
Joint letter from the CEO and Chairman of the Board
Dear SMECO Members,
As a cooperative, our commitment to Environmental, Social, and Governance (ESG) principles is rooted in a legacy that began in 1937. By prioritizing environmental stewardship, fostering social responsibility, and ensuring robust governance, we’re working together to ensure that our cooperative thrives and supports the well-being of our members, our communities, and our planet for generations to come.
SMECO is proud to deliver its third annual ESG report. This edition reflects our continued progress in providing members and community stakeholders with transparency into our efforts to serve as good corporate citizens. We will continue to improve the data we share and work to present the information in a way that is clear and useful to all readers.
We will also refine our metrics to keep pace with best practices of ESG reporting as it matures as a discipline.
We understand the critical importance of electricity in the daily lives of our members and we remain committed to our mission of providing reliable, affordable, and sustainable energy solutions, while also actively contributing to the social, economic, and cultural fabric of the region.
Every penny counts, especially in today’s economic landscape. That is why we remain dedicated to managing costs without compromising on reliability and service. We are constantly working to ensure efficiency, streamline our operations, and make smart investments that save our members money in the long run. Your cooperative team also invested time and resources into seeking funding opportunities to reduce the burden of infrastructure costs.
Listed below are a few notable developments since our last report.
- We are bringing our greenhouse gas (GHG) emission reporting up to date. GHG reporting in our previous ESG editions lagged one year behind. We took steps this year to accelerate completion of our calculations so we could pass along the findings to you in the current reporting year. The 2022 report, for example, reported GHG emissions for 2021. In this edition, we will report on both 2022 and 2023. Additionally, we have now collected enough consecutive years’ data to plot trends to show how our emissions are changing over time.
- SMECO’s residential rates were among the lowest in Maryland.
- In 2023, SMECO was selected to receive a grant from the U.S. Department of Energy for a total of approximately $33.6 million to offset the cost of new transmission, distribution, and telecommunications investments in our local grid.
- SMECO was awarded the utility privatization contract for Naval Support Facility (NSF) Indian Head to include main base Indian Head and the Stump Neck Annex. SMECO will own, operate, and maintain NSF Indian Head’s electric system for 50 years beginning November 2024.
- Your cooperative received a clean financial audit from our external auditors in 2023, highlighting our commitment to remain good stewards of our members’ dollars. This has been the case for decades and will continue as a result of our rigorous processes and integrity.
Our industry is changing rapidly as are the ESG considerations for an electric utility like SMECO. We are keeping pace with these changes by implementing our Strategic Plan, and maturing our ESG reporting. Our goal is to report our progress across these dimensions with transparency and integrity, and we hope that you will use this report as one more way to hold us accountable moving forward.
Respectfully,
Sonja Cox
President and CEO
W. Rayner Blair
Chairman of the Board
Scott White finished his term as Chairman of the Board and officially passed the gavel to W. Rayner Blair, III in September 2023.
Scott White finished his term as Chairman of the Board and officially passed the gavel to W. Rayner Blair, III in September 2023.
Vision
Sustainably energize Southern Maryland
Mission
Put members first by delivering safe, reliable, affordable, and sustainable electricity and related services that exceed expectations
Purpose
To lead sustainably in providing reliable, safe, competitively priced electricity and related services that enhance the quality of life in Southern Maryland
Culture
SMECO champions a culture where people are valued and the employee experience is driven by innovation, collaboration, inclusion, safety and trust
Incorporated in 1937, Southern Maryland Electric Cooperative (SMECO) is now one of the 15 largest electric distribution cooperatives in the United States. We provide electric service to more than 175,000 metered services in Charles County, St. Mary’s County, southern Prince George’s County, and most of Calvert County.
Cooperatives offer an alternative to the standard business model. Unlike a corporation, which is owned by investors, a cooperative is jointly owned and democratically controlled by the people who use its services. They come together voluntarily to meet common economic, social, and cultural needs. It is a not-for-profit entity.
