Two plans for wind projects off Maryland's coast are headed to the state Public Service Commission for consideration.
The commission said it had opened its formal review of proposals from US Wind Inc., a subsidiary of Italian energy and construction giant Toto Holdings SpA, and Skipjack Offshore Wind LLC, a subsidiary of Deepwater Wind Holdings LLC.
Approval from the commission is necessary for either project to secure offshore renewable energy credits, one of several financial incentives established under Maryland's Offshore Wind Energy Act of 2013 to encourage wind power projects. The credits, a subsidy of up to $1.9 billion, would be paid by consumers, adding up to $1.50 a month to the average residential customer's electric bill.
To secure the credits, applicants must show that the economic, environmental and public health benefits of their projects outweigh the subsidy. The commission is working with independent consultant Levitan and Associates Inc. to evaluate the proposals.
US Wind, which has offices in Baltimore, plans to build a 750-megawatt wind project off the coast of Ocean City. The project calls for 187 turbines to be built across 80,000 acres in three stages. The first stage, creating 250 megawatts of wind power, could be complete by 2020. The entire project would be completed by 2022.
The project would provide enough energy to power 500,000 homes.
The wind farm's construction is expected to create hundreds of jobs and could help revive steel fabrication and welding in Maryland, said Paul Rich, director of project development for US Wind.
"We want to hire and invest and really bring this industry to Maryland," Rich said.
Deepwater's proposal calls for the 120-megawatt Skipjack Wind Farm to be built in the Atlantic Ocean more than 17 nautical miles northeast of Ocean City. With construction beginning in 2020, the project could be operational by 2022.
"We're bringing down the cost of American offshore wind energy in a big way," Deepwater Wind CEO Jeffrey Grybowski said in a statement. "Ratepayers in Maryland will benefit from energy that is both clean and affordable. The Skipjack Wind Farm is the right clean energy solution for Maryland, and we're ready to get to work."
Deepwater, based in Providence, R.I., is behind the five-turbine Block Island Wind Farm off the coast of Rhode Island. It is the nation's first and is expected to begin operating this winter. The company also is planning wind projects offshore of Massachusetts, New York and New Jersey.
Maryland's offshore wind program is intended to help meet a goal set by state lawmakers to produce 20 percent of the state's power from renewable sources by 2022.
The state's efforts are in line with a federal push for renewable energy. Over the past several years, the federal government has leased hundreds of thousands of acres off the East Coast to be developed for renewable energy, including two leases, totaling 80,000 acres, off the coast of Ocean City.
With a bid of $8.7 million, US Wind in 2014 won the auction for both leases.
Deepwater said in a statement that it had also secured a federal lease, subject to regulatory approval, but its location was not immediately clear. Deepwater could not be reached for comment Wednesday afternoon.
Despite enthusiasm among federal and state lawmakers, offshore wind projects have struggled to take off along the Atlantic coast, stalled by regulatory, political and financial challenges. There are also questions about how President-elect Donald Trump may approach renewable energy.
The commission is expected to decide on the proposals by May 17.