Maryland utility regulators this week approved subsidies for two offshore wind projects off the coast of Ocean City that would be largest of their kind in the country, a decision that could make the state a leader in the industry.
The move was a welcome surprise for renewable-energy advocates, who had expected the Maryland Public Service Commission to pick only one of the competing proposals to receive the subsidies, which are funded through increases in residential and commercial utility bills. But the approvals renewed concerns on the Eastern Shore about property values and the obstruction of seaside views if the towering structures are ever completed.
The projects still need to clear several hurdles, including a federal permitting process that is expected to begin around December. If the plans are approved, many of the turbines could be operational by 2020.
David Smedick, a policy expert with the Sierra Club, called the decision on Thursday a “monumental win for the economy and the environment in Maryland.” It allows the companies to sell renewable-energy credits at a rate of $132 for each megawatt hour they produce, helping cover the $2.1 billion estimated cost of building the two projects.
The subsidies to U.S. Wind and Skipjack Offshore Energy provide a major incentive for the companies to move forward with proposals to build a combined 77 turbinesbetween 12 and 21 nautical miles from the coast. They are expected to cost residential ratepayers less than $1.40 per month while increasing the electricity bills of commercial and industrial customers by less than 1.4 percent a year, according to the commission.
The only other offshore wind project in the country, located off the coast of Rhode Island, has five turbines.
The commission attached dozens of conditions to its approval, including requiring the companies to create nearly 5,000 jobs related directly to development of the projects and invest $76 million in a Maryland steel plant, $39.6 million toward port upgrades at a shipyard near Baltimore and $12 million to the state’s Offshore Wind Business Development Fund.
“We have taken great care to ensure that this decision maximizes economic and environmental benefits to the state while minimizing costs to Maryland ratepayers,” said commission chair W. Kevin Hughes.
Michael James, who chairs Ocean City’s economic-development committee, said business owners and residents will push to ensure that the turbines are as small and as far away from the shoreline as possible.
“Maryland has limited coastline,” he said. “Why would we want to have risk of deteriorating the most valuable and income-producing real estate in Worcester County?”
Ocean City Mayor Rick Meehan said the town’s elected officials will “continue to express our concerns and position” as the permitting process continues at the federal level.
U.S. Wind also has a lease for an area off the coast of New Jersey that is three times the size of its holding near Maryland, but New Jersey is further behind in the regulatory process.
Paul Rich, director of project development for U.S. Wind, said the commission’s decision will help draw manufacturers to the state and make it the primary producer of materials for others that embrace offshore wind.
“It’s going to cement Maryland as the epicenter of the offshore wind industry for decades to come,” he said.
The commission said the proposed offshore wind projects in Maryland would reduce carbon dioxide emissions by 19,000 tons a year for two decades, helping the state reach its goal of reducing carbon emissions by 40 percent by 2030.
The Chesapeake Climate Action Network estimates that the reduction is equal to taking 3,600 cars off the road each year. The group said the electricity output from the turbines could power more than 114,000 homes per year.