As an electric distribution cooperative, every customer with an account is a member—an owner—of SMECO. Members vote to elect the 15 Board of Directors who represent the membership through their guidance and oversight of the cooperative. Each county in the cooperative’s service area has representation on the Board. Directors are elected to serve three-year terms where they each represent all of the counties SMECO serves.
SMECO’s Board works with the cooperative’s management team, which is comprised of seasoned industry professionals who have extensive experience in utility management.
The mission of our Board, our management team, and every employee at the cooperative is to put members first by delivering safe, reliable, affordable, and sustainable electricity and related services that exceed expectations. This mission has roots from our founding, when determined members of the community worked together to electrify Southern Maryland.
SMECO was built by this community for this community, and we are committed to serving as good stewards for the future of our region. We do this by supporting the sustainable growth and livelihood of Southern Maryland through economic, social, and environmental investments.
Our governance model
Type of |
|
|
|
Governing |
Board of Directors |
City Council |
Board of Directors |
Service |
Small to mid-size |
Small to large cities |
Large, urban, |
Structure |
Private, nonprofit |
Public, nonprofit |
Private, for-profit |
Business |
Provides electricity |
Provides electricity |
Provides electricity |
Owned by |
Members |
Local government |
Shareholders |
Regulated |
Board of Directors |
City Council |
Public Service |
Incorporated in 1937, Southern Maryland Electric Cooperative (SMECO) is now one of the 15 largest electric distribution cooperatives in the United States. We provide electric service to more than 175,000 metered services in Charles County, St. Mary’s County, southern Prince George’s County, and most of Calvert County.
Cooperatives offer an alternative to the standard business model. Unlike a corporation, which is owned by investors, a cooperative is jointly owned and democratically controlled by the people who use its services. They come together voluntarily to meet common economic, social, and cultural needs. It is a not-for-profit entity.
As an electric distribution cooperative, every customer with an account is a member—an owner—of SMECO. Members vote to elect the 15 Board of Directors who represent the membership through their guidance and oversight of the cooperative. Each county in the cooperative’s service area has representation on the Board. Directors are elected to serve three-year terms where they each represent all of the counties SMECO serves.
SMECO’s Board works with the cooperative’s management team, which is comprised of seasoned industry professionals who have extensive experience in utility management.
The mission of our Board, our management team, and every employee at the cooperative is to put members first by delivering safe, reliable, affordable, and sustainable electricity and related services that exceed expectations. This mission has roots from our founding, when determined members of the community worked together to electrify Southern Maryland.
SMECO was built by this community for this community, and we are committed to serving as good stewards for the future of our region. We do this by supporting the sustainable growth and livelihood of Southern Maryland through economic, social, and environmental investments.
Our governance model
Incorporated in 1937, Southern Maryland Electric Cooperative (SMECO) is now one of the 15 largest electric distribution cooperatives in the United States. We provide electric service to more than 175,000 metered services in Charles County, St. Mary’s County, southern Prince George’s County, and most of Calvert County.
Cooperatives offer an alternative to the standard business model. Unlike a corporation, which is owned by investors, a cooperative is jointly owned and democratically controlled by the people who use its services. They come together voluntarily to meet common economic, social, and cultural needs. It is a not-for-profit entity.
As an electric distribution cooperative, every customer with an account is a member—an owner—of SMECO. Members vote to elect the 15 Board of Directors who represent the membership through their guidance and oversight of the cooperative. Each county in the cooperative’s service area has representation on the Board. Directors are elected to serve three-year terms where they each represent all of the counties SMECO serves.
SMECO’s Board works with the cooperative’s management team, which is comprised of seasoned industry professionals who have extensive experience in utility management.
The mission of our Board, our management team, and every employee at the cooperative is to put members first by delivering safe, reliable, affordable, and sustainable electricity and related services that exceed expectations. This mission has roots from our founding, when determined members of the community worked together to electrify Southern Maryland.
