site, access roads, staging areas and electric interconnection. The
majority of permitting costs would be expended on performing environmental studies, preparation and
management of permitting applications and obtaining land easements. Environmental studies would
likely include avian risk assessments, breeding bird surveys, assessment for potential bat roosting and
foraging in the project area, a vegetation survey, wetlands delineation, and historic property evaluation.
Cost of these studies and overall permitting would likely range from $300,000 for a smaller project with
limited impact, to $1 million for a more complicated larger project with more environmental impacts and
landowners.
4.2.5 Anticipated Schedule
The general schedule for the permitting of a wind project is discussed below. Timeframes were based on
agency guidelines as well as schedules associated with other recently developed wind projects in the
state. It is important to note that these schedule ranges can vary and have the potential to be extended
based on agency personnel availability, details of the project being proposed, public opposition, and
other issues.
Application preparation time, pre-construction survey work, the gathering of meteorological wind data,
etc., are estimated to require up to 24 months of time. Two years of time was required for
preconstruction surveys for the Criterion Wind Project.
Processing through the PSC is expected to require seven to nine months of time in the case of a full
CPCN review. The Criterion Project originally obtained a CPCN to construct 101 MW of wind and the
process took about seven months. The project was later resized to 70 MW and changes were processed
by the PSC in one to two months.
Securing other necessary permits could occur simultaneously with the CPCN processes.31 To be
conservative, an additional two to four months of time should be assumed at the end of the state process
to obtain federal permits (i.e., FAA, USFWS or the Corps).
The total start-to-finish duration of the above described permitting process is therefore expected to be
approximately 32 months in the case of a full CPCN process.
29 http://www.delmarvanow.com/article/20110912/NEWS01/109120308/Officials-attend-wind-energy-forum
30 http://articles.baltimoresun.com/2010-11-10/features/bs-gr-offshore-wind-20101108_1_wind-turbines-nrg-
bluewater-wind-offshore-wind
31 For the CPCN process, the PPRP coordinates the project review and consolidates comments from the Departments
of Natural Resources, Environment, Agriculture, Business and Economic Development, Planning, and
Transportation, and the Maryland Energy Administration – requirements from these agencies would be included in
the CPCN.

Page 19
5. Cost of the Proposed Renewable Energy Requirements
5.1 Estimated Installed Costs of LBW Plants
Installed cost for a LBW plant is a function of several factors, including the cost for equipment and labor
and the size and location of the wind plant. In 2010, the capacity-weighted average installed cost for a
U.S. wind plant was $2,155/kW.32 Projects in the eastern U.S. were approximately 5 percent more
expensive at $2,250/kW.33 Plants situated in mountainous terrain can be significantly more expensive due
to increased development costs, transportation costs, siting and permitting requirements and
timeframes, and other balance-of-plant and construction expenditures.
Installed costs have decreased since 2010 due to worldwide declines in wind turbine prices which
comprise 60-65 percent of the total installed cost of a typical wind plant. Turbine prices in the U.S. are
currently in the $1,100-$1,400/kW range, down over 30 percent from the peak levels of $1,400-$1,600/kW
in 2009.34 Based on these lower wind turbine prices, we estimate that current (2011) installed costs in the
eastern U.S. are approximately $1,880/kW for utility-scale wind farms on relatively flat terrain (such as
eastern Maryland) and $2,450/kW for wind plants on relatively mountainous terrain (such as western
Maryland) assuming the use of Class 3 (100 meter hub height) turbines.
We expect that the installed cost of LBW will decrease by approximately 2 percent/year in real terms
over the next several years due to continued advancements in wind turbine technology and
manufacturing. This long term trend of price decline is subject to disruption or reversal if and to the
extent that there are disruptions in the availability or cost of steel and other raw materials necessary for
wind turbine manufacturing, or there are significant increases in interest rates and other global financial
conditions.
Table 9 summarizes our estimates of total installed costs per kilowatt for LBW plants in Maryland across
the aforementioned location scenarios.
Table 9 – Estimated Installed Cost per Kilowatt of a LBW Plant in Maryland
Total Installed Cost, $/kW (2011$)
2011 2016 2022
Flat terrain 1,880 1,700 1,500
Mountainous terrain 2,450 2,210 1,960
The estimates assume a nominal amount of transmission and permitting costs. .
5.2 Estimated Installed Cost of the LBW and Biomass Transmission Facilities
For purposes of estimating costs of transmission facilities for the proposed projects, 2011 cost
information from the Eastern Interconnection Planning Collaborative (EIPC)35, along with information
32 Wiser, Ryan and Mark Bollinger, U.S. Department of Energy, 2010 Wind Technologies Market Report, June 2011,
p. 46-47.
33 Wiser and Bollinger, p. 49.
34 Wiser and Bollinger, p. 51.
35
http://www.eipconline.com/Task_5_Results.html

