Maryland is contending with a future energy crunch, due to higher demands for electricity outpacing supply. The problem is compounded by a highly congested transmission capacity and aging infrastructure. If nothing is done, the state could face shortages resulting in rolling brownouts or blackouts by 2011, according to a Public Service Commission report released late last year.

"We cannot, cannot, stand idly by and wait for market forces or the electricity good fairy to come in and solve this problem for us," O'Malley said in his keynote address to the Maryland Association of Counties at its annual summer conference.

Rob Gould, a spokesman for Baltimore-based Constellation Energy Group Inc., said the company is pursuing new ways to generate power, and he pointed to efforts to build a third nuclear reactor at the Calvert Cliffs Nuclear Power Plant in Maryland as an example.

Gould said the key to any solution is to "balance affordability, reliability and sustainability — all of which are critical to making Maryland an attractive place for future energy investment."

Gould said the group plans to work with the administration on energy needs.

On Wednesday, the Public Service Commission issued an order to start examining how the commission could direct utilities to build additional power generation plants to cover shortfalls.

PSC Chairman Douglas Nazarian said the commission will aggressively look for ways to make sure there's enough power.

"We're going to take care of it and find it, and if we have to, we'll make utilities find it or build it," Nazarian said after the speech.

Energy concerns have been a top focus for O'Malley. It dates to his campaign for governor, when he responded to a sudden jolt in electric bills to customers of Constellation subsidiary, Baltimore Gas and Electric Co.

In the last legislative session, he pushed for what he has described as "the strands" of a state energy policy. Lawmakers approved measures aimed at conservation, investing in energy efficiency and higher renewable energy portfolio standards.

Saturday's speech laid out a strategy to build on that and continue chipping away at a daunting problem.

A cornerstone of the more recent strategies include developing locally owned power generation.

Local governments in other parts of the country already use what are known as peaking units, which can supply energy at times when electricity is especially costly — such as on hot summer days.

To get things started, O'Malley said he will propose legislation next session to make financial and technical resources available through the bonding authority of Maryland Environmental Services. It is aimed at bringing new plants online soon..

O'Malley said his administration already is working with Frederick County President Jan Gardner on a possible partnership involving the town of Thurmont. The governor said the administration also has a model in Easton of how smaller, municipal-owned generation can save money for consumers during times of peak energy costs.

But Sen. E.J. Pipkin, R-Cecil, was skeptical about getting Maryland Environmental Services involved in power generation.

"What makes EMS such a brilliant agency for building power plants? I mean, we have enough trouble on the Eastern Shore getting EMS to do their core business, which is to run sewage plants ... I think that's something worth some serious questioning."

Pipkin said he's expecting plenty of debate on taking new approaches to energy.

Other goals O'Malley outlined Saturday include:

—Pursuing large scale renewable energy projects, such as Delaware's offshore wind farm or proposals for an Eastern Shore power plant powered by poultry litter.

—Accelerating development of smart meters to help reduce energy consumption.

—Creating partnerships with federal facilities to create a fleet of peaking generators to ease stress on the power grid.