By Megan Poinski, Megan@MarylandReporter.com
(July 28, 2011)—Despite being a fan of renewable energy and jobs for western Maryland, Comptroller Peter Franchot has voted against a long-term lease for the state’s largest solar energy farm.
The contract for a 20-year lease of about 250 acres near the Hagerstown Prison Complex was approved with the votes of Gov. Martin O’Malley and Treasurer Nancy Kopp at Wednesday’s Board of Public Works meeting. The contractor, Maryland Solar LLC, will fill the land with solar panels to produce 20 megawatts of electricity, expected to double the amount of solar power currently on Maryland’s energy grid.
Maryland Solar then will directly sell the power produced to utility companies. Maryland Solar is building the solar panels and the state’s only role is as the landlord. However, the state still gets the benefit of more renewable energy on its grid.
“In this deal, there is no state money involved,” said Malcolm Woolf, director of the Maryland Energy Administration. “This is a private transaction. It is a goal we have been working toward.”
But Franchot wondered why there had been no attempt to negotiate further with Maryland Solar. Since it is building a renewable energy facility, the company will be receiving federal dollars – Franchot estimated about $24 million. After asking repeatedly, Franchot came to the conclusion that nobody had asked the company if it would be willing to give some of its federal funds to the state.
“That is a significant amount,” Franchot said.
The cost to lease the land – initially brought up by state Sen. Christopher Shank, a Republican from Washington County – was discussed briefly at the meeting, but not addressed by the board. At $128 per acre per year, Shank believes the lease is under-priced. Last week, he wrote a letter to O’Malley asking that the item be tabled because other governments have been able to receive more money to lease land and charge fees for solar generation.
Michael Gaines, assistant secretary for real estate in the Department of General Services, said that the land is currently being leased for agricultural uses and, at $128 per acre, the cost is twice what the U.S. Department of Agriculture would recommend. Gaines added that the current leaseholder is likely to seek a lower rent because of economic conditions, so leasing to the solar company would bring more money into the state.
Besides, he said, the land’s location near a prison makes its uses extremely limited.
“Prior to that [farming], the land was used for dumping of sludge and coal ash,” Gaines said. “It renders the value of the land very very minimal.”
Bruce Poole, attorney for Maryland Solar and former majority leader in the House of Delegates, along with Washington County Del. John Donoghue spoke in favor of the project. They said that it is not only a boon for the state’s energy goals, but creates much-needed jobs in Western Maryland.
Former O’Malley chief of staff Michael Enright is at the helm of a larger company affiliated with Maryland Solar. Acknowledging that, O’Malley said that the contract has been vetted transparently. He added that he wished Enright had gone to the private sector sooner since he is working on large renewable energy projects.
While the agreement isn’t perfect, O’Malley said, it works well for Maryland.
“I don’t think any state has figured out the single best way to move forward with its renewable energy portfolios,” he said.