Page 20
from PJM generator interconnection studies36 was used. The former provided general guidance on costs
per mile for upgrades, with allowances for substation and transformer improvements. The latter was
used for new substation costs at the generator site. This cost information was combined with the results
from Section 4.1 to yield the results shown in this section
Transmission facilities for a power plant consist of direct connection and system upgrade costs. Direct
connection costs reflect the transmission facilities needed to connect the generation to the existing system
at the generator’s point of interconnection (POI). System upgrades are improvements to the existing
grid necessary to support the new generation. Currently in PJM, if a generator funds network upgrades
that are used by newer generators within five years, the initial generator can receive some level of
reimbursement from the subsequent generators. Further, generators receive incremental auction revenue
rights (ARR) for any incremental capacity created by their interconnection.37 Hence, there is a possibility
that a generator would be reimbursed for some of the network upgrade costs. There is also a possibility
that the generators proposed here might have to reimburse prior queued generators for system
upgrades.
A summary of the estimated direct and system upgrade costs for each plant in the Proposed Wind Only
Requirement (LBW plants 4401, 5404, 6211 and 6812) is shown in Table 10.
Table 10 – Estimated Transmission Cost (2011 $M) for the Proposed Wind Only Requirement
Plant Number 4401 5405 6211 6812
Direct Connection Cost
($M 2011)
$8.64 $5.42 $10.09 $17.80
System Upgrade Cost
($M 2011)
$9.52 $14.22 $0.07 $0.64
Total Transmission Cost
($M 2011)
$18.16 $19.64 $10.16 $18.44
Analysis was also conducted for the Proposed Wind/Biomass Requirement which considered three LBW
plants (4401, 5405 and 6812) and the biomass plant. Table 11 summarizes the direct connection and
system upgrade costs for each plant in the Proposed Wind/Biomass Requirement.
36 http://www.pjm.com/pub/planning/project-queues/impact_studies/s14_imp.pdf,
http://www.pjm.com/pub/planning/project-queues/feas_docs/w4017_fea.pdf
37 http://www.caiso.com/Documents/Presentation-
TransmissionPlanning_GenerationInterconnectionIntegrationMeeting_Sep_19_2011.pdf

Page 21
Table 11 – Estimated Transmission Cost (2011 $M) for the Proposed Wind/Biomass Requirement
Plant Number 4401 5405 6812 Biomass
Direct Connection Cost $8.64 $5.42 $17.80 $3.54
System Upgrade Cost $9.51 $14.21 $0.64 $0.00
Total Transmission Cost $18.16 $19.63 $18.44 $3.54
5.3 Estimated Installed Cost of the Proposed Wind Only Requirement
The cost per kilowatt estimates for LBW plants in Maryland can be used to estimate the installed cost of
the Selected LBW Plants. Inclusion of the installed costs of the direct and network transmission facilities
for each Selected LBW Plant will result in an estimate of the overall installed cost of the entire Proposed
Wind Only Requirement. A summary estimate is shown in Table 12 below.
Table 12– Estimated Installed Cost of the Proposed Wind Only Requirement
The installed cost years were chosen based on the expected overall duration for pre-construction
permitting, interconnection, and construction of the necessary plants and transmission facilities. For the
commercial operation years other than 2016 or 2022, the estimated installed cost ($/kW) was prorated
between the values shown in Table 9. The $/kW costs shown are in nominal dollars, reflecting inflation
to the installed year date at a 2.0 percent annual rate.
Results show that the estimated installed cost of the entire LBW component of the Proposed Renewable
Energy Requirement would be over $1 billion. The eastern LBW plant (6812) is the least costly due to its
location in flat terrain and its construction relatively late in the study period allowing it to benefit from
expected wind turbine price declines.
5.4 LBW Operating Costs
Similar to installed cost, operating and maintenance (O&M) cost for LBW is a function of several factors,
most notably plant age, vintage (year of initial operation), size, and location. Generally O&M costs are
higher for (a) plants using older technology, (b) plants more than five years old, (c) smaller plants, and
(d) plants in mountainous terrain and high labor cost areas.
Plant Site 4401 5405 6211 6812 Total
Location West West West East
Terrain Mountainous Mountainous Mountainous Flat
Available Capacity (MW) 97 139 97 97 430
Available Energy (MWh) 302,676 399,295 261,527 259,902 1,223,401
Installed Year 2016 2018 2020 2022
Plant Installed Cost ($/kw) $2,440 $2,439 $2,438 $1,865
Plant Installed Cost ($ million) $244 $351 $246 $189 $1,030
Direct Transmission ($ million) $9 $5 $10 $18 $42
Network Transmission ($ million) $10 $14 $0 $0 $24
Total Installed Cost ($ million) $262 $371 $256 $207 $1,096

