Governor's Plan for Greenhouse Gas Revenue Loses in Senate Vote

By KATE ELIZABETH QUERAM, Capital News Service

ANNAPOLIS (April 1, 2008) - In what some legislators called a surprising move, the Senate Tuesday voted down a bill put forth by Gov. Martin O'Malley outlining how to spend an estimated $140 million the state will receive from a September Regional Greenhouse Gas Initiative (RGGI) auction.

O'Malley's plan, as amended by the Senate Monday, would have spent half the money for energy efficiency and conservation, with much of the rest going to rate relief for consumers.

Instead, a number of senators said all of the money should be given to ratepayers who have seen their energy bills skyrocket in recent years.

After extensive debate, the Senate rejected O'Malley's proposal 25 to 21. The House version of the bill is scheduled for a vote Wednesday.

The bill would create the Maryland Strategic Energy Investment Fund, to be financed with money the state will receive from the sale of RGGI carbon allowances. Power plants in RGGI-participating states are allowed a set limit of emission credits, but can buy extra credits from other plants at the auction in September.

The proposed fund would be administered by the Maryland Energy Administration, and would be used to develop clean, renewable energy sources, like solar or wind power.

Opponents of the bill criticized using the money to give more power to a state agency instead of refunding ratepayers who are already paying increasingly expensive utility bills.

"We weren't here for the birth of the Roman Empire, but we will be here for the birth of the Maryland Energy Administration empire," said Sen. E.J. Pipkin, R-Cecil, during the debate on the floor. "This money should have been returned to the ratepayers."

Sen. J. Lowell Stoltzfus, R-Somerset, agreed.

"It didn't give sufficient relief to the ratepayers," Stoltzfus said, after the vote. "Instead, it puts money into bureaucracy."

Supporters of the bill urged the Senate to look beyond the current utility rate problem and remember the bigger picture - namely, the energy crisis facing the state. If Maryland does not reduce consumption or find more energy sources the state could face rolling summer blackouts within a few years.

"By voting against this bill, by saying 'give it all back,' we're putting our heads in the sand and saying there is no problem," said Sen. Paul Pinsky, D-Prince George's.

Sen. Thomas Middleton, D-Charles, agreed with Pinsky, saying that investing in energy efficiency now will lead to lower rates in the future.

Though some senators said the defeat of an administration bill is rare, Senate President Thomas V. Mike Miller Jr., D-Calvert, said the vote didn't surprise him.

"Rates are high, and the senators made some valid arguments that they'd rather the money be put back into ratepayers' pockets," Miller said.

Christine Hansen, a spokeswoman for the governor, said O'Malley hopes the Senate will reconsider the legislation in the coming days. Miller said it's likely to happen sometime this week.

Stoltzfus agreed. "It'll be back within a day or two," he said. "By then they'll have twisted enough arms to change the vote, and it will pass."

During the same session Tuesday, the Senate passed two other O'Malley energy bills. One requires electricity companies to provide customers with energy-efficiency programs and services, and the other increases the state's renewable energy standard, meaning a greater percentage of Maryland's energy has to come from renewable sources like solar power.

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