ANNAPOLIS – Several of Gov. Martin O’Malley’s chief legislative initiatives have run into tough questioning or strong resistance from lawmakers this year, prompting uncertainty about the outcome of the governor’s agenda more than halfway through the General Assembly session.
The skeptical response continued Thursday in the House Economic Matters Committee when O’Malley outlined his proposal requiring public utilities to sign long-term purchase agreements with future wind-power-generation facilities in the Atlantic Ocean.
Legislators questioned the impact on ratepayers’ electricity bills if O’Malley’s offshore wind proposal is enacted. The administration estimates it would add $1.44 to monthly bills, beginning in 2016, with the amount decreasing each year thereafter. However, separate estimates from a private wind developer and a federal agency put the initial burden on consumers at $2 and $3.61 more per month, respectively.
“Each time we put another charge on our ratepayers, we have to look and realize that they eventually all add up,” said Del. Sally Y. Jameson (D-Dist. 28) of Bryantown.
O’Malley (D) argued the upfront investment in renewable power will create jobs and help secure Maryland’s long-term energy future. By forcing investor-owned utilities such as Pepco and Baltimore Gas & Electric to enter into 25-year contracts for offshore wind, ratepayers will be assured of stable energy prices instead of relying on the volatile market for fossil fuels, he said.
“This, I believe, is a reasonable risk to take if we believe that in fact greenhouse gas emissions won’t reduce themselves on their own and if we believe that in this competition for jobs, Maryland is worth fighting for,” O’Malley said.
The state’s major utility companies and many business groups oppose the measure, saying there are more cost-effective energy alternatives that don’t mandate long-term contracts.
“Whenever all of the big energy companies disagree with me, I feel I therefore must be right,” O’Malley cracked.
The proposal’s large price tag is a potential stumbling block, several committee members said. Although that’s a legitimate concern, House Economic Matters Committee Chairman Dereck E. Davis (D-Dist. 25) of Upper Marlboro said he would work to ensure its passage.
It is important that lawmakers evaluate any bill backed by the administration on its merits, not based on its sponsor, Jameson said.
She was one of seven House Democrats who signed a letter last week expressing concern about another O’Malley initiative that proposed banning most new septic systems across the state. Rural lawmakers maintained that their constituents would be disproportionately affected.
That measure now appears headed for summer study, with House Environmental Matters Committee Chairwoman Maggie L. McIntosh saying the potential impacts on development in rural areas especially need to be further examined during the legislative interim.
“We just need to make sure when we move forward that we are not accepting a bill just because it is in his agenda,” Jameson said of the governor.
O’Malley’s other signature initiative also faces an uncertain road. InvestMaryland is a $100 million tax credit program designed to fuel investment in emerging high-tech businesses.
Some lawmakers are hesitant to auction $142 million in premium tax credits to insurance companies at discounted rates with no guarantees of a return on the investment.
Del. Ronald A. George questions whether the state Department of Business and Economic Development should be selecting recipients for the program. He prefers allowing private venture capitalists, who currently would receive one-half of the proceeds to distribute, to receive all the dividends.
Although he applauds the governor for thinking outside the box to stimulate job growth, InvestMaryland might not be a risk worth taking, he said.
“I think we have to get off just the idea phase and not present legislation based on simple ideas until they’re well-thought-out,” said George (R-Dist. 30) of Arnold. “These are big, game-changing pieces of legislation.”
Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach also is hesitant about sinking so much money into an unproven program.
“I don’t know that we need to be incurring more debt at this time,” he said. “These are very difficult economic times and the governor wants to jump-start the economy by borrowing, and some economic advisers are looking askance at the proposal.”
But Del. C. William Frick (D-Dist. 16) of Bethesda, who chairs the House subcommittee that is examining the InvestMaryland proposal, said fiscally challenging times call for inventive programs that can provide needed capital for startup firms.
“The state of the economy cuts both ways,” he said. “It makes it important for us to be prudent stewards of public funds, but it also cries out for innovative ways to get the economy moving. We know the opportunities are out there, so I don’t think it’s risky to try and exploit them. It’s prudent.”
For his part, O’Malley isn’t troubled by the legislative setbacks and potential struggles ahead.
“I think it shows that we’re pressing the envelope in what’s possible and pushing for progress for the people of our state,” he said.
“If these proposals were easy and without question, there would be no need for leadership. But these are difficult issues. There are no simple and easy solutions.”
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