Page 22
The primary components of O&M costs are plant labor (in-house and subcontracted), preventive
maintenance, corrective maintenance, and overhead. Corrective maintenance is the largest and most
variable component and will increase significantly over the lifetime of a wind plant.
O&M costs during 2000-2010 averaged $22/MWh for U.S. LBW plants installed in the 1990s and
$10/MWh for plants installed since 2000. The higher cost observed for the older plants reflects the impact
of increasing corrective maintenance costs with age. We therefore estimate that O&M costs will average
approximately $14/MWh over the life of a LBW plant that was installed in 2010. Similar to installed costs,
premiums should be expected for plants in the eastern U.S. and in mountainous areas.
We expect that O&M costs will follow the long-term downward trend of installed costs due to
improvements in wind turbine reliability, maintainability and maintenance practices. Table 13
summarizes our estimates of O&M costs for LBW plants in Maryland across the aforementioned location
scenarios, illustrating this downward trend.
Table 13 – Estimated O&M Cost for a LBW Plant in Maryland
Total O&M Cost, $/MWh (2011$)
2011 2016 2022
Flat terrain 14.36 12.98 11.51
Mountainous terrain 15.79 14.28 12.66
5.5 Economic Viability of the Proposed Wind Only Requirement
The economic viability of each LBW plant was assessed by modeling the expected annual revenues,
costs, investment, financing, production tax credits and other aspects of each plant as a standalone entity
selling power into the wholesale power markets over an operating term of 20 years. We forecast the
initial capital contributions necessary for plant construction, and then the net operating cash flows that
would be generated by each plant based on certain key power production, REC sale price, energy sale
price, and operating cost assumptions. We then calculated the after-tax weighted average cost of capital
for each plant based on the financing assumptions, and used this rate to calculate a 2016 net present
value (NPV) of the operating cash flows. We used an after-tax basis to be consistent with the
methodology used by industry participants to estimate economic viability of renewable power plants. A
positive NPV is indicative of an economically viable plant. A negative NPV indicates that an owner, if it
were to build and operate the plant, would suffer an economic loss since returns from the plant would
not be sufficient to cover the cost of debt and equity used to build the plant.
Revenues for each plant consist of energy sales, capacity sales and REC sales.
Energy would be sold into the PJM wholesale electricity market at prices determined by a competitive
process wherein all generators are paid the market-clearing price for each hour of operation. A forecast
of hourly market clearing prices for the entire PJM market for the entire 20 year study period was
obtained from a well known vendor of such forecasts.38 These were then multiplied by the available
energy estimates provided in the NREL Eastern Wind Database to forecast plant energy revenues.
38 Ventyx Power Reference Case, Electricity and Fuel Price Outlook, Midwest Region, Spring 2011, 2011 Midwest
Spring 2011 Power Reference Case - Hourly MCPs.xls.

Page 23
Capacity would also be sold into the PJM market at prices determined from recent capacity auctions held
by PJM. Wind plants are paid a discounted capacity price reflecting the intermittent nature of the
resource and therefore its capacity to serve load. A summary of the recent and future PJM capacity
prices was obtained from the same well known vendor.39 These were then multiplied by the expected
maximum production level provided in the NREL Eastern Wind Database.
RECs would be sold into the REC markets. A forecast of annual REC prices was obtained from a recent
forecast provided by the State of Maryland. This forecast is summarized in the table below. This forecast
has been used for this assessment because it is publicly available and relevant to the venue of the
proceeding. We have not performed an in-depth assessment of the methodology, assumptions or other
key factors driving this forecast. We draw no conclusions concerning the validity or accuracy of this
forecast.
Table 14 – REC Price Forecast from the State of Maryland40
The installed cost for each plant was based on the aforementioned unit costs per kW, escalated to the
year of commercial operation at 2.0% to reflect construction cost escalation, and multiplied by the
available capacity (kW) provided in the NREL Eastern Wind Database. This cost was then assumed to
be financed with 65% equity from investors at a 13% required return on equity, and 35% long-term (20
year) project financing at an interest rate of 6%. This debt equity split, return on equity, debt term and
interest rate are consistent with those we would expect a wind project without a long-term (15-20 year)
39 Ventyx Power Reference Case, Electricity and Fuel Price Outlook, Midwest Region, Spring 2011, 2011 Midwest
Spring 2011 Power Reference Case – Data Supplement.xls
40 Long-Term Electricity Report for Maryland, Table 14.16 - Estimated Maryland REC Prices ($2010 per MWh), for
the Reference Case. Prepared for the Maryland Department of Natural Resources Power Plant Research Program,
September 23, 2011
REC Price
Year ($2011 /MWh)
2010 $2.00
2011 $2.00
2012 $3.00
2013 $16.00
2014 $28.00
2015 $26.00
2016 $25.00
2017 $24.00
2018 $24.00
2019 $24.00
2020 $25.00
2021 $24.00
2022 $25.00
2023 $24.00
2024 $22.00
2025 $18.00
2026 $17.00
2027 $16.00
2028 $14.00
2029 $13.00
2030 $12.00