SMECO was built by this community for this community, and we are committed to serving as good stewards for the future of our region. We do this by supporting the sustainable growth and livelihood of Southern Maryland through economic, social, and environmental investments.
Our governance model
Type of Electric Utility |
Governing Body Board of Directors |
Service Area Small to mid-size rural communities |
Structure Private, nonprofit |
Business Model Provides electricity at competitive rates. |
Owned by Members |
Regulated by Board of Directors |
Type of Electric Utility |
Governing Body City Council |
Service Area Small to large cities |
Structure Public, nonprofit |
Business Model Provides electricity at competitive rates. |
Owned by Local government |
Regulated by City Council |
Type of Electric Utility |
Governing Body Board of Directors |
Service Area Large, urban, industrial and rural, |
Structure Private, for-profit |
Business Model Provides electricity at competitive rates. |
Owned by Shareholders |
Regulated by Public Service Commission |
This Report
Environmental, Social, Governance (ESG) reporting is the disclosure of information about an organization’s operations in relation to these three areas of business. It presents an update on SMECO as a “corporate citizen” to our region.
While not a requirement, our leadership wants to ensure we regularly inform our members and offer transparency into our ESG efforts. SMECO lives its values, which reflect the values of the members we serve.
As an electric cooperative, ESG is, and always has been, at the heart of our operations. The cooperative principles and SMECO’s core values of integrity, accountability, innovation, and commitment to community motivates the cooperative and its employees to act in the best interest of our community. This is clear in our democratic governance model and community-centric culture.
ESG is no longer a lofty goal for companies but a business imperative. Our ESG initiatives and strategy were developed by staying true to our foundation of integrity, ethics, and collaboration.
Our environmental priorities emphasize energy efficiency, stewardship of the local habitats, protection of birds and wildlife, and renewable energy.
Our social priorities for the Southern Maryland community have continued to involve our members and employees in philanthropic donations of money and time, workforce development, and positioning the cooperative as an employer of choice.
Our governance priorities include our democratic representation, open elections, regulatory compliance, ethical accounting, and even the publication of this ESG report as accountability for the impact of the work we do.
Our ESG reporting reflects the outcome of our initiatives. In this report, we share highlights of our efforts and outcomes, and we compare the progress of our initiatives with industry benchmarks and targets.
Crews install an osprey platform to protect birds and our equipment.
Crews install an osprey platform to protect birds and our equipment.
About the cooperative

SMECO was born from a need for electricity in rural Southern Maryland and became reality thanks to the teamwork and dedication of a handful of motivated community members. In the 1930s, no electricity provider wanted to serve rural Southern Maryland. The corporate electric utilities thought it was too expensive and not worth the risk to invest in rural America. In response, hardworking and determined community members banded together to form an electric cooperative and brought the power to their community. This attitude endures today. Since its inception, SMECO has been community-led, and collaboration for the greater good has remained integral to our work since those first days in 1937.
For over 85 years, SMECO has transformed the experience of living in Southern Maryland. We are a cooperative—and we are proud of it. Cooperatives, unlike other utilities, are owned by the members they serve. We are a nonprofit entity fully dedicated to our mission of providing members with safe, reliable, affordable, and sustainable electricity and related services. Our members come first. Seven Cooperative Principles are the foundation of our mission-driven business model, and for over eighty years, these principles have guided our decision making. These core principles also demonstrate our intrinsic commitment to ESG and how sustainability is built into the foundation of our business.
When our cooperative was founded, our members wanted access to electricity. Today, they tell us they also want SMECO to care for the environment and community while maintaining our commitment to affordable and reliable power. We are listening. We will continue to honor our roots as we innovate in this changing world, and we hope you will join us on this journey.
Leadership
SMECO’s Board of Directors is comprised exclusively of SMECO members who live and work in Southern Maryland. Each county we serve is represented on the Board and Directors whose members are elected based on votes cast by SMECO members as part of the Annual Members’ Meeting.
