Maryland Governor Martin O’Malley has proposed a major offshore wind energy plan in his state for the second year in a row. But even though the plan has wide backing from environmental groups and the public, it may once again face stiff headwinds of opposition from utilities and the state legislature.
The proposal, entitled The Maryland Offshore Wind Energy Act of 2012, would establish an offshore wind renewable energy credit (OREC) carve-out within the state’s 20 percent by 2022 renewable portfolio standard (RPS). This OREC system would help facilitate new offshore wind turbine construction by requiring utilities to buy a certain percentage of their electricity from offshore wind farms.
O’Malley’s proposal is similar to a proposal that was ultimately tabled in the 2011 state legislative session. Lawmakers opposed the bill over concerns that consumer utility rates would spike if state utilities were required to sign 20-year purchase agreements at above-market rates.
This year’s proposal met with a lukewarm initial reception from state lawmakers, even though hundreds of offshore wind supporters demonstrated outside the state house when this year’s legislative session first convened.
Several measures have been added to the 2012 version to protect consumers and make it more palatable to legislators. To start, subsidies for the wind farm would be capped at $2 a month beyond what electricity consumers would have paid. Administration officials would also require independent analysis to ensure the added utility costs would provide expected economic and environmental benefits.
The most unique feature of the new proposal, however, could be the OREC carve-out. Under this plan, Maryland’s Public Service Commission would establish a commodities market for the wind farm electricity to be sold at competitive prices and come with renewable energy credits to meet the state mandate. Credit prices would rise and fall with market rates to ensure a stable profit.
If approved, the plan could create an abundance of green jobs. State estimates say it would guarantee construction of at least one 100-turbine, 450-megawatt (MW) project, and would represent 1,800 temporary construction jobs and 360 permanent maintenance jobs.
“Offshore wind has the potential to be a big win for our state,” said O’Malley in 2011. “A win for jobs, a win for consumers, a win for business and a win for our energy future.”
But the biggest factor in support of O’Malley’s proposal may be the general public. In a poll released just as he unveiled his plan, a statewide poll shows nearly two-thirds of statewide voters favor developing offshore wind power even if it would raise rates by $2 a month.
Interestingly enough, the poll specifically surveyed voters in the districts of four Democrats on the Senate Finance Committee who didn’t support the 2011 proposal. In these districts, support ranged from 63 to 72 percent, with the highest support in the coastal communities within sight of the proposed wind farm location.
Silvio is Principal at Marcacci Communications, a full-service clean energy public relations company based in Washington, D.C.