Page 24
REC purchase contract. Currently, long term REC purchase contracts are not being offered by electric
utilities and other purchasers in the PJM marketplace. The strong supply of RECs has allowed utilities to
purchase their requirements on short term arrangements. Without a long-term REC purchase contract,
there is less certainty of revenues, and lenders will be unwilling to finance a majority of the capital
requirement.
The operating and maintenance cost for each plant was based on the aforementioned unit costs per
MWh escalated to the commercial operation year and thereafter at 2.0%, multiplied by the expected
maximum production level provided in the NREL Eastern Wind Database.
Accelerated 5 year depreciation was applied to the wind plant cost, with 15 year depreciation applied to
the transmission facility costs.
Results of the economic analysis for the Selected LBW Plants are provided in the table below.
Table 15 – Estimated Economic Viability of the Proposed Wind Only Requirement
Results show that none of the plants would achieve a positive NPV. The eastern wind site (6812) shows
the least loss. This is due to its construction on flat terrain, relatively late commercial operation year in
combination with the aforementioned declining wind turbine generator prices, and the increasing
energy, capacity and REC prices throughout the period of analysis.
5.5.1 Economic Viability Under an Alternative REC Price Forecast
The economic viability assessment described above assumes that future REC prices will be as shown in
the REC Price Forecast from the State of Maryland. The forecast shows that REC prices will increase
significantly over the next few years. It is possible that REC prices will not increase, but rather remain at
the level shown in the early years of the forecast for the duration of the study period (the “Current REC
Price Scenario”). Maryland Tier 1 RECs have recently been reported to be selling for less than $2.41 The
table below provides a comparison of the REC prices under the forecast from the State of Maryland with
those from the Current REC Price Scenario.
41 SNL RECs Index, week ending 8/12/2011, SNL Interactive data service.
Plant Site 4401 5405 6211 6812 Total
After Tax WACC 10% 10% 10% 10%
2016 After-tax NPV @ WACC ($ million) ($83) ($97) ($57) ($23) ($260)

Page 25
Table 16 – Comparison of REC Price Forecasts
We re-assessed the economic viability of the Selected LBW Plants using the Current REC Price Scenario.
Results are summarized in the table below.
Table 17 – Estimated Economic Viability of the Wind Only Requirement under the Current REC Price
Scenario
Clearly, economic viability deteriorates even further in the case where REC prices are lower than those
shown in the forecast from the State of Maryland.
State of
Maryland
Current REC
Price Scenario
Year ($2011 /MWh) ($2011 /MWh)
2010 $2.00 $2.00
2011 $2.00 $2.00
2012 $3.00 $2.00
2013 $16.00 $2.00
2014 $28.00 $2.00
2015 $26.00 $2.00
2016 $25.00 $2.00
2017 $24.00 $2.00
2018 $24.00 $2.00
2019 $24.00 $2.00
2020 $25.00 $2.00
2021 $24.00 $2.00
2022 $25.00 $2.00
2023 $24.00 $2.00
2024 $22.00 $2.00
2025 $18.00 $2.00
2026 $17.00 $2.00
2027 $16.00 $2.00
2028 $14.00 $2.00
2029 $13.00 $2.00
2030 $12.00 $2.00
Plant Site 4401 5405 6211 6812 Total

Page 26
5.5.2 REC Price Levels Necessary to Achieve Economic Viability of the Selected LBW Plants
As a further examination of the effect of REC prices on economic viability, we calculated the REC price
level that would be necessary in order for the Selected LBW Plants to achieve economic viability. Results
of this calculation are shown in the table below. The table also includes a forecast of the Alternative
Compliance Payment (ACP) for Maryland. The ACP rate is currently 4.0¢/kWh ($40/MWh) for non-solar
Tier 1 shortfalls.
Table 18 – REC Prices Necessary to Achieve Economic Viability for the Selected LBW Plants versus
the Alternative Compliance Payment (ACP) (Nominal Year $/MWh)
Results show that REC prices would need to be significantly higher than those shown in the forecast
from the State of Maryland if the Selected LBW Plants are to achieve economic viability. Potential LBW
plant 6812 would need the lowest REC price to achieve economic viability. Results also show that these
REC prices are significantly higher than the ACP rate. This indicates that it would be more economic for
an entity subject to the Maryland RPS (such as the Applicants) to pay the ACP rate than to purchase
RECs from the potential plants.
5.6 LBW in Maryland vs. Other PJM Locations
The ideal plant location for LBW is in flat terrain with a relatively high capacity factor (>30 percent).
There is only one such Maryland site in the NREL Eastern Wind Database that meets both of these
criteria, 6812. The other potential sites with high capacity factors are in mountainous terrain. Given the
large and diverse geographical area covered by PJM, there is a good chance that other potential sites may
meet the above criteria of both high capacity factor and flat terrain.
We reviewed the NREL Eastern Wind Database to identify potential LBW plants outside of Maryland.
We focused on potential plants that 1) are located within PJM consistent with the map of renewable
4401 5405 6211 6812 ACP
2010
2011 $40.00
2012 $40.00
2013 $40.00
2014 $40.00
2015 $40.00
2016 $79.50 $40.00
2017 $79.50 $40.00
2018 $79.50 $82.81 $40.00
2019 $79.50 $82.81 $40.00
2020 $79.50 $82.81 $86.08 $40.00
2021 $79.50 $82.81 $86.08 $40.00
2022 $79.50 $82.81 $86.08 $52.41 $40.00
2023 $79.50 $82.81 $86.08 $52.41 $40.00
2024 $79.50 $82.81 $86.08 $52.41 $40.00
2025 $79.50 $82.81 $86.08 $52.41 $40.00
2026 $79.50 $82.81 $86.08 $52.41 $40.00
2027 $79.50 $82.81 $86.08 $52.41 $40.00
2028 $79.50 $82.81 $86.08 $52.41 $40.00
2029 $79.50 $82.81 $86.08 $52.41 $40.00
2030 $79.50 $82.81 $86.08 $52.41 $40.00