The individuals who serve on SMECO’s Board are invested in the wellbeing and future of Southern Maryland, and they know the cooperative plays a critical role in our local community. The group represents a variety of industries and backgrounds but they all bring with them the knowledge, talent, and experience that helps shape and guide the direction of the cooperative.
Our members are best served by a Board that is properly educated, trained, and informed about current issues and standards for electric providers and cooperatives. Directors may not come into their Board position with a vast understanding of SMECO or the electric industry, but from day one, they invest time and energy into deepening their knowledge of the electric industry, cooperatives, and SMECO. Their tenure on the Board begins with new director orientation, a two-day immersive introductive into the responsibilities of the different departments within SMECO. Directors also attend training sessions provided by the National Rural Electric Cooperative Association (NRECA), which serves about 900 electric cooperatives nationwide. Through NRECA, electric cooperatives across the country have built a strong network of like-minded organizations that put their members first.
The NRECA provides comprehensive training programs for cooperative Board of Directors with training sessions that cover a range of topics essential for effective board service, including fiduciary responsibilities, strategic planning, financial oversight, regulatory compliance, and industry trends. The programs equip directors with the knowledge and tools needed to make informed decisions, ensure the cooperative’s financial health, and navigate the evolving energy landscape. Through a mix of in-person workshops, online courses, and peer learning opportunities, NRECA aims to strengthen the leadership capabilities of cooperative boards, fostering a collaborative and effective governance structure. Many of SMECO’s seasoned directors have received their Director certification from NRECA’s training programs.
The progressive certification process has three distinct parts.
- Credentialed Cooperative Director (CCD) is a foundational program covering essential governance knowledge and skills. The five courses include information on director duties and liabilities, understanding the electric business, board roles and relationships, strategic planning, and financial decision-making.
- The Board Leadership Certificate (BLC) training is available to Directors who have completed their CCD. This training focuses on advanced governance issues and covers risk management, technology, policy development, community engagement, and more.
- The Director Gold Credential recognizes Directors committed to continuing their education and expanding their knowledge and skills. This credential is maintained through continued education.
In addition to training programs, the NRECA offers a range of support services to help Board members govern effectively and stay informed about industry developments, including access to publications and resources, advocacy and legislative support, peer networking opportunities, consulting services, research and data analysis, crisis management and risk mitigation support, technology and innovation support, legal and regulatory guidance, and member engagement and communication tools. These support services, combined with the comprehensive training programs, ensure that cooperative Board members have the knowledge, tools, and resources they need to lead their organizations effectively and navigate the evolving energy landscape.
SMECO’s Board of Directors meets every month to provide input and guidance to the executive team, hear updates about the operations of the cooperative and ensure accountability in all aspects of cooperative business. Directors can also choose to serve on various Board committees focused on key needs within the cooperative. The Board works hand-in-hand with SMECO’s president and CEO and executive team to ensure the cooperative maintains its standard of excellence at all levels. The Board reviews and confirms annual work programs, financial plans, contracts, internal SMECO employee policies, external communication policies, rates, and tariff changes.
The executive team is comprised of the president and CEO, as well as five senior vice presidents who each oversee an integral facet of the cooperative. The executive team brings with them decades of experience in their chosen fields, including multiple decades at the cooperative.
Members of the executive team use their combined experience to shape the goals and objectives of the teams they lead. In 2023, the cooperative’s leadership kicked off the 2023–2027 Strategic Plan, updating the initiatives that shape the daily work performed at SMECO. Working together with the SMECO Board, the executive team set the strategic vision of the cooperative, ensuring the goals and objectives aligned with SMECO’s ultimate mission of putting the members first by delivering, safe, reliable, affordable, and sustainable electricity and related services that exceed expectations.
The Board and executive team are accountable to the cooperative’s members, who shape how SMECO is governed by participating in the Annual Meeting election process. SMECO’s members elect the community members who serve on the Board and also vote on proposed bylaw changes. Bylaws govern the way an electric cooperative does business, including the process of electing new Directors.
Cooperative member signing in for the 2023 Annual Meeting.
