More than one-third of the renewable electricity Marylanders buy comes from incinerating trash, wood and a thick sludge that is a byproduct of the paper-making industry — sources that send greenhouse gases and toxic pollutants into the air.
Yet the incineration plants net tens of millions of dollars through a state program intended to promote solar and wind projects.
Some environmentalists say that amounts to subsidizing pollution, and they want the state to redefine what energy sources it considers "renewable" as it works to shift dependence toward new, clean technologies.
Plants now selling the energy — proceeds totaled more than $100 million in 2014 — say cutting them out of the renewable energy market would threaten their viability and risk hundreds of jobs.
A General Assembly bill proposing to significantly restrict who can sell in a regional renewable-energy marketplace has stoked a conflict over what strategy is best for the state's air quality in the long run.
The debate is blurring typical divisions in Annapolis. Labor unions and local governments have joined Gov. Larry Hogan's administration, business and industry groups in pressing lawmakers to dismiss environmentalists' arguments.
The issue is a familiar one. For years, unions and the paper industry workers they represent have fought off similar efforts to stop facilities — including an Allegany County paper mill — from profiting off energy derived from a substance known as black liquor.
This year's attempt goes beyond black liquor.
"It's a pretty aggressive piece of legislation," said Del. Dereck Davis, a Democrat from Prince George's County and chairman of the House committee considering the bill.
"I know the black liquor issue is a really big issue for both labor and environmentalists, who usually are on the same side," Davis said. "Obviously the committee is going to have to weigh that."
The Senate is scheduled to consider the bill Tuesday, and a House committee could vote on it this week.
The debate comes as the General Assembly is considering two other major proposals to guide the state's electricity supply and air quality.
One looks to accelerate the state's uptake of solar power, requiring utilities and energy suppliers to get a quarter of their power supply from renewable sources by 2020 — 5 percentage points more and two years earlier than stipulated by current law.
Another measure would revise a plan to cut greenhouse gas emissions to 25 percent below 2006 levels by 2020, instead targeting 40 percent reductions by 2030.
For a decade, Maryland has held electricity suppliers to what is known as the state's renewable portfolio standard, benchmarks guiding how much of the energy they offer consumers comes from alternative modes of generation.
To satisfy the requirements, utilities such as BGE and other energy suppliers buy credits from renewable-power generators such as wind farms and hydroelectric plants — and also from waste incinerators, paper mills and landfills that collect methane gas and burn it for energy.
Incinerator operators and plants such as the paper mills say they are part of the solution to the state's energy and environmental challenges. They note that they help keep waste out of landfills and relieve coal- and gas-fired power stations.
Sale of the renewable-energy credits represents a large and growing revenue stream for the plants. The average price of a single credit, which represents one megawatt of electricity use for an hour, was less than $1 in 2010 but reached $11.64 in 2014.
Total proceeds from sales of the credits rose from $2 million in 2008 to nearly $104 million in 2014, according to the Maryland Public Service Commission.
Environmental advocates argue that the operations that use chicken waste, trash or black liquor as fuel fall outside the intent of the state's renewable-energy incentives.
Proceeds from the sale of the credits were intended to spur investment in new, clean technologies struggling to gain adoption, said David Smedick, leader of the Sierra Club's "Beyond Coal" campaign in Maryland.
Instead, he said, much of the money is "promoting these dirty resources from decades ago."
Ten years ago, wind and solar power hardly registered in the state's renewable energy supply, according to an annual PSC report. Hydroelectric power made up about half of it, with the other half coming from electricity generated from burning trash, black liquor, wood and gas siphoned from landfills.
By 2014, the most recent year for which data is available, wind power grew to account for 27 percent of the renewable portfolio, according to the PSC. But other sources still proliferate — black liquor was the largest renewable source, at 29 percent, and trash makes up 14 percent.
Those percentages are based on a PSC accounting that does not include solar generation or large hydroelectric dams in the same category as other renewable sources.
The renewable energy does not have to be generated inside Maryland to help companies meet the state standards. Three-fourths of the renewable supply is generated outside the state.
Under the bill in Annapolis, only solar, wind, hydroelectric and geothermal energy would be able to sell the credits.
Opponents say that would be a significant hardship for many facilities.
"They're not big moneymakers," Chris Skaggs, executive director of the Northeast Maryland Waste Disposal Authority, said of landfill-gas-to-energy facilities the organization has developed for Anne Arundel, Howard and Montgomery county governments.
Skaggs said without the renewable credit income, "there is a question of whether they're economically viable in today's energy marketplace."
Representatives for a paper mill in the Western Maryland community of Luke, owned by Verso Corp., say the sale of energy generated by black liquor help keep the more than century-old plant afloat. It employs 800 people in a region long hit hard by industrial decline.
"They're under pressure from foreign competition and they're surviving," Bill Pitcher, a lawyer for the mill, told state delegates at a March 3 hearing. Representatives from the United Steelworkers, AFL-CIO and International Brotherhood of Electrical Workers also spoke out on the bill's potential impact to the mill.
In addition, the Maryland Energy Administration says millions of dollars in state investment in chicken-waste-to-energy generation projects would be at risk if those facilities no longer qualify for credits.