ANNAPOLIS – Fifteen years ago, lawmakers started the long process of phasing in renewable energy to Maryland’s power supplies, and this year, they may have to decide how much further to take it.
Maryland’s goal is to have a quarter of its power generated by renewable sources by next year, and it’s currently on track to meet its deadline, said Sen. Brian Feldman (D-Montgomery), who has worked on the state’s Renewable Portfolio Standard since it was created in 2004. With the state’s list of energy requirements set to end in 2020, Feldman is now pushing to increase the goal to 50 percent by 2030.
“It all starts today with the hearing,” he said.
The state Senate Finance Committee met on Tuesday to listen to Feldman’s Clean Energy Jobs Act, which carves out new goals for solar and offshore wind development. The bill also increases the amount of credits that electric utilities such as Potomac Edison must buy so that a greater percentage of their power is represented by renewable sources.
The Renewable Portfolio Standard is based on a system to buying and selling “renewable energy credits,” which are equal to 1 megawatt-hour of electricity generated by a range of sources.
Maryland’s electricity comes from the regional Pennsylvania New Jersey Maryland electrical grid, however, which means the credits bought and sold by Maryland utilities are not necessarily generated in the state. This has been a source of repeat criticism, and a point Sen. Edward Reilly (R-Anne Arundel) made Tuesday.
“Energy is produced in other states, and we’re buying their paper [credits],” Reilly said.
Feldman said this was true. However, the underlying system of the Renewable Portfolio Standard is built around the private market pricing the credits and keeping rates down for residential customers as renewable energy is phased in, he said.
Glen Thomas, president of the PJM Providers Group that includes the 13 largest energy producers on the PJM grid, asked for the lawmakers to stop raising the Renewable Portfolio Standard. The problem with the standard is that the government gets to select the technology and how much of it needs to be deployed, rather than allowing the market to decide what is most cost-effective, he said.
He pointed to the two wind projects approved after the Legislature passed the Maryland Offshore Wind Energy Act of 2013, which cost $2.1 billion to build 366 megawatts of power, while a natural gas plant that opened in January in Pennsylvania cost $1.25 billion and produces more than four times the amount of electricity.
“Anytime you subsidize certain resources in a competitive market, it distorts the competitive market,” Thomas said in an interview after the hearing.
Without an increase to the Renewable Portfolio Standard, however, some businesses cannot afford to build new solar or wind projects in Maryland.
Mike Volpe, vice president of Open Road Renewables, has been trying to develop a large solar project in Caroline County for three years, but the economics won’t work on the project until the Renewable Portfolio Standard is increased again.
“The reason for that is the demand in the current Renewable Portfolio Standard has been satisfied. Meaning, the amount of in-state solar that’s demanded has been fulfilled and therefore the [solar renewable energy credit] value is depressed,” Volpe said after the hearing.
Homeowners who put solar panels on their roofs have felt the pinch, too, as solar renewable energy credits have hovered around $10 each. Many have not sold their credits yet due to the low prices and the oversupply of credits.
Increasing the Renewable Portfolio Standard could improve the prices, but it is difficult to predict by how much, Volpe said.
Last year, a bill was introduced, then withdrawn, to dismantle the state’s renewable energy credit market and require 100 percent renewable energy to be produced in Maryland. However, it also split support on Feldman’s previous iteration of the Clean Energy Jobs Act, which pushed Maryland to where it is today and up against its 2020 end goal.
Feldman waited several weeks into the session before introducing his bill, in order to make sure there wasn’t a competing bill again this year.
He got the Sierra Club of Maryland to support his bill by including a supplemental feasibility study to evaluate the overall cost and benefits of increasing the Renewable Portfolio Standard to 100 percent by 2040. The study must be completed before January 2023.
In order to get his 50 percent bill out of committee and onto the Senate floor, however, Feldman will need at least six members of the Finance Committee to vote yes on his bill this session. Feldman is vice chairman of the committee, which leaves him with five minds to change.
Several members of the Finance Committee are new and have not dealt with the Renewable Portfolio Standard before. Feldman said he would need to “feel out” the committee to gauge their opinions on the bill.
One important change was the support of Wheelabrator Baltimore – a waste-to-energy trash incinerator in Baltimore – which opposed Feldman’s bill last year. The change of position comes as Feldman struck waste-to-energy and refuse-derived fuels from the list of eligible sources to be sold as renewable energy credits. Representatives of Wheelabrator Baltimore said the company would support the bill if waste-to-energy were added back as an eligible source.
Sen. Michael Hough (R-Frederick & Carroll) also has a bill to remove waste-to-energy facilities, after successfully passing an amendment on the Senate floor to strike it during a previous session.
Given all the variables, Feldman was unsure which way the committee would ultimately lean.
“This is actually uncharted territory for some of them,” Feldman said.
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