Cooperative member signing in for the 2023 Annual Meeting.
SMECO's Annual Meeting and Voting Process
Members of SMECO’s Board of Directors are elected for staggered terms with one-third of the Board elected each year to serve three-year terms. The election process is fundamental to the cooperative business model and provides the opportunity for every SMECO member to have a voice in the governance process.
The election process begins in the spring, when the Board appoints the nominating committee, a group of five to eleven cooperative members that represent different counties in the service area. The nominating committee reviews candidate applications to ensure the applicants meet all of the eligibility requirements and are capable of serving in the position. All eligible members interested in running for an open position are able to submit their application to run by nomination or they can choose to run by petition. Members running by petition must still meet eligibility requirements and will need to provide a petition signed by 15 other cooperative members who support their decision to run for a seat.
All cooperative members receive mailed ballots at the opening of the election cycle, and email ballots are also sent to any member with an email on file. Votes are placed online or by mail, and the results are announced at the Annual Meeting held in late summer. Terms take effect soon after the Annual Meeting with the swearing in occurring during the next full meeting of the Board of Directors.
Your cooperative lives and works by the core values of integrity, accountability, innovation, a commitment to community, and safety. As an electric provider created by members for members, a culture of self-governance is present across our business—from employees to executives to the Board. Good governance has been ingrained in SMECO’s business since day one, and it continues to be the guiding force behind the innovation and improvements aimed at serving our members.
Learn More
The cooperative values its relationships with vendors and suppliers.
The cooperative values its relationships with vendors and suppliers.
As stewards of a community-owned electric utility, SMECO has the unique responsibility to provide reliable and affordable electricity, while also ensuring long-term solvency and growth for the cooperative and this community. By embracing sound financial practices and strategically investing in our infrastructure and resources, we safeguard the cooperative’s long-term stability and resilience.
We also ensure our community flourishes by supporting the sustainable growth and livelihood of Southern Maryland. We understand that supporting local businesses is essential for economic growth and vitality. That is why, whenever possible, we prioritize relationships with local vendors and suppliers for goods and services needed for our operations. We believe that by reinvesting in local businesses, we help strengthen the local economy and contribute to its overall wellbeing. SMECO is also one of the largest employers in the local area, providing careers for close to 500 people who live in this region.
- ACES Power Marketing
- Association of Energy Services Professionals
- Association of Large Distribution Cooperatives
- Calvert County Chamber of Commerce
- Calvert Minority Business Alliance
- Capital Region Minority Supplier Development Council
- Charles County Chamber of Commerce
- Charles County Farm Bureau
- CoBank
- Cooperative Response Center
- Electric Research & Manufacturing Cooperative
- Maryland Chamber of Commerce
- MD-DC Utilities Association
- Maryland LGTBQ Chamber of Commerce
- Maryland Washington Minority Companies Association
- National Cooperative Services Corporation
- National Renewables Cooperative Organization
- National Rural Telecommunications Cooperative
- National Rural Electric Cooperative Association
- National Rural Utilities Cooperative Finance Corporation
- National Safety Council
- National Veteran Owned Business Association
- Prince George’s County Chamber of Commerce
- PJM Interconnection
- St. Mary’s County Chamber of Commerce
Smart Electric Power Alliance (SEPA) - Southern Maryland Minority Chamber of Commerce
Supporting local and diverse suppliers
Ensuring reliable service requires consistent maintenance of and regular upgrades to the electric grid. These costs are covered by the facilities charge and the distribution charge on the electric bill, which pays for cables, poles, substations, vehicles, office buildings, and employees, and more. When purchasing the necessary equipment and services to ensure continued reliability, the cooperative looks for affordability and quality first. SMECO also considers how those dollars will affect the community. Where possible, the cooperative reinvests the money from its distribution services charge back into the local economy by supporting local businesses. We also put effort and intention behind ensuring our suppliers represent our broad population.
