O’Malley wins three-year battle over subsidy for offshore wind industry

After three years of debate, countless revisions and lots of downsizing, Maryland Gov. Martin O’Malley’s plan to subsidize development of offshore wind energy passed the state Senate on Friday, all but ensuring final approval in coming days.

The victory for O’Malley (D) on a signature environmental initiative came as his bill to repeal the death penalty advanced in the House of Delegates and as he inched toward support of a measure to legalize medical marijuana.

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Aaron C. Davis

Governor’s bill clears key hurdle Tuesday in state Senate

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The passage of the offshore wind bill, which failed in each of the past two years, would allow Maryland to seek a private developer to build a field of giant turbines off the coast of Ocean City, perhaps by 2017.

To offset the higher-than-market-rate cost of producing the wind energy, each residential ratepayer in Maryland would be charged about a $1.50 a month once the windmills are built. Most businesses would pay a monthly surcharge of 1.5 percent.

The subsidy would add up to $1.7 billion over 20 years, analysts say, but to make the project viable, Congress would need to extend billions of dollars in additional federal tax breaks.

In the wake of the high-profile bankruptcy of Solyndra, the California solar power company that received $500 million in federal clean-energy loan guarantees, O’Malley’s offshore wind plan was met with heavy skepticism when it was first introduced in 2011. Additional questions surfaced about which developers would benefit and whether low-income families would be too burdened by the surcharge amid other tax and fee increases championed by O’Malley.

By shrinking the project to about 200 megawatts, a third of its original size, and therefore lowering the subsidy to about $1.50 a month, O’Malley found a winning number with lawmakers in Annapolis.

He cast the monthly charge as a small price to pay to help establish an industry that holds great potential for green energy but has been stymied by its multibillion-dollar upfront costs.

“There is an appropriate role of government in helping industry on that first step. . . . Economies of scale don’t happen by choice, they don’t drift here on the Gulf Stream,” O’Malley said in testifying on the bill before a Senate committee last month.

Outside the State House on Friday, O’Malley simply said that he was “elated” by the 30 to 15 Senate vote and looked forward to signing the bill.

Minor changes made by the Senate will require another vote in the House, but that chamber approved the plan by a wide margin last month.

Despite O’Malley’s push for offshore wind for much of his second term, this week marked the first time the measure made it to the Senate floor for a vote.

Republicans responded with a barrage of amendments, tying up a vote for three days.

“This is the dumbest idea ever. Never before have so many Marylanders paid for the benefit of so few,” said Senate Minority Leader E. J. Pipkin (R-Cecil). He said the bill was “the worst kind of corporate welfare” and would benefit offshore wind developers over others in the clean-energy market.