A better wind bill
April 2, 2012 (baltimoresun.com)
For all its risks and potential costs, Gov. Martin O’Malley’s unsuccessful 2011 bill to facilitate the construction of offshore wind turbines near Ocean City would have benefited the state — and its electricity customers — through predictable, clean energy for decades to come. The 2012 version of the legislation should be a no-brainer. The governor’s new proposal further shelters consumers from the risks of such a project and reduces the costs they may eventually pay. The House of Delegates, which voted Friday in favor of the plan, amended the bill to reduce the cost even more. It deserves the support of the full General Assembly.
Although offshore wind farms are relatively common in Europe, they have been slow to develop in the United States amid debate about their cost effectiveness and environmental benefits. They are certainly not the sole answer to Maryland’s future power needs, but if the state has any hope of achieving its aggressive goals for renewable energy — and particularly if it hopes to do so in a way that benefits Maryland’s economy — offshore wind needs to be part of the picture. Maryland is committed to getting 20 percent of its energy from renewable sources by 2020, and that will almost certainly require harnessing the wind off the Atlantic Coast.
Maryland’s offshore wind farm could blow contracts ashore
March 30, 2012 (gazette.net)
An offshore wind farm will mean opportunities for a range of small and minority-owned businesses in Maryland, executives learned Wednesday.
“There are many different industries involved in this project, industries that are already here in Maryland,” Ross Tyler, director of the Business Coalition for Maryland Offshore Wind told businesspeople attending a forum in Annapolis.
Gov. Martin O’Malley (D) is calling for a 310-megawatt installation off the coast of Ocean City, at a cost of almost $1 billion. State estimates predict the project’s economic impact during the next five years could reach $2 billion, with $8.7 million in additional state tax revenues. O’Malley has introduced legislation that would add fees to electric users’ bills to help attract developers to build the wind farm.
The House Economic Matters Committee approved the bill Monday, after reducing the average residential ratepayers’ additional monthly fee to $1.50 from $2 and exempting from the surcharge the first 750 million kilowatt hours of annual electricity use by an industrial concern.
Other amendments under discussion include creating a $10 million Offshore Wind Business Development Fund to support a local supply chain for small and minority-owned businesses and a potential wind business incubator.
Explanation of Maryland Offshore Wind Bill
Maryland Offshore Wind Energy Act of 2012
Background
Maryland’s homegrown offshore wind power provides unique benefits to the state that no other energy source offers. As the only state energy source abundant enough to meet our renewable energy goals, offshore wind offers unmatched job-creation and air pollution reduction benefits.
What does the Maryland Offshore Wind Energy Act of 2012 do?
The 2012 Maryland offshore wind bill sets up a process to create a “carve out” for offshore wind energy within the state’s renewable portfolio standard (RPS) as long as specific criteria are met. Maryland already has a solar carve-out in the RPS, which created solar renewable energy credits or SRECs. While structured with some differences, an offshore carve-out would create offshore wind renewable energy credits or ORECs
If certain conditions are met, Maryland’s electricity suppliers would be required to acquire a certain amount of ORECs from qualified offshore wind providers starting in 2017 and not to exceed 2.5% of state electricity sales (about 500 MW). The state’s Public Service Commission will oversee a process by which offshore wind developers will compete to become qualified to provide ORECs. The winning bids will be determined by a set of legislated criteria including lowest price, long-term price stability, environmental and public health benefits, in-state jobs, and other factors. A carve out will only be created if proposals are found to provide positive net benefits to the state and to be priced below statutory safeguards for ratepayers.
How is this year’s bill different from the one proposed in 2011?
This year’s bill sets up a more market-friendly process to incentivize offshore wind development, includes stronger provisions to protect consumers and promote in-state jobs, and ensures positive net benefits to the state.
Instead of setting up a process that could direct utilities to sign long term contracts for offshore wind energy, the 2012 bill sets up a process to establish a carve out in the RPS for offshore wind. If certain conditions are met, electricity suppliers will be required to acquire offshore renewable energy credits (ORECs) from qualifying projects. To qualify, offshore wind projects must demonstrate positive net benefits to the state (including in-state jobs, health benefits, and electric rates), be located in federal waters off the coast of Maryland, and be priced below statutory safeguards for ratepayers.
How are consumers protected in the 2012 bill?
No project will be approved if it is projected to increase an average resident’s electric bill more than $2 per month or any nonresidential ratepayer’s electric bill more than 2.5%. The rate impact of ORECs will be projected up front based on a 20 year projection of future energy prices. The actual impact will not vary much from the projection as offshore wind will represent a small portion of the state’s electricity sales (up to just 2.5%). If fossil fuel prices rise higher than expected, then ratepayers will come out ahead earlier. If fossil fuel prices are lower than expected, offshore wind will cost slightly more comparatively, but energy bills will still be lower than projected. About 60 percent of the energy generated in Maryland comes from fossil fuels and from 1999-2009, energy bills for Marylanders roughly doubled. Maryland also imports 30% of its electricity and sends 90% of its non-solar renewable dollars out of state. This bill will create a carve-out for Maryland’s most abundant home-grown and stable-priced energy resource.
How does the 2012 bill promote Maryland jobs more heavily than last year’s bill?
Maryland offshore wind power will bring new jobs to a number of industries, including steel manufacturing and various construction trades. Maryland’s local workforce is further promoted in the 2012 bill as only offshore wind projects in federal waters off the coast of Maryland will qualify for ORECs.. A project also must show net benefits including in-state job creation in order to be approved and projects that make the largest commitment to in-state jobs and to partnering with Maryland businesses, including small and minority owned enterprises, will be favored. There are over 1000 businesses in Maryland, including over 200 minority business enterprises, that are in industries that could participate in offshore wind development.
For more information, please contact Tom Carlson, Marylanders for Offshore Wind (tom@chesapeakeclimate.org; 240-396-2035)