In 2009, SMECO signed a Memorandum of Understanding with the Maryland PSC pledging our commitment to the goal of spending at least 25 percent of our procurement dollars with diverse suppliers. This MOU was revised and renewed in 2023. This goal can be met through direct engagement with diverse suppliers, where SMECO initiates purchase orders and directly pays the diverse supplier. The 25 percent goal also includes indirect spending, when the non-diverse businesses working with SMECO solicit work from diverse businesses on behalf of the cooperative.
The cooperative’s purchasing team actively seeks out diverse suppliers by attending conferences and events. All businesses interested in working with SMECO—whether diverse or not—sign up through the cooperative’s vendor portal. Diverse vendors are invited to meet appropriate internal team members to share information about their products and services. By facilitating introductions between suppliers and SMECO’s internal departments, we streamline the supplier selection process. This proactive approach ensures that diverse suppliers are in consideration early in project planning, enhancing efficiency and supporting our diversity goals.
Reaching the full metric has proven challenging despite strong efforts from the team, because SMECO’s largest material expenditures are for cable and transformers, and fully diverse manufacturers of these required items do not exist yet. This is where the second spending tier has proven beneficial and helps promote other businesses’ use of diverse suppliers.
SMECO wants diverse suppliers to be successful. Additionally, we strive to make the best decision for our members by selecting a quality vendor at the best price. SMECO supports diverse suppliers without paying a price premium. We instead support them with opportunities, mentoring, and valuable feedback in an effort to help all businesses to grow in their success.
The energy industry experienced greater inflation than the economy at large in recent years. Aging infrastructure, increased lead times, and an astronomical rise in the prices of necessary equipment, as well as an ever-growing demand for electric power, means that every penny counts, especially in today’s economic landscape. That is why we remain dedicated to managing costs without compromising on reliability and service. We are constantly working to ensure efficiency, streamline our operations, and make smart investments that save our members money in the end. Your cooperative team also invests time and resources into seeking funding opportunities to reduce the burden of infrastructure costs.
Substation site preparation - In 2023, site preparation began for a future substation that will be built near Trinity Church Road and Route 6. Site construction required fill dirt as part of the grading process, so SMECO contracted with small local business J. Calvin Wood Jr., Inc. to move unused dirt from the grading and construction of the cooperative’s Engineering and Operations Center to the new substation site. This one small project reflects the overall commitment to reinvest in local businesses.
Substation site preparation - In 2023, site preparation began for a future substation that will be built near Trinity Church Road and Route 6. Site construction required fill dirt as part of the grading process, so SMECO contracted with small local business J. Calvin Wood Jr., Inc. to move unused dirt from the grading and construction of the cooperative’s Engineering and Operations Center to the new substation site. This one small project reflects the overall commitment to reinvest in local businesses.
Crew member working on Milestown Substation.
Crew member working on Milestown Substation.
Supporting local and diverse suppliers
Ensuring reliable service requires consistent maintenance of and regular upgrades to the electric grid. These costs are covered by the facilities charge and the distribution charge on the electric bill, which pays for cables, poles, substations, vehicles, office buildings, and employees, and more. When purchasing the necessary equipment and services to ensure continued reliability, the cooperative looks for affordability and quality first. SMECO also considers how those dollars will affect the community. Where possible, the cooperative reinvests the money from its distribution services charge back into the local economy by supporting local businesses. We also put effort and intention behind ensuring our suppliers represent our broad population.
In 2009, SMECO signed a Memorandum of Understanding with the Maryland PSC pledging our commitment to the goal of spending at least 25 percent of our procurement dollars with diverse suppliers. This MOU was revised and renewed in 2023. This goal can be met through direct engagement with diverse suppliers, where SMECO initiates purchase orders and directly pays the diverse supplier. The 25 percent goal also includes indirect spending, when the non-diverse businesses working with SMECO solicit work from diverse businesses on behalf of the cooperative.
