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Maryland lawmakers propose higher renewable energy mandate

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Environmental groups and business interests will clash forces this Thursday, February 27, in Annapolis when their representatives and other members of the public testify on proposed legislation to increase Maryland’s renewable portfolio standards.

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Renewable portfolio standards obligate retail electric utilities to buy a defined portion of their electricity supply from generators who produce it from the sun, the wind and other renewable energy sources.

On Thursday, when the 1:00 pm hearing begins before the House Economic Matters Committee, a PJM Interconnection engineer in New Jersey will decide how much electricity PJM's regional transmission network needs to balance the complex wholesale market for electricity it operates in thirteen states, including Maryland, plus the District of Columbia.

A man in West Virginia stripping coal from a hilltop will work without any knowledge of the arguments before the Committee.

A paper mill in Pennsylvania will continue processing byproduct that qualifies as renewable energy even though it is not as clean as environmental groups would like.

Thousands of people in Maryland will turn on their computers and juice up their smart phones unknowing that in an Annapolis hearing room people will argue about what kind of electricity utilities in the state should buy.

And yet, as far away, and as remote and complex as it sounds, the debate in Annapolis this Thursday, as with so many others that occur between small handfuls of high-paid professionals and loyal bands of activists, will profoundly affect many peoples’ lives both now and in the years to come.

“Maryland has made important strides towards embracing clean energy but we need to do more. Doubling our renewable standards will improve our environment, our public health and be a model for the nation,” State Senator Paul Pinsky (D-22), sponsor of the Senate version of the bill, said in an e-mail.

But the soldiers who fight over the facts this Thursday will likely present vastly different pictures.

If the proposed bill becomes law, Maryland’s renewable portfolio standard will double, from 20% in 2022 to 40% in 2025. As expected, opposing forces disagree about the cost, health and economic impact of the proposed law.

Jonathan Lesser, President of Continental Economics, who plans to testify Thursday on behalf of a group of Maryland industrial businesses, predicted the bill will add $4.1 to $6.5 billion in energy costs to Maryland consumers and businesses by 2030 and cause the loss of thousands of Maryland jobs.

But those dire estimates are vastly worse than the fiscal analysis prepared by the State’s Department of Legislative Services. Relying on its own set of assumptions, the legislative policy office estimates that the bill will add $141.5 to $424.6 million in electricity costs by 2025 and beyond.

Some argue that the falling prices of wind power and the significant public-health-cost savings from renewable energy use also must be considered to truly assess the cost impacts.

“Any conversation about cost [of renewable energy] has to be linked with the cost of fossil fuel,” James McGarry, Chief Policy Analyst at the Chesapeake Climate Action Network, said. “We believe the ratepayer impact from the bill will be low.”

McGarry, in an e-mail, pointed to a published article in Environmental International, which found that "[f]ossil fuel usage for electricity generation in the U.S. results in the loss of hundreds of billions of dollars of economic value annually through premature mortality and other health endpoints, work days lost, and direct costs to the national health care system."

"Maryland is already paying more than any other state in the country for the air pollution impacts of fossil fuels," McGarry said.

There is no federal renewable portfolio standard but 29 states, including Maryland and Pennsylvania, plus the District of Columbia, have them. Eight additional states, including Virginia, have voluntary renewable energy targets.

If the proposed Maryland bill becomes law, utilities that sell electricity to Maryland customers will be required to buy 40% of their power from what are known as Tier I renewable sources – solar, wind, qualifying biomass, certain methane, geothermal, ocean, and small hydroelectric power –by 2025. At least 4% of that power will need to come from solar and an amount up to 2.5% from offshore wind energy.

Most people agree that renewable energy portfolio standards establish a demand for renewable energy, and this demand encourages the flow of capital to renewable industries. But the agreement pretty much stops there.

Thursday’s hearing begins a long legislative process in Annapolis, which may or may not result in the current proposal – House Bill 1149/Senate Bill 733 – becoming law.

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