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O'Malley's wind energy plan raises cost concerns

By Aaron C. Davis
Washington Post Staff Writer
Thursday, March 3, 2011; 9:15 PM

Maryland Gov. Martin O'Malley vigorously urged state lawmakers on Thursday to approve his plan to spur offshore wind development in the face of new studies suggesting that the monthly cost to residents could approach $9 - or six times the governor's estimate.

Testifying before a committee of state lawmakers who will vote on the plan, O'Malley (D) stuck to his administration's lower figure of $1.44 a month, which a panel of offshore wind developers agreed would be more realistic.

Facing reporters after the hearing, he also disputed suggestions that to further his ambition to build some of the nation's first offshore wind power, he had abandoned a past stance of always fighting to lower Maryland ratepayers' costs.

"The difference is . . . that over the long term, it's actually better for consumers," O'Malley said. "It will allow us to lock in a stable price and . . . to make the transition to not only a cleaner and greener energy future, which is better for the environment, but it also allows us to develop jobs, here and now."

However, members of the House Economic Matters Committee said they were deeply concerned about wild discrepancies in projected costs to ratepayers, as well as murky figures on the number of jobs the project might create in Maryland.

At least two moderate Democrats expected to be key to the plan's passage suggested that lawmakers might need more than the six weeks remaining in the legislative session to adequately evaluate the proposal.

After the legislature's nonpartisan budget analyst's office on Wednesday pegged the monthly cost to residential customers at more than double the governor's, at $3.61, the state's Public Service Commission said Thursday that the range could be $2.16 to $8.70 a month.

"What assurances do we have on the cost, the jobs?" asked Del. Brian K. McHale (D-Baltimore).

"How long would you need to [reconcile] the estimates?" Del. Benjamin F. Kramer (D-Montgomery County) asked the PSC staff.

Some Republicans, however, said they would not support the wind plan at any cost.

"This is a boondoggle that every single resident in the state is going to be shaken down to finance," said Del. Richard K. Impallaria (R-Baltimore County).

The governor's plan would require Maryland utilities to sign 25-year agreements to buy offshore wind power at a price far above the current market rate. The subsidy would go to developers who say they could not secure financing for the estimated $1.5 billion project otherwise. The cost would be spread among all residential and commercial customers through a monthly fee on electric bills.

Del. Tom Hucker (D-Montgomery), who is sponsoring the bill, defended it as in line with the legislature's past efforts to encourage development of clean energy in the state.

"I keep hearing from opponents that this bill is impractical and that it's part of some kind of ideological environmental agenda," he said. "Let me say real clearly, I do not think this bill is exotic. I think it's consistent; it's completely in line with the steps we've taken year after year."

Del. Sally Y. Jameson (D-Charles County) suggested that she could support the plan. But she said that the possibility of it pushing the total cost of all clean energy surcharges on state residents' electric bills past $7 a month meant that lawmakers must consider all the costs together.

"Each time you put another little charge on our ratepayers, eventually you have to step back and see that they all add up. I can show you my bill; I can show you all the various charges," Jameson said. "Even for a good cause . . . ratepayers, they can only take so much."

O'Malley said that without offshore wind power, the state would probably not meet a goal he signed into law during his first term - to get 20 percent of its electricity from renewable sources by 2022.

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