A crucial element of Gov. Martin O'Malley's push to build wind turbines off Maryland's coast gets a hearing in Annapolis today (March 3), as the House Economic Matters Committee takes up an administration bill that would subsidize their construction by raising nearly every resident's electric bill, at least in the near term.
The administration has proposed legislation, HB1054, that would require utilities in the state to enter into long-term contracts with wind energy developers to buy the electricity the turbines would generate. Wind industry officials say such power purchase agreements are needed to securing the financing needed to go forward.
The bill has the backing of environmentalists eager to see the development of more clean, renewable energy in Maryland, and of unions anticipating the massive turbine projects will yield a bonanza of construction and even manufacturing jobs. But as The Washington Post points out in a story today, a key question for lawmakers is just how much electricity rates have to go up to underwrite this push to put Maryland in the vanguard of developing some of the nation's first offshore wind energy projects.
Producing electricity from wind energy is likely to be more expensive than power from conventional coal- or gas-burning plants at the start, advocates say, because of the high costs of building the turbines off shore and getting their power to land. But they argue that the renewable source will become relatively cheaper over time as the costs of extracting and burning (and offsetting the pollution from) fossil fuels goes up.
If the power deals inked in Maryland are anything like the one struck in neighboring Delaware for an offshore project pursued by NRG Bluewater Wind, legislative analysts say residents could be paying an extra $2 a month, or $24 a year, on their electric bills in 2016, with the surcharge anticipated to gradually decline to half that over the next 20 years.
But the Post story notes that the US Energy Information Administration recently projected the costs of electricity generated by conventional fossil-fuel power plants over the next 20 years actually would drop, at least partly as a result of an anticipated boost in natural gas production from vast reserves in Marcellus shale deposits underlying Appalachia, including western Maryland, and from elsewhere in the US. Based on the federal energy cost forecasts, legislative analysts note that the wind surcharge could be more like $3.61 a month, or $43.35 a year by 2016 and would still be $2 a month or more 20 years later.
Advocates would say even the higher cost projections are small price to pay for getting clean power that won't worsen climate change. But Maryland lawmakers are wary of raising their constituents' power bills after the uproar that ensued when electric deregulation sent rates skyrocketing several years ago. The question of what wind will cost, and who pays, could be key.
(Wind turbines off England, AFP/Getty images)