By Daniel Menefee, Dan@MarylandReporter.com
ANNAPOLIS—The House passed the administration’s offshore wind power bill (2012 House Bill 441) Friday amid accusations Gov. Martin O’Malley secured votes on the House Economic Matters Committee with disparity grants to committee members’ districts.
“Those of you who have been here longer than two weeks know there’s a lot of complicated pressures that go into making a bill pass or fail,” said House Minority Leader Anthony O’Donnell. “Sometimes it takes a little nudge, sometimes it takes a carrot, and sometimes it takes a stick.”
The disparity grant program in Maryland provides subsidies to jurisdictions with income tax receipts that fall below 75% of the state household average. Sources close to the Environmental and Economic Matters Committees said the administration leveraged grant money for favorable votes on the wind bill.
O’Donnell made strong inferences on the House floor that the administration used the “vast tools in the budget process” to sway committee members to move the bill to a full vote in the House.
The administration wants a developer to place 40 wind turbines 10 miles off the coast of Ocean City by 2017 to help the state meet its renewable energy portfolio of 20% by 2022.
“I’m not saying that happened here,” O’Donnell said. “But we all know this is part of the process.”
A lawmaker who asked to remain anonymous said disparity grants “can be used as leverage but usually for other budget items.”
Other politicos close to the process said there were “rumblings” about the administration “flexing its financial muscle on the Economic Matters Committee…there was some coercion.”
Del. Dereck Davis, D-Prince George’s, chair of the Economic Matters Committee responded to the accusations of “pressure” from the administration.
“You all know me,” Davis said on the House floor. “Nobody pressures me into a darn thing.”
Del. Brian McHale, D-Baltimore City, also objected to O’Donnell’s accusations and insisted it was the House Economic Matters Committee that applied pressure on the administration to remove any risk to consumers in the bill.
The wind farm bill failed last year because the proposed $9 monthly surcharge to households created sticker shock among lawmakers who were reluctant to raise electric rates in a recessionary environment. Last year’s bill also didn’t bode well with utility companies that would have been required to buy the wind power.
This year’s bill would cap rates at $1.50 per 1000 kilowatt-hours for households and businesses would pay 1.5% of total consumption. The purchase mandate to power companies was also removed in this year’s bill.
O’Donnell also took issue with a provision that requires the use of union labor for the project.
“Those who are not unionized will not be able to compete for this work,” O’Donnell said. “It’s anti-competitive and it will drive up costs.”
Davis responded that the project was “not strictly the domain of organized labor” and that non-union labor could also participate.
Some lawmakers say offshore wind is too expensive
Other Republican lawmakers ranted on a troubled future for offshore wind, citing problems in other countries that have used offshore wind since the 1990s.
Del. Patrick McDonough, R-Harford, said British citizens were in “rebellion” because offshore wind power has spiked energy bills. He also said experts in the economics of offshore wind power were walking away from similar projects because federal incentives were no longer available to defray the high costs of production.
He said that Spain’s largest wind turbine producer recently cut its production in half because of falling demand.
The cost to produce offshore wind power is 24 cents a kilowatt — compared to nuclear, coal, and gas, which average 11 cents to produce.
McDonough said he had serious doubts the $1.5 billion estimate to build the facility was realistic. He pointed to cost overruns to build the Intercounty Connector between Montgomery and Prince George’s counties and the I-95 redevelopment.
McDonough believes any cost overruns would likely come back on ratepayers and said the $1.50 monthly charge to households was a “phony baloney figure.”
Del. Ben Kramer, D-Montgomery, who opposed the project last year, said this year’s bill was drastically different and removed all the risks to households in development of the proposed wind farm.
“We have a very different bill this year,” Kramer said, looking towards McDonough. “The bill now puts the risk only on the developer and the ratepayer will not pay a nickel until the facility is built, operating, and producing electricity, and we will not be assuming the risks of a failed offshore wind project.”
The bill passed by a vote of 88-47 with only five Democrats voting against the measure.
Supporters in Annapolis before the vote
Supporters of offshore wind power held a press conference in Lawyers Mall in Annapolis in advance of the House vote.
“Maryland needs offshore wind power,” said Environment Maryland Campaign Director Tommy Landers, who released a report on the benefits of offshore wind in advance of the vote.
He said the benefits of offshore wind would be felt throughout the entire state in maintaining agricultural activity on the Eastern Shore and preserving forest lands in Western Maryland.
“Every region in Maryland stands to benefit,” he said.
Del. Tom Hucker, D-Montgomery, said the Republican opponents of the bill were running out of arguments to stop the bill, which would put 40 wind turbines 10 miles off the coast of Ocean City, Maryland. He said opponents were “entertaining and inconsistent” in their opposition to the subsidizing the offshore wind with ratepayer subsidies, when Maryland has subsidized the coal and nuclear energy “for decades.”
Hucker said the $1.50 per 1000 Kilowatt-hour surcharge in the bill provides ratepayer protections that were not available when Calvert Cliffs nuclear plant and the major coal plants came on-line.
“This in fact the first time the legislature has weighed in and established ratepayer protections to make sure consumers get a great deal from this new energy source,” Hucker said.