The Maryland Senate reversed course yesterday on a key piece of Gov. Martin O'Malley's plan for reducing the state's energy consumption, giving it preliminary approval after reaching a compromise that directed more money toward financial help for lower-income families' electric bills.
The legislation had failed Tuesday as lawmakers and the administration sought disparate ways to spend a new pool of money from a greenhouse-gas reduction initiative. Some lawmakers wanted to spend more on direct rate rebates to consumers, while O'Malley and other lawmakers wanted to dedicate a bigger portion of the proceeds to programs designed to cut energy use, which they contend would save consumers more over the long run.
The state anticipates raising about $140 million a year or more by requiring utilities to buy and sell "allowances" for emissions from fossil-fuel plants that can then be traded through auctions starting in September. The cap-and-trade system with neighboring states is intended to help curb global warming.
After taking a procedural vote to reconsider the bill that had failed, the Senate voted to amend the bill to reduce the rate relief and direct more money to the Electric Universal Service Program, which provides assistance to the poor. The amendment also dictates that half of the auction proceeds be dedicated to energy-efficiency and conservation programs, with the rest going to renewable energy initiatives and other projects.
Meanwhile, the House of Delegates gave preliminary approval to its version of the bill yesterday, setting out a different formula for spending the auction proceeds. But Del. Dereck E. Davis, chairman of the Economic Matters Committee that considered the measure, said he thought the two chambers could reconcile their differences. They would have to do so before the session ends Monday.
"We need to hurry up and get this done," said Davis, a Prince George's County Democrat. "But I don't think we're that far off."
Under the House bill, the formula roughly follows the Senate's version. But if the auctions raise more than $140 million a year, that chamber would dedicate the balance to rate relief.
Sen. E.J. Pipkin, an Eastern Shore Republican, argued that ratepayers deserve a bigger break, especially as they are struggling with higher prices for electricity and a host of other consumer goods. He called the compromise amendment a victory for bureaucrats at the Maryland Energy Administration, which would run the efficiency and conservation programs.
"All I've ever wanted was a fair shake for the ratepayers," said Pipkin, the only senator to vote against the amendment. "Utility bills of the average person are too high. This is a tremendous missed opportunity."
But Sen. Catherine E. Pugh, a Baltimore Democrat, said a package of bills proposed by O'Malley, as well as a settlement recently reached between the state and Constellation Energy Group, would not only provide immediate rebates but also long-term solutions to the state's energy crisis, which state officials warn could lead to rolling blackouts by 2011.
"We will be able to go home and talk about rate relief," Pugh said. "This is not just about now. This is about the future."
Under the Constellation settlement, which must be approved by the General Assembly, BGE utility customers are expected to get a one-time $170 rebate later this year. Constellation is the parent company of BGE.
Sen. Joan Carter Conway, a Baltimore Democrat and chairwoman of the Education, Health and Environmental Affairs Committee, said ongoing rebates for all residents funded by auction proceeds wouldn't be significant. Under the final version of the bill, those rebates amount to roughly $1 a month. Using the entire $140 million for rebates would reduce customer bills by about $5 a month.
Other administration bills moving through the legislature would require power companies to buy more renewable energy and would establish the governor's goal for reducing energy consumption in the state 15 percent by 2015 while requiring utilities to offer consumers financial incentives to conserve.