Costs and Risks Associated with Alternative Portfolio Strategies in Maryland
Synapse subcontracted to Resource Insight to prepare this analysis for the Maryland Office of the People's Counsel. The purpose of the study was to identify the cost and risk benefits to residential customers of alternative strategies for meeting their electricity requirements over a long-term planning period. Using data for a representative investor-owned utility in Maryland, the Synapse team modeled a baseline or reference strategy that reflects a continuation of their existing supply procurement approach, based solely on short-term contracts, as well as several alternative portfolio strategies, involving contracts of varying length as well as efficiency programs. Synapse evaluated the candidate portfolios and the baseline scenario using an Excel-based power-system model with a Monte Carlo simulation capability. This approach allowed the project team to evaluate the performance of each strategy under a large number of possible future scenarios, and to measure that performance both in terms of expected cost and cost variability across all future scenarios.