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McDermott calls offshore wind a ‘feel-good bill’

OCEAN CITY – The long-standing effort to develop an offshore wind farm off the coast of Ocean City passed a significant hurdle on Monday when the House Economic Matters Committee passed Governor Martin O’Malley’s Offshore Wind Energy Act of 2012.

The House Economic Matters Committee on Monday approved the governor’s latest attempt at an offshore wind energy bill by a vote of 13-9, providing a possible jumpstart for the passage of the legislation this year. The intent of the legislation is to harness an untapped renewable energy source that could move Maryland closer to its long-term goal of diversifying its energy portfolio.

Last year, O’Malley introduced similar legislation that ultimately stalled over concerns about what the development of as many as 100 wind turbines off the coast of Ocean City would cost the ratepayers. State lawmakers rejected the proposal over concerns about taxpayer investment in what will largely be a private enterprise.

The O’Malley Administration went back to the drawing board over the summer and reintroduced a modified version of the bill at the onset of the current General Assembly session modeled loosely on similar legislation passed last year in New Jersey that afforded protections to the state’s ratepayers. On Monday, the House Economic Matters Committee passed the governor’s proposed legislation, but not before adding a couple of amendments to lessen the burden on the ratepayers.

For example, the approved amendments reduced the maximum monthly surcharge on electric power bills to $1.50. Another amendment reduced the maximum surcharge for commercial and industrial customers from 2.5 percent of their monthly bill to 1.5 percent.

However, even at the reduced surcharge for ratepayers, not everyone is enamored with the bill. For example, Delegate Mike McDermott (R-38B) said this week he is uncomfortable with the bill because of the level of public investment in what will largely be a private enterprise.

“I’ve been opposed to the idea of the state government subsidizing private industry, and in this case, it’s really a double subsidy because you have state dollars invested and the ratepayers investing in it.”
McDermott said the reduced ratepayer surcharge makes implementing the offshore wind plan unlikely.

“It’s absolutely not even possible this is going to be implemented with those numbers,” he said. “On principal, I don’t care if it’s a 75-cent surcharge for ratepayers. Why should the citizens of Maryland subsidize this industry?”

O’Malley’s latest attempt would set up a market driven process including incentives for the construction of as many as 100 wind turbines off the resort coast capable of producing 71 percent of the Eastern Shore’s current demand. The proposed wind farm would provide an estimated 450 megawatts of clean, renewable energy while creating as many as 1,800 construction jobs and another 360 ongoing maintenance jobs.

In 2008, the General Assembly doubled the state’s renewable portfolio standard, requiring electricity suppliers to purchase 20 percent of the power they sell from renewable sources. As a result, wind energy was identified as an obvious source to meet those goals, but the approval process has met with several obstacles along the way. Monday’s committee vote removed at least one of those obstacles.

“This bill is an important first step,” said Mike Tidwell, director of the Chesapeake Climate Action Network. “It will help clean our air, create jobs and combat the extreme weather impacts we’re already seeing from climate change.”

While the effort to develop wind energy off Ocean City’s coast is largely an environmental issue, its potential economic benefit cannot be overlooked, according to advocates.

“Maryland’s businesses want to see offshore wind development come to our state and for good reason,” said Ross Tyler of the Business Coalition of Maryland Offshore Wind. “This is a jobs bill. The General Assembly should pass the offshore wind bill and start a new industry for the U.S., which will bring thousands of new jobs to the state.”

McDermott said he understands the need to diversify the state’s renewable energy portfolio, but given the economic factors involved, he said O’Malley’s bill is more symbolic than practical.

“This will look good on the governor’s green card to say he was able to get offshore wind passed in Maryland, but the numbers won’t work and it won’t happen,” he said. “It’s a feel-good bill that doesn’t do anything from a practical standpoint.”

McDermott said Maryland should follow neighboring Virginia’s lead. Just this week, Virginia approved a single wind turbine three miles off the coast of Cape Charles in order to further study the energy potential.

“That seems like a practical approach,” he said. “Let’s do one and see if it does what it’s supposed to do before we invest billions and put 100 of them out there. That’s how private enterprise does things and we should follow that lead.”