Page 27
plant interconnection requests provided by PJM, and 2) are located in Illinois and Indiana since the
terrain in these states is generally flat relative to the other more easterly states within PJM, and 3) have
estimated capacity factors higher than the highest capacity factor potential plant in Maryland (plant
number 4401).
Our review identified 27 potential plants in Illinois and six potential plants in Indiana with capacity
factors higher that plant number 4401 in Maryland. The table below summarizes the details on the
identified plants. The potential plants are ordered by capacity factor, highest to lowest.

Page 28
Table 19 – Summary of Potential LBW Plants In Illinois and
Indiana relative to the Highest Capacity Factor Potential
LBW Plant in Maryland from the NREL Eastern Wind Database
5.7 Poultry Litter Based Biomass
5.7.1 Current State of Development
Poultry litter can be used to fuel biomass power production. Poultry litter production on the Delmarva
Peninsula has been estimated at slightly over 700,000 tons of per year. The predominant use of poultry
Plant Number State Elevation
Capacity
Factor
Gross
Capacity
(MW)
3579 Indiana 229 0.343 366.1
3693 Illinois 270 0.34 853.9
3902 Illinois 298 0.335 387
3945 Illinois 262 0.334 460
3978 Illinois 271 0.333 1233.7
4022 Illinois 251 0.332 293.1
4023 Illinois 254 0.332 365.2
4024 Indiana 227 0.332 822.7
4093 Illinois 251 0.33 812.5
4094 Illinois 247 0.33 1101.7
4102 Indiana 206 0.33 226.7
4136 Indiana 256 0.329 1131.2
4140 Illinois 226 0.329 811.8
4177 Illinois 291 0.328 1033.1
4181 Illinois 241 0.328 555.8
4208 Illinois 234 0.327 1052.5
4209 Illinois 226 0.327 1013.9
4214 Illinois 219 0.327 255.4
4241 Illinois 228 0.326 1046.6
4242 Illinois 295 0.326 392.6
4247 Illinois 257 0.326 350.8
4248 Indiana 239 0.326 422.3
4284 Indiana 229 0.325 1132.2
4285 Illinois 253 0.325 568.1
4290 Illinois 249 0.325 402.2
4327 Illinois 232 0.324 246.3
4328 Illinois 229 0.324 407.6
4364 Illinois 214 0.323 565.7
4365 Illinois 235 0.323 578.3
4366 Illinois 238 0.323 354.9
4367 Illinois 211 0.323 246
4397 Illinois 280 0.322 391
4398 Illinois 244 0.322 586
4401 Maryland 943 0.322 100

Page 29
litter is land application as a crop nutrient source. However, poultry growers are worried that future
poultry litter use restrictions will restrict poultry litter use on crop land, leading to an excess of poultry
litter with few profitable alternative uses.42
There are currently no poultry litter based power plants in Maryland. The only large-scale poultry litter
based biomass power plant in the U.S. is a 55 MW facility that entered service in 2007 near Benson,
Minnesota.43 The facility burns more than 600,000 tons per year of turkey litter. There are also three
poultry-fired biomass plants in the United Kingdom at Eye (12.7 MW, opened in 1992), Glanford (13.5
MW, opened in 1993) and Thetford (38.5 MW, opened in 1998). Dutch utility company Delta NV began
operating a 36.5 MW poultry litter fueled biomass plant in Europe in September 2011.44
5.7.2 Fuel Supply and Challenges
Poultry litter is a more challenging fuel than wood due to higher nitrogen and sulfur levels leading to
higher NOx and SOx emission rates. Relatively high chloride and alkali levels increase the potential for
particulate emissions and corrosion problems, and relatively high ash levels requiring higher-volume
ash-handling equipment and more attention to particulate removal, slagging, and fouling.45
It is highly likely that either Somerset or Wicomico County would be the most economic location for a
poultry-fired biomass power plant in Maryland. These two counties represent approximately 47 percent
of Maryland’s poultry production (perhaps 350,000 tons per year of poultry litter). Nearby Caroline and
Queen Anne’s counties represent approximately 17 percent of the state total.
A 25 MW poultry litter fired biomass plant would require approximately 350,000 tons per year of
poultry litter as fuel assuming an operating capacity factor of 85%, a poultry litter heat content of 6394
Btu/lb, a poultry litter moisture content of 27%, and the same power generating technology as the
aforementioned plant in Benson, Minnesota. As this is equal to the entire estimated volume of poultry
litter available from both Somerset and Wicomico counties, and that competing uses for poultry litter as
fertilizer will remain, poultry litter would likely need to be purchased and trucked to the plant from
other counties in Maryland as well as Delaware.
5.7.3 Capital and Operating Costs
Capital cost data for poultry litter fired biomass plants is not widely available. The aforementioned 55
MW plant in Benson Minnesota reportedly cost $300 million to install, equating to an installed cost of
approximately $5454/kW in 2007 dollars.46 The aforementioned 36.5 MW plant in the Netherlands
reportedly cost $207 million to install, equating to an installed cost of approximately $5595/kW in 2011
dollars.47 Based on the cost of the Netherland plant, and assuming some loss of economies of scale when
42 Environmentally Sound Uses for Poultry Litter, Doug Parker, Erik Lichtenberg and Lori Lynch, University of
Maryland.
43 http://www.fppcinc.org/pdf/2011-march-summit-fibroshore.pdf.
44 Poultry litter fuels new Dutch power plant, Biomass Power and Thermal magazine,
http://biomassmagazine.com/articles/2132/poultry-litter-fuels-new-dutch-power-plant.
45 Poultry Litter to Energy: Technical and Economic Feasibility, B. R. Bock, Ph.D., Principal Scientist, TVA Public
Power Institute.
46 http://www.fppcinc.org/pdf/2011-march-summit-fibroshore.pdf.
47 “Poultry litter fuels new Dutch power plant”, Biomass Power and Thermal Magazine, September, 2011.