The cooperative’s purchasing team actively seeks out diverse suppliers by attending conferences and events. All businesses interested in working with SMECO—whether diverse or not—sign up through the cooperative’s vendor portal. Diverse vendors are invited to meet appropriate internal team members to share information about their products and services. By facilitating introductions between suppliers and SMECO’s internal departments, we streamline the supplier selection process. This proactive approach ensures that diverse suppliers are in consideration early in project planning, enhancing efficiency and supporting our diversity goals.
Reaching the full metric has proven challenging despite strong efforts from the team, because SMECO’s largest material expenditures are for cable and transformers, and fully diverse manufacturers of these required items do not exist yet. This is where the second spending tier has proven beneficial and helps promote other businesses’ use of diverse suppliers.
SMECO wants diverse suppliers to be successful. Additionally, we strive to make the best decision for our members by selecting a quality vendor at the best price. SMECO supports diverse suppliers without paying a price premium. We instead support them with opportunities, mentoring, and valuable feedback in an effort to help all businesses to grow in their success.
The energy industry experienced greater inflation than the economy at large in recent years. Aging infrastructure, increased lead times, and an astronomical rise in the prices of necessary equipment, as well as an ever-growing demand for electric power, means that every penny counts, especially in today’s economic landscape. That is why we remain dedicated to managing costs without compromising on reliability and service. We are constantly working to ensure efficiency, streamline our operations, and make smart investments that save our members money in the end. Your cooperative team also invests time and resources into seeking funding opportunities to reduce the burden of infrastructure costs.
Substation site preparation - In 2023, site preparation began for a future substation that will be built near Trinity Church Road and Route 6. Site construction required fill dirt as part of the grading process, so SMECO contracted with small local business J. Calvin Wood Jr., Inc. to move unused dirt from the grading and construction of the cooperative’s Engineering and Operations Center to the new substation site. This one small project reflects the overall commitment to reinvest in local businesses.
Substation site preparation - In 2023, site preparation began for a future substation that will be built near Trinity Church Road and Route 6. Site construction required fill dirt as part of the grading process, so SMECO contracted with small local business J. Calvin Wood Jr., Inc. to move unused dirt from the grading and construction of the cooperative’s Engineering and Operations Center to the new substation site. This one small project reflects the overall commitment to reinvest in local businesses.
Crew member working on Milestown Substation.
Crew member working on Milestown Substation.
GRIP grant
One respite for SMECO’s rising costs outside of our control is a recent opportunity from the federal government. Congress passed the Bipartisan Infrastructure Law that President Biden signed into law on November 6, 2021. This deal invested billions of dollars into the nation’s energy, water, telecommunications, and transportation systems. Many also consider it the most significant investment to combat climate change in American history. The legislation allocated funds to various departments, including the Department of Energy (DOE) that implemented the Grid Resilience Innovation Partnership (GRIP) program.
GRIP is a grant program for electric utilities and their partners to fund capital infrastructure, such as transmission and distribution lines, renewable energy systems, and battery energy storage systems, to improve grid reliability and resilience. GRIP is organized into three topic areas— grid resilience utility and industry grants, smart grid grants, and the grid innovation program. The program is competitive. Not only must project proposals demonstrate technical value, but they must also deliver community benefits in the form of environmental justice, job creation, and quality of life improvements for disadvantaged communities.
Given the opportunity and the potential benefit the grant funding could bring to Southern Maryland, SMECO submitted a “letter of interest” for the SMECO Transmission, Distribution, and Communications Resiliency Initiative, a $49-million portfolio of improvements to our local grid. The DOE’s Grid Deployment Office sent SMECO an encouragement letter, based upon the letter of interest, to submit a full application. SMECO followed through with the full application in April, and on October 17, 2023, the DOE notified SMECO that it was one of the 16 applicants selected for award of a Topic Area 1 grant.
SMECO was the only utility chosen in any GRIP topic area to win funds for Maryland. The funding will support vital investments while reducing the upward pressure on SMECO’s rates that usually accompanies large-scale capital spending. It helps to preserve affordability for everyone.
