April 4, 2010

Senate approves solar boost

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By Nick DiMarco
Nick@MarylandReporter.com

Editor’s note: Please click or download below for an audio version of this report.

A bill requiring Maryland electricity suppliers to more rapidly increase their solar energy production passed the Senate Friday, despite Republican objections that it would cost consumers over $800 million.

The chamber voted 31 to 15 to mandate utilities to use solar energy panels to help meet this goal. The bill will take affect next year, with the rate increasing incrementally until 2022. 

GOP senators contested the measure every step of the way. On Thursday, Republicans failed in five attempts to alter the bill and reduce its costs. 

But bill sponsor Sen. Robert Garagiola, D-Montgomery, insisted the push for solar power “in a worst case scenario” would only cost pennies a month to ratepayers. But opponents were concerned about the fees utilities would have to pay to the state if they don’t meet solar energy requirements. These could amount to $33 million in 2015 and those costs could be passed on to ratepayers.

“It’s going to lead to more clean renewable energy in the state of Maryland. All the talk of all the costs, I think was overblown,” Garagiola said. “The net effect is going to be positive and we’re going to see more solar jobs in Maryland as a result, as well.”

Under the bill, Maryland energy suppliers including Baltimore Gas and Electric, Pepco and the Southern Maryland Electric Cooperative are required to meet the higher percentage for the portion of their supply needs in renewable energy. The  standard increase proposed is 2 percent by 2022.

A provision in the bill stipulates that if the utilities can’t meet the goal, ratepayers would cover the shortfall. The bill increases the payments for utilities that miss their goals from 35 to 40 cents per kilowatt-hour until 2014.

Sen. Andy Harris, R-Baltimore-Harford, argued the approximate costs to ratepayers would total $890 million, because he didn’t believe utilities could meet the new standard. He, along with his Republican colleagues, called the bill a “hidden tax” on Marylanders.

“A lot of lip service has been paid to not raising taxes in an election year, but in fact, this is an under-the-radar, $1 billion energy tax increase, that the government is going to add to all of our ratepayers,” Harris said. “The numbers are pretty clear … This will raise energy bills.”

Democrats argued the benefits outweighed the costs. All told, the amount of energy will equal two traditional power plants, according to Garagiola.

“Once you make the initial investment, a lot of it becomes free,” said Sen. Paul Pinsky, D-Prince George’s, urging the body to vote for clean energy independence. 

There are no specific numbers related to costs of the solar energy panels — the most expensive facet of implementation — but Garagiola noted the costs of the panels have decreased significantly over the past two decades. He predicted the price of solar would become more cost-effective than coal or natural gas energy in coming years.

“We’re looking at the big picture but solar is clearly one component of that, and one component that we know will create jobs that we can’t outsource,” Garagiola said.

Sen. E.J. Pipkin, R-Upper Shore, argued that most of the solar components would actually be made in China.

One amendment, applying almost exclusively to the Southern Maryland Energy Cooperative, provides waivers to the percentage increase for energy cooperatives which have invested in other renewable energy sources. SMECo is working toward energy generating wind turbines.

A similar bill, also backed by Gov. Martin O’Malley, is awaiting action in the House Economic Matters Committee