Page 30
considering a 25 MW plant, we estimate the installed cost for a 25 MW poultry litter fired biomass plant
in Maryland is $5,700/kW in 2011 dollars.
The table below summarizes the installed cost of the potential biomass plant. The installed cost is higher
than the value described above due to cost escalation from 2011 to 2016.
Table 20 – Estimated Installed Cost for the Biomass Plant
O&M cost data is also not widely available for poultry litter fired biomass plants. We expect that O&M
costs for a poultry litter fired plant will be high relative to other biomass plants due to the special fuel
handling, odor control, emission control and other systems required. O&M costs for biomass plants of
similar size to the potential poultry litter fired plant have been estimated at $9/MWh in 2003 dollars.48
This equates to approximately $11/MWh in 2011 dollars based on CPI escalation data. Given the added
complexity for poultry litter fuel, we estimate the O&M cost for a 25 MW poultry litter fired biomass
plant is approximately $12/MWh in 2011 dollars.
The fuel cost for a poultry fired biomass plant on the Delmarva Peninsula is difficult to estimate. No
such plant currently exists from which data can be acquired. Poultry litter price is also a product of
many factors, including competing uses, trucking distance, environmental restrictions, etc. Prices for
poultry litter have been surveyed in past research.49 Results of that research revealed that the average
price received by poultry growers who transferred litter off-farm in the Somerset and Wicomico counties
was $3.67/ton, and was $4.75/ton in Caroline and Queen Anne’s counties. Similar research at the time
indicated a hauling cost for poultry litter of about $10/ton.50 Based on these estimated costs, and
allowing for relatively low inflation since 2006, we estimate that the average cost of poultry litter
delivered to the potential plant would be $16/ton in 2011.
48 EPA Combined Heat and Power Partnership, Biomass CHP Catalog, Chapter 7, Representative Biomass CHP
System Cost and Performance Profiles.
49 Poultry Litter Use and Transport in Caroline, Queen Anne’s, Somerset and Wicomico Counties in Maryland, Doug
Parker, Associate Professor, Qing Li, Graduate Research Assistant, Agricultural and Resource Economics, University
of Maryland, January 2006.
50 Environmentally Sound Uses for Poultry Litter, Doug Parker, Erik Lichtenberg and Lori Lynch, University of
Maryland.
Plant Site Biomass
Location East
Terrain n/a
Available Capacity (MW) 25
Available Energy (MWh) 186,150
Installed Year 2016
Plant Installed Cost ($/kw) $6,293
Plant Installed Cost ($ million) $157
Direct Transmission ($ million) $4
Network Transmission ($ million) $0
Total Installed Cost ($ million) $161

Page 31
5.7.4 Economic Viability
The economic viability of the biomass plant was assessed using the same methodology for the LBW
plants with the installed cost, operating cost and fuel cost assumptions identified above. Results of the
economic analysis for the biomass plant are provided in the table below.
Table 21 – Estimated Economic Viability for the Biomass Plant
Results show that the potential biomass plant would not achieve a positive NPV. This is likely driven by
its very high capital cost, more than three times as costly as the Selected LBW plants on a $ per kilowatt
basis (see table 9).
As with the Selected LBW Plants, we calculated the REC price level that would be necessary in order for
the biomass plant to achieve economic viability. Results of this calculation are shown in the table below.
Table 22 – REC Prices Necessary to Achieve Economic Viability for the Biomass Plant (Nominal Year
$/MWh)
Plant Site Biomass
Location East
Terrain n/a
Available Capacity (MW) 25
Available Energy (MWh) 186,150
Total Installed Cost ($ million) $161
After Tax WACC 10%
2016 After-tax NPV @ WACC ($ million) ($86)
Biomass ACP
2010
2011 $40.00
2012 $40.00
2013 $40.00
2014 $40.00
2015 $40.00
2016 $117.98 $40.00
2017 $117.98 $40.00
2018 $117.98 $40.00
2019 $117.98 $40.00
2020 $117.98 $40.00
2021 $117.98 $40.00
2022 $117.98 $40.00
2023 $117.98 $40.00
2024 $117.98 $40.00
2025 $117.98 $40.00
2026 $117.98 $40.00
2027 $117.98 $40.00
2028 $117.98 $40.00
2029 $117.98 $40.00
2030 $117.98 $40.00