The project investments represent a comprehensive, holistic approach to grid planning, investment, and operation, and the selection for the competitive award demonstrates SMECO’s capabilities. Work includes:
- Replacement and hardening of the 69-kV Chalk Point-to-Hughesville line
- Strategic undergrounding and feeder tie lines at 30 targeted, high-value locations on the distribution system
- Installation of optical ground wire fiber optic telecommunications
SMECO exercises environmental safeguards while working to restore power during outages and in upgrading infrastructure to ensure continued reliability.
SMECO exercises environmental safeguards while working to restore power during outages and in upgrading infrastructure to ensure continued reliability.
SMECO’s 69-kV lines are one of the oldest sections remaining in SMECO’s system with some poles set as long ago as the 1960s. The H-frame structures crossing forests and wetlands in Charles and southern Prince George’s Counties have aged beyond their useful life, so new steel poles will go in their place. Fewer poles will be required to cross the same terrain due to their height and strength. They are also better able to withstand high winds making this line more resilient and reliable.
Much of the existing rights-of-way and easements are through a protected wetland. Siting originally occurred long before modern environmental regulations that would have prohibited such construction. This creates a constraint for SMECO today because communities rely on this line for power, and moving it to a new location would be immensely challenging for myriad reasons including stifling cost premiums. Instead, SMECO must work in the existing right-of-way with industry best practices for construction while minimizing the impact to the ecosystem. Distribution jobs are much smaller scale and spread across all SMECO counties.
Many of these projects bury overhead lines to protect them from high winds, vegetation, animals, car crashes, and other hazards. Underground distribution lines are vastly more reliable than the aerial equivalent. They are also more expensive to install, which means the federal funding provides even more benefit to our region and the bill-paying members.
The telecommunications component will add connectivity to additional substations into SMECO’s operational technology communications network. This allows operators to monitor and control equipment in the field.
The package of investments awarded for funding represents the most needed upgrades for our grid, and making these investments will give us greater reliability for our members.
SMECO’s local focus and cooperative business model set our application apart from the more than 400 competitors in the program. To demonstrate the community benefits that would also result from the federal funds, SMECO touted numerous priorities detailed in this report, such as high-quality local jobs, environmental stewardship, local governance, diversity, and alignment with the Justice40 initiative. Justice40 is the Biden Administration’s goal to flow 40 percent of the funds of all federal programs, not only the GRIP grants, to disadvantaged communities. SMECO’s funded work will benefit the 5,230 people living in qualified census tract 24017850901 in Charles County.
Indian Head Privatization

Years of hard work culminated in a signed agreement between SMECO and the Department of Defense to privatize the electric system at Naval Support Facility (NSF) Indian Head to include main base Indian Head and the Stump Neck Annex. Privatization means that SMECO will own, operate, and maintain NSF Indian Head’s electric infrastructure for
50 years beginning October 2024.
Privatization efforts will include improvements to the existing infrastructure, including installation of 775 meters, substation and distribution improvements, and extensive tree trimming and related vegetation management.
NSF Indian Head marks the fourth privatization opportunity for the cooperative. In 2009, SMECO signed an agreement to privatize the Patuxent River Naval Air Station in Lexington Park, the Webster Field Annex in St. Inigoes, and the Navy Recreation Center in Solomons. Local military facilities are a vital part of Southern Maryland’s local economy and some of the largest local employers, as well. Supporting the electric reliability of our local military facilities provides multiple benefits to the local community.
Financial responsibility, seeking funding opportunities, and investing in the success of local and diverse businesses not only secures the future of the cooperative, it also empowers the communities we serve to flourish in an ever-evolving landscape.
Receiving the final agreement was a lengthy process and we are honored to have been selected. Our local military facilities are a large part of our local economy and some of the largest local employers for Southern Maryland residents. They also serve as an asset to our national safety. Being awarded the contract to operate and maintain the main base in Indian Head and the Stump Neck Annex is another wonderful opportunity that will benefit both SMECO and the Navy.