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Questions of costs, jobs and influence surround O'Malley's offshore wind proposal

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"The things the bill espouses we definitely need to do. Clean energy, green jobs, diversify our energy sources; I support all that," Davis said. "But the thing that gives me pause, what you just can't get around, is the money component, the surcharge. There's no way to gloss over that."

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And assessing just how large that charge may be will be no easy task. Even offshore wind's biggest proponents say that the nature of the governor's proposal - as well as the fact that not a single offshore wind turbine has been constructed in U.S. waters - means that many of the costs are to be determined.

O'Malley's offshore wind proposal would essentially force the start of a new energy market in Maryland.

Under the governor's plan, utility companies would be required to buy wind power at one fixed price for at least 20 years. That price would be set by the state's Public Service Commission next year. The plan assumes that developers will be awarded federal leases late this year or early in 2012, that construction would begin in 2014 and that the first turbines would begin spinning in 2016.

According to cost modeling by the governor's office, which assumes the PSC signs a 25-year contract, Maryland pegs offshore wind costs when the power comes online at about 16.4 cents per kilowatt hour, or more than 60 percent higher than the rate at which most utilities in the state are buying power. Like Delaware, the model assumes the developer receives an annual price increase of 2.5 percent to cover inflation.

But Maryland's budget analyst says the governor's model doesn't factor in all of the costs. The analyst's report estimates an "effective rate" of 21 cents per kilowatt hour for Maryland offshore wind power in 2016, rising to 23 cents by 2040.

By comparison, long-term projections released in January by the U.S. Energy Information Administration forecast that traditional electric power costs - now at an average of 11.1 cents - will fall slightly over nearly the same period.

Abigail Ross-Hopper, O'Malley's energy adviser, said the state's calculations that wind power would be relatively less expensive are based in part on less optimistic and less current modeling of traditional energy costs.

Energy prices in Maryland doubled from 1999 to 2009, and "intuitively it doesn't make much sense that energy prices are going to stay flat for the next 25 years," she said, "it just doesn't."

Maryland expects traditional energy prices to rise 4 percent annually, on average, over the life of its wind contract, or faster than an annual inflation adjustment for wind, meaning that "the incremental price we pay for the wind would actually get smaller and smaller," Ross-Hopper said.

Ross-Hopper said the state' s model was constructed late last year, before the January release of the latest federal data. The federal report attributed its projections of lower long-term energy costs to the country's growing estimated natural gas reserves.

There is also disagreement on how much residential utility bills would likely increase as a result of the wind project. The state originally forecasted an increase of $1.61 a month, but adjusted that downward by 17 cents, saying transmission charges would decrease.


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