Page 32
As with the Selected LBW Plants, results show that REC prices would need to be significantly higher
than those shown in the forecast from the State of Maryland if the biomass plant is to achieve economic
viability. As with the Selected LBW Plants, these REC prices are higher than the ACP rate. This indicates
that it would be more economic for an entity subject to the Maryland RPS (such as the Applicants) to pay
the ACP rate than to purchase RECs from the biomass plant.
5.7.5 Local Opposition
Opposition to the development of poultry litter biomass projects will likely revolve around air pollution
and toxic hazards associated with arsenic compounds that are added to animal feed. The Benson,
Minnesota plant burns 500,000 tons of turkey litter a year, plus 100,000-200,000 tons per year of crops
and/or agricultural wastes. Air emissions from this plant have been the subject of much controversy.
Opponents, including the Energy Justice Network, claim that the permit granted for the project allows
the plant to be Minnesota's largest single source of arsenic pollution, the largest source of sulfuric acid
air emissions, the second largest source of hydrochloric acid air emissions, and a significant new source
of dioxin pollution.51 Energy Justice Network and similar groups have opposed similar plants in other
states and would be likely opponents to development of a poultry litter fired plant on the Delmarva
Peninsula.
51 http://www.energyjustice.net/fibrowatch.

Page 33
6. Summary of Estimated Capital Costs and Economic Viability
A summary of the estimated installed cost and economic viability of the Proposed Wind Only
Requirement is shown in the following table.
Table 23 – Estimated Installed Cost and Economic Viability of the Proposed Wind Only Requirement
Results show that the installed cost of the Proposed Wind Only Requirement would be over $1.0 billion.
Results also show that the total NPV is approximately negative $260 million. A negative NPV indicates
that an owner, if it were to build this portfolio of plants, would suffer an economic loss since returns
from the portfolio would not be sufficient to cover the cost of debt and equity issued to build the
portfolio.
A summary of the estimated installed cost and economic viability of the Proposed Wind/Biomass
Requirement is shown in the following table.
Table 24 – Estimated Installed Cost and Economic Viability for the Proposed Wind/Biomass
Requirement
Results show that the installed cost of the Proposed Wind/Biomass Requirement would be
approximately $1 billion. Results also show that the total NPV is approximately negative $289 million.
Although the Proposed Wind/Biomass Requirement has a lower installed cost estimate, it has less
economic viability due primarily to the poor viability of the poultry litter fired biomass plant.
Finally, a summary of the estimated installed cost and economic viability of the Proposed Wind Only
Requirement under the Current REC Price Scenario is shown in the following table.
Plant Site 4401 5405 6211 6812 Total
Plant Site 4401 5405 6812 Biomass Total
Location West West East East
Terrain Mountainous Mountainous Flat n/a

Page 34
Table 25 – Estimated Installed Cost and Economic Viability for the Proposed Wind Requirement
under the Current REC Price Scenario
Results show that economic viability deteriorates significantly in the case where REC prices are lower
than those shown in the forecast from the State of Maryland (see table 23 above).
REC prices are a key revenue source for the potential wind and biomass plants. The current lack of long
term purchase commitments for RECs makes undertaking either of these $1 billion portfolios very risky
for an investor. Overall economic viability, as measured through (NPV), will swing significantly
depending on the level of REC prices in the short term market.
Plant Site 4401 5405 6211 6812 Total

