Forcing Md. Power Plants To Reduce CO2 Will Actually Save Consumers Cash, Study Says - Southern Maryland Headline News

Forcing Md. Power Plants To Reduce CO2 Will Actually Save Consumers Cash, Study Says

By MEGAN HARTLEY, Capital News Service

ANNAPOLIS - Forcing power plants to reduce carbon dioxide emissions will not make consumers - or in most cases the power plants themselves - feel a pinch in their pocketbooks, according to a study released Thursday.

Economists from the University of Maryland, Towson University and a Washington think tank, Resources for the Future, said the overall affect on Maryland's economy will be slightly positive when Maryland joins the Regional Greenhouse Gas Initiative in June.

"We concluded that there is a modest positive effect, it will actually lower a consumers electricity bill by about $22 dollars per year," said Steve Gabriel, co-principal investigator at the University of Maryland. "We can breathe a sigh of relief. Actually, we can breathe better, because that, after all, is the intent of the program."

The Regional Greenhouse Gas Initiative, or RGGI, is a cooperative effort by Northeastern and Mid-Atlantic states to reduce carbon dioxide emissions. A law passed by the General Assembly last year requires Maryland to join RGGI in June.

The law, known as the Healthy Air Act, was a contentious partisan issue in the legislature, with Republicans arguing that it would drastically increase utility bills and cause rolling blackouts.

The Maryland Department of the Environment requested the University of Maryland to conduct an independent study to understand how Maryland's energy economy - which replies heavily on coal powered plants - would be affected by introducing a cap-and-trade system.

A cap-and-trade system sets an overall emissions limit and then gives - or auctions off - emission allowances to power plants up to that limit. Power plants that want to be able to produce more emissions can purchase allowances from other plants.

In the end, economists said energy generation will increase at a slower rate than if Maryland did not join the initiative. This will cause carbon dioxide emissions from power plants to decrease 10 percent in Maryland and 4 percent in the RGGI region.

However, this will not negatively affect power plants, which are given 75 percent of the carbon dioxide allowances to trade for profit, according to the economists.

"The good news for coal fire generators is that they can continue to make money," said Gabriel."

Constellation Energy, the parent company of Baltimore Gas and Electric and one of the largest energy suppliers in North America, says RGGI is a good thing because it sets an example for the rest of the country and may be an impetus for a national program.

"Cap-and-trade is a little better than not having cap-and-trade. If you cannot do it then maybe your neighbor can and you can do a little less," said John Quinn, lead engineer for Constellation Energy. "We cannot wait to work with RGGI. It's a good demonstration project and a stepping stone to a national program."

Quinn pointed out that Pennsylvania did not decide to join the initiative, because of its large number of coal power plants. He says consumers may turn to Pennsylvania for cheaper energy, and that a national program could fix these types of problems.

David Neurohr of Allegheny Energy agrees that there should be a federal program instead of a regional one.

"In the atmosphere, greenhouse gases do not recognize state boarders," said Neurohr. "We need a global solution for a global problem." Consumer power bills will decrease because of new energy incentives offered for things such as low energy refrigerators. The revenue for these incentives will come from the other 25 percent of carbon dioxide allowances that are auctioned off to power plants.

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