BALTIMORE (Map, News) - Maryland ratepayers will save an estimated $225 million for electricity between June 2011 and May 2012 under a Federal Energy Regulatory Commission ruling handed down earlier this month, the state’s Public Service Commission said Tuesday.

The PSC said the average household will save about $50 during that period. The savings are the result of a complaint filed with federal regulators by the commission and others, which claimed that operators of the regional power grid did not follow procedures in raising one of the costs for ratepayers.

“The PSC is committed to acting aggressively to protect the interests of Maryland ratepayers to keep electricity prices as low as possible,” PSC Chairman Steven Larsen said in a statement. “Since rates are currently established in the wholesale markets, we are fully engaged in the wholesale market to ensure rates are established fairly.”

The PSC and others filed the complaint against PJM Interconnection LLC, the organization that operates the regional electricity grid in Maryland, the District of Columbia and 13 other states, and  administers the competitive wholesale electricity market.

Yearly auctions set the price that all customers must pay for electricity for a 12-month period and are conducted three years before those prices take effect. As part of the price, customers must pay generators to expand the system’s capacity to meet peak demand. The next auction is scheduled for May 5.

But the PSC argued that PJM did not follow its own rules in seeking an increase to that cost, known as the “cost of new entry,” for the auction next week and did not show that failure to approve the cost would cause a power shortfall.

FERC agreed and, in an April 4 ruling, rejected PJM’s proposal to adopt the higher charge and said PJM had failed to establish that its proposal was necessary to ensure reliable service.

The most recent auction for the June 2010 to May 2011 period resulted in a price for most of the PJM region of $174.29 per megawatt-day. The price for the previous delivery year, 2009-2010, was $237.33 in the Baltimore-Washington area, $191.24 in the mid-Atlantic region

and $102.04 in the western portion of the PJM market area, according to PJM.

Prices were reduced in the Baltimore-Washington and mid-Atlantic areas and increased in the western portion of the region due to capacity exports and load growth.

acahall@baltimoreexaminer.com