Page 35
7. Offshore Wind
We studied the viability and cost of off-shore wind plants as a point of comparison to LBW or biomass.
An offshore wind plant typically operates at a higher capacity factor than an equivalent LBW plant due
to higher wind regimes and less surface interference. However, offshore wind development is an
emerging industry, with environmental risk factors and use-compatibility issues. Installed costs are
significantly higher and subject to more uncertainty than LBW.
7.1 Permitting Challenges
In addition to nautical hazards, an offshore wind plant can cause avian mortality or behavioral
disturbance, marine mammal impacts, sensitive fish habitat disturbance, impacts on endangered species,
and others. There is also potential interference with military radar in some locations. Visual impacts can
motivate opposition (as in the case of the Cape Wind Project) and can potentially cause tourism revenue
losses if people choose to avoid areas where offshore wind turbines are visible.
In July 2011, the Department of the Interior (DOI) released its draft environmental assessment (EA) for
proposed mid-Atlantic offshore wind energy development sites. In regards to Maryland, the EA
preferred alternatives would reduce the area where wind turbines might be placed from an original 206
square nautical miles to 94 square nautical miles. Turbines could be placed from ten nautical miles off
the beach to 27 nautical miles out to sea. Other alternatives under consideration would reduce the
developable area even further due to shipping safety issues.
At the state level, HB1054/SB861 would require the PSC, by regulation or order, to require specified
electric companies to enter into specified long-term power purchase agreements with specified offshore
wind generators; make the PSC responsible for approving specified contracts; and authorize a non-
bypassable charge or other mechanism for recovery of specified costs. Neither bill has moved in the
House or Senate.
7.2 Costs
Although there are currently no offshore wind plants in North America, we can estimate their capital
and operating costs based on the experience of the offshore wind industry in Europe. Offshore wind
plants larger than 100 MW built in the U.K. through 2010 had a median capital cost of £2,700/kW
($4,200/kW). This is expected to drop to £2,075/kW ($3,200/kW) by 2020.52 We estimate that the capital
cost for a 150 MW wind farm off the coast of Maryland will be approximately $4,000/kW (in 2011$) in
2016. This is the earliest year reasonably possible for completion of such a plant. This cost will fall to the
range of $3,100-$3,600/kW by 2022 (in 2011$). These installed cost estimates are significantly higher than
installed cost estimates for LBW plants.
Offshore wind operating costs are highly variable, driven primarily by the size of the wind farm and the
distance from shore. Plants close to shore have experienced O&M costs as low as 16 euros/MWh
($22/MWh).53 Plants farther from shore (>12 nautical miles) require crews to live in hotels on
52 Department of Energy and Climate Change, Review of the Generation Costs and Deployment Potential of
Renewable Electricity Technologies in the UK, June 2011, p.43.
53 Krohn, Soren, Poul-Erik Morthorst and Shimon Awerbuch, European Wind Energy Association, The Economics of
Wind Energy, March 2009, p. 66.

Page 36
accommodation platforms. Crews rotate every two weeks, resulting in double costs for technician labor.
Operating costs for plants in the U.K. ranged from £100-196/MW-year ($155-304/kW-year or $31-
60/MWh) in 2010 and are expected to decrease to £89-175/MW-year ($138-271/kW-year or $27-54/MWh)
in 2020.54 We estimate that operating costs for a 150 MW wind farm off the coast of Maryland will be in
the range of $29-57/MWh in 2016 and $26-53/MWh in 2022 (in 2011$). As with installed costs, these
O&M cost estimates are significantly higher than O&M cost estimates for LBW plants.
7.3 Transmission
The viability of offshore wind in Maryland is further challenged by transmission constraints. Options
are very limited on the point of interconnection to the grid (POI) as well as the point of delivery to a
major transmission line (POD). As discussed in the onshore wind and biomass sections of this report, the
entire Delmarva Peninsula is characterized by a weak transmission system and is prone to bottlenecks.
The Atlantic shoreline of Maryland is approximately 30 miles long, with at least 2/3 of the total
consisting of the Assateague Island National Seashore, a protected area. Feasible POIs are limited to
only four substations, with the most economical located in southern Delaware55. Each of these POIs
would require between 5 and 25 miles of new transmission line to connect to the closest POD, the Indian
River generation facility in Sussex County, Delaware. Transmission from this POD is expected to be
constrained until the completion of the Mid- Atlantic Power Pathway (MAPP), a 150 mile 500 kV
transmission project. MAPP is scheduled for completion in 2015 but it is facing significant resistance
from environmental groups. Without MAPP, excess power from the Delmarva Peninsula will flow
primarily northward to New Jersey via 230 kV transmission lines, which are often constrained. In
summary, it is reasonable to expect significant costs, potential delays and much uncertainty in the
development of transmission capacity that would be required for Maryland offshore wind projects.
7.4 Summary
Offshore wind is an emerging industry. It currently faces permitting challenges due to nautical hazards,
avian mortality or behavioral disturbance, marine mammal impacts, sensitive fish habitat disturbance,
impacts on endangered species, and others.
Installed costs and O&M costs of offshore wind currently are, and are expected to remain, significantly
higher than those for land-based wind. The table below summarizes the expected costs based on a
common 2016 operation date.
54 Department of Energy and Climate Change, p.49.
55 http://cier.umd.edu/documents/Maryland-Offshore-Wind-Report.pdf

Page 37
Table 26 – Estimated Installed Cost and O&M Costs for LBW versus Offshore Wind
With respect to transmission, significant new on-shore expansions would be required to ensure from the
plants would reach load throughout PJM. It is reasonable to expect significant costs and potential delays
in the development of these expansions.
Due to these factors, offshore wind in Maryland is not a viable component of the proposed renewable
energy requirements at this time.
END OF REPORT
Land Based Wind,
Mountainous
Location, No PTC
Extension, 2016
Operation Date
Offshore
Wind
Installed Cost (2011 $/kw) $2,210 $4,000
O&M Cost (2011 $/MWh) $15.79 $29 - $57

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