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No more corporate welfare for energy firms

No more corporate welfare for energy firms
Sunrise at EDF Renewables' field of wind turbines, which stand nearly 300 feet high, near Rio Vista, California, in 2012. (Bob Chamberlin / McClatchy-Tribune)

As authors of the report, “Unbundled: How Renewable Energy Credits Undermine Maryland’s Transition to Clean, Renewable Energy,” we wish to respond to an opinion piece by Bruce Burcat, “Md. clean energy critics spreading misinformation” (Aug. 5). Mr. Burcat states that our report “incorrectly claims that Maryland’s energy policy is causing the state to go backward on building a clean energy economy.”

We made no such claim. Rather, the report criticizes a mechanism in the state’s Renewable Portfolio Standard that allows utilities to rely on certain “unbundled” renewable energy credits (RECs) to meet the state’s renewable energy requirements. The report expressed our concern that the proposed Clean Energy Jobs Act would greatly expand the ability of utilities to use these unbundled credits to meet clean electricity goals. We expressly excluded from our report an analysis of in-state solar and offshore wind production. Why? Because the market dynamics and energy outcomes for these energy sources are different than the other energy sources Maryland defines as renewable.

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Instead, our report focused on the purchase by Maryland utilities of unbundled RECs from out-of-state energy sources like incineration, black liquor, biomass, on-shore wind and small hydro plants. So why do we oppose the use of unbundled RECs? Here’s why: unbundled RECs are no-strings attached subsidies from Maryland ratepayers to energy producers, often in faraway places. These subsidies allow Maryland utilities to claim credit for energy produced elsewhere while continuing to buy electricity generated from fossil fuels and nuclear power.

For example, our report found that in 2016 Maryland utilities used over 7 million unbundled RECs at a cost of over $88 million to meet their renewable energy requirements. This means utilities purchased no energy as part of these transactions and Maryland ratepayers got nothing in return for their investment. Even more alarming, the report found that much of the energy subsidized by Maryland ratepayers was as bad or worse for climate and health than burning fossil fuels. The report estimates that between 2008-2016, Maryland ratepayers spent about $84 million to buy about 10,348,141 unbundled renewable energy credits from Virginia, more than any other state. About 93 percent of these credits subsidized existing dirty energy sources like incineration, black liquor and the burning of wood waste.

Our report noted that Virginia does not provide similar subsidies to these energy sources (Why would it when Maryland seems more than willing to open up its pocketbook and ask for nothing in return?), and that its residents have lower utility rates than Maryland residents. Our solution to this problem is simple. The Maryland General Assembly should stand with Maryland ratepayers and against corporate welfare by ending the use of unbundled RECs. The report concludes that the state should also require Maryland utilities to “prioritize new clean, renewable energy delivered to their residents.”

Tim Whitehouse and Dr. Gina Angiola, Baltimore

The writers are, respectively, executive director and board member, Chesapeake Physicians for Social Responsibility.

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