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Fact-check: Gov. Larry Hogan's push against $100M 'sunshine tax'

Is the cost of increasing renewable energy thresholds in Maryland a tax or fee?

An e-mail from the Larry Hogan for Governor campaign office to the governor's donors and supporters Monday urged them to support his veto of "a $100 million energy tax" -- a policy Hogan has dubbed the "sunshine tax."

But the program Hogan's veto last spring seeks to constrain does not impose a tax -- or even a fee -- on electricity ratepayers. And it's not clear how much it has or will increase utilities' costs to buy electricity.

The legislation the Republican governor rejected would have increased the amount of solar, wind and other renewable energy electricity companies are required to buy each year.

In 2017, renewables must make up 15.6 percent of Maryland's electricity supply, and 20 percent of it by 2022. The program was written into state law in 2004, and the 2016 legislation would have ramped up its goal to 25 percent renewable energy by 2020.

Utilities and other electricity suppliers spent $127 million to buy renewable energy in 2015, according to a report the Maryland Public Service Commission released this month.

If state law did not require them to buy it under threat of a penalty, it's not clear how much they would have spent for the same amount of electricity. Some of the energy likely would have come from cheaper but dirtier fossil fuel-based energy generation.

The costs are not charged to ratepayers in the form of a tax or fee, but are baked in to electricity costs. The vetoed legislation would have likely added somewhere between 48 cents and $1.45 to the average residential customer's monthly electricity bill, according to a state Department of Legislative Services analysis.

Predicting its cost going forward depends on the future prices of renewable energy credits -- certificates that utilities buy from renewable electricity generators to meet the energy program's goals. The credits' values have fluctuated but steadily risen over time.

Under the legislation, budget analysts expected the cost to range from $49 million to $196 million in 2020. 

Doug Mayer, a spokesman for Hogan, said he could not respond to questions about the e-mail because it came from Hogan's campaign office.

An e-mail to the Hogan campaign was not immediately returned.

But when asked about Hogan's statements calling the renewable energy program a "sunshine tax" and "wind tax," Mayer said the governor is fighting against policies that place a heavier burden on residents' pocketbooks.

"We think it's a tax," Mayer said. "If it comes out of people's pockets, most people consider it a tax."

The General Assembly is scheduled to take up a vote to possibly override Hogan's veto this week.

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