Maryland Gov. Martin O’Malley says he is ready to promote offshore wind energy in this year’s General Assembly but suggests his proposal will be less aggressive than one that failed in the 2011 legislature.
Mr. O’Malley, a Democrat, hinted last week that he will push for legislation that encourages utilities to buy energy credits from offshore wind firms, istead of forcing them to enter 25-year contracts with the firms. The bill failed largely because of legislators’ concerns that the mandatory agreement would increase energy costs and consumers’ utility bills.
The governor has argued that implementing offshore wind energy will reduce dependence on such non-renewable energy as coal and attract firms to the state, creating thousands of jobs. The state as of last summer got about 5.5 percent of its energy from such renewable sources as wind and solar, but officials want to increase that number to 20 percent by 2022.
“We will be doing something to advance offshore wind,” he said. “We are adjacent to a huge natural resource, offshore on this Atlantic seaboard.”
Mr. O’Malley said he and lawmakers are still firming up details before the 2012 Assembly session starts Jan. 11, but that legislation to establish offshore wind will likely focus on giving utilities the option to buy renewable energy certificates from wind-energy providers.
Legislators have said the proposal could be patterned after one in New Jersey in which utilities receive a tax incentive from buying the certificates. The certificates represent the value of wind energy produced by the firm and fed into the statewide grid.
“I think there has been some shift” away from long-term contracts, said Sen. Paul Pinsky, Prince George’s Democrat who sponsored last year’s unsuccessful bill. “Some people are just fearful, so either you change their minds or give them another avenue.”
A successful offshore wind bill in Maryland would come on the heals of a recent victory for wind supporters.
Chicago-based Exelon Corp. agreed last month to invest $30 million in offshore wind in Maryland as part of its proposed $7.9-billion takeover of Constellation Energy, which owns Baltimore Gas and Electric, the state’s largest utility provider.
Offshore wind supporters have argued that Maryland must join the new industry now to avoid losing business other coastal states including Delaware, New Jersey and Massachusetts, where in 2010 the Obama administration approved permits for what is expected to be the country’s first offshore wind farm.
However, the industry suffered a setback last week when New Jersey-based NRG Energy, parent company of wind-energy developer Bluewater Wind, announced it had terminated an offshore wind power contract with Delaware utility Delmarva Power, after Bluewater was unable to secure financing for the project in the current economic climate.
Bluewater entered a contract in 2008 to build as many as 150 turbines off the Delaware coast, and its failure to deliver fueled some observers’ arguments that offshore wind is too expensive or risky to attempt in tough financial times.
O’Malley spokeswoman Takirra Winfield said that Bluewater’s failure in Delaware is unlikely to change the governor’s approach.
Mr. Pinsky acknowledged that offshore wind is facing tough “political realities” but said it can succeed with state support and help from Congress, which has yet to extend federal tax credits for the technology that expire this year.
“I think we have a fair chance but not a sure thing,” he said.
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