March 4, 2011
Maryland

O’Malley wind plan draws questions

By Annie Linskey, The Baltimore Sun, www.baltimoresun.com 3 March 2011

A plan by Gov. Martin O’Malley to require the state’s energy utilities to invest in wind power is the latest item in his legislative agenda to face skepticism from an ordinarily receptive General Assembly.

O’Malley fielded tough questions Thursday about a package of incentives for the wind energy industry from members of the House Economic Matters Committee, who said the plan would cause everyone’s energy costs to rise while funneling profits to a small group of developers.

The governor already had run into resistance in other areas. The Senate president – a fellow Democrat – testified this week in favor of an approach to teacher pensions that O’Malley has rejected. The governor confronted deeper-than-expected opposition to his measure to raise $100 million for a state-backed venture capital fund. And his gun control legislation has languished in committee.

O’Malley’s budget, meanwhile, is attracting criticism from both Republicans and some urban Democrats. Republicans want deeper cuts, while the Democrats in Baltimore and Prince George’s County want to restore education funding to their districts.

The skepticism from the heavily Democratic General Assembly, which ordinarily supports O’Malley, suggests the governor will have to do some heavy lifting in what remains of the legislative session if he wants to see progress on his agenda.

“It shows we are pushing the envelope,” O’Malley said after the committee hearing Thursday. “If this were easy, there would be no need for leadership.”

Some allies have grumbled privately that O’Malley has focused his attention on Washington – at the expense, they say, of state priorities.

Republicans have been more open in their criticism, with the Senate GOP caucus issuing a statement this week complaining that this session O’Malley has been “nowhere to be found … unless of course you find him in Washington, D.C.”

O’Malley has spent five of the past six days commuting to the nation’s capital for various meetings, according to his public schedule.

Lawmakers, fresh from a bruising election cycle, appear particularly attuned this session to issues that could hit the pocketbook or stall economic growth. O’Malley acknowledged this week that prospects have dimmed for his plan to limit new septic systems after suburban and rural counties warned the measure would stifle growth.

O’Malley spent more than an hour Thursday pitching the wind energy bill to the House Economic Matters Committee and taking questions from delegates. It was the second time this session he’s testified in support of legislation.

The measure would require electric utilities in the state to buy 20-year contracts from wind energy providers at prices above the market.

The wind companies would build up to 120 turbines about 10 miles off Ocean City, which, advocates said, would generate enough electricity to power half the homes and businesses in Baltimore.

But there’s a cost: Consumers would see their electricity bills increase. O’Malley estimates the hike at an average of $1.44 a month; a legislative analysis estimates it at $3.61 a month.

Larger energy consumers – including schools and hospitals – would see much greater increases. Baltimore city government, for example, could see annual energy costs rise by $1.5 million, according to a fiscal analysis.

The bill has attracted support from environmental groups, who see wind as an attractive alternative to fossil fuels, and labor unions eager for new construction jobs.

Power companies oppose it. The Maryland Energy Group sees the proposal as a “large tax on Marylanders to subsidize wind developers” who would have “a blank check” to build turbines.

Constellation Energy warned in a position paper that the legislation “disrupts more than 10 years of state policy” that puts the costs and risk of new energy generation projects on private investors.

The governor brushed off concerns from opponents: “When the big energy companies disagree with me, I feel I must be right,” he said. “They make a lot of money on the status quo.”

There are no wind farms off the Atlantic Coast, but three projects are under way. The Obama administration has signaled that it will quicken the federal permitting process needed for construction, which could lead to a number of new projects.

Neighboring states, including Delaware and New Jersey, have enacted similar incentives to help develop offshore wind.

O’Malley said there would be “winners and losers” as the economy recovers. He said his plan could generate 2,000 new construction jobs and 400 permanent positions.

A panel of wind industry representatives underscored that message, suggesting that Maryland could lose out if the state doesn’t act quickly to court their business.

The state is bound by law to obtain 20 percent of its power from renewable energy by 2022. If O’Malley’s incentive package is approved, the governor believes up to 15 percent of the clean energy goal would be met with wind power.

A handful of firms, including one that recently hired longtime O’Malley chief of staff Michael Enright, have expressed interest in building a Maryland-based wind farm. The project could cost more than $1 billion to build, triggering increases for ratepayers beginning in 2016.

The governor waved off the higher rates as negligible. He said Marylanders could replace two traditional light bulbs with a pair of compact fluorescents and see enough savings to offset the increase to energy bills.

But delegates were not so sure. Del. Sally Jameson said the legislation would mean “another little charge” on ratepayers.

“They all add up,” the Charles County Democrat said. “I can show you my bill. While it might not be a huge impact, the economy is down and people are struggling.”

Those bills could rise no matter what the General Assembly does. O’Malley said price forecasts for traditional energy sources could not be trusted because of the latest political unrest in the Middle East.

Maryland Energy Administration Director Malcolm Woolf said “the cost of fossil fuels will go up, while wind will continue to be free.”

Woolf testified that the state is uniquely positioned to take advantage of offshore wind farms: The wind is consistent, the ocean floor slopes gently and the state is near a large population center.

The offshore turbines tend to generate more power than the land-based windmills, but they are far more expensive. The state already has two land-based wind farms in Garrett County.

Baltimore Sun reporter Julie Bykowicz contributed to this article.

URL to article:  https://www.wind-watch.org/news/2011/03/04/omalley-wind-plan-draws-questions/