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Published on March 31st, 2012 | by Len Lazarick

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House approves offshore wind bill 88-47, administration accused of coercion

By Daniel Menefee
Dan@MarylandReporter.com

The House passed the administration’s offshore wind power bill Friday amid accusations Gov. Martin O’Malley secured votes on the House Economic Matters Committee with disparity grants to committee members’ districts.

“Those of you who have been here longer than two weeks know there’s a lot of complicated pressures that go into making a bill pass or fail,” said House Minority Leader Anthony O’Donnell. “Sometimes it takes a little nudge, sometimes it takes a carrot, and sometimes it takes a stick.”

Del. Dereck Davis

Del. Dereck Davis

The disparity grant program in Maryland provides subsidies to jurisdictions with income tax receipts that fall below 75% of the state household average. Sources close to the Environmental and Economic Matters Committees said the administration leveraged grant money for favorable votes on the wind bill.

O’Donnell made strong inferences on the House floor that the administration used the “vast tools in the budget process” to sway committee members to move the bill to a full vote in the House.

The administration wants a developer to place 40 wind turbines 10 miles off the coast of Ocean City by 2017 to help the state meet its renewable energy portfolio of 20% by 2022.

“I’m not saying that happened here,” O’Donnell said. “But we all know this is part of the process.”

A lawmaker who asked to remain anonymous said disparity grants “can be used as leverage but usually for other budget items.”

Other politicos close to the process said there were “rumblings” about the administration “flexing its financial muscle on the Economic Matters Committee…there was some coercion.”

Del. Dereck Davis, D-Prince George’s, chair of the Economic Matters Committee responded to the accusations of “pressure” from the administration.

“You all know me,” Davis said on the House floor. “Nobody pressures me into a darn thing.”

Del. Brian McHale, D-Baltimore City, also objected to O’Donnell’s accusations and insisted it was the House Economic Matters Committee that applied pressure on the administration to remove any risk to consumers in the bill.

The wind farm bill failed last year because the proposed $9 monthly surcharge to households created sticker shock among lawmakers who were reluctant to raise electric rates in a recessionary environment. Last year’s bill also didn’t bode well with utility companies that would have been required to buy the wind power.

This year’s bill would cap rates at $1.50 per 1000 kilowatt-hours for households and businesses would pay 1.5% of total consumption. The purchase mandate to power companies was also removed in this year’s bill.

O’Donnell also took issue with a provision that requires the use of union labor for the project.

“Those who are not unionized will not be able to compete for this work,” O’Donnell said. “It’s anti-competitive and it will drive up costs.”

Davis responded that the project was “not strictly the domain of organized labor” and that non-union labor could also participate.

Some lawmakers say offshore wind is too expensive

Other Republican lawmakers ranted on a troubled future for offshore wind, citing problems in other countries that have used offshore wind since the 1990s.

Del. Patrick McDonough, R-Harford, said British citizens were in “rebellion” because offshore wind power has spiked energy bills. He also said experts in the economics of offshore wind power were walking away from similar projects because federal incentives were no longer available to defray the high costs of production.

He said that Spain’s largest wind turbine producer recently cut its production in half because of falling demand.

The cost to produce offshore wind power is 24 cents a kilowatt — compared to nuclear, coal, and gas, which average 11 cents to produce.

McDonough said he had serious doubts the $1.5 billion estimate to build the facility was realistic. He pointed to cost overruns to build the Intercounty Connector between Montgomery and Prince George’s counties and the I-95 redevelopment.

McDonough believes any cost overruns would likely come back on ratepayers and said the $1.50 monthly charge to households was a “phony baloney figure.”

Del. Ben Kramer, D-Montgomery, who opposed the project last year, said this year’s bill was drastically different and removed all the risks to households in development of the proposed wind farm.

“We have a very different bill this year,” Kramer said, looking towards McDonough. “The bill now puts the risk only on the developer and the ratepayer will not pay a nickel until the facility is built, operating, and producing electricity, and we will not be assuming the risks of a failed offshore wind project.”

The bill passed by a vote of 88-47 with only five Democrats voting against the measure.

Supporters in Annapolis before the vote

Hucker on wind power

Del. Tom Hucker talks about the benefits of wind power at a press conference held by Environment Maryland in advance of Friday's House vote on the bill.

Supporters of offshore wind power held a press conference in Lawyers Mall in Annapolis in advance of  the House vote.

“Maryland needs offshore wind power,” said Environment Maryland Campaign Director Tommy Landers, who released a report on the benefits of offshore wind in advance of the vote.

He said the benefits of offshore wind would be felt throughout the entire state in maintaining agricultural activity on the Eastern Shore and preserving forest lands in Western Maryland.

“Every region in Maryland stands to benefit,” he said.

Del. Tom Hucker, D-Montgomery, said the Republican opponents of the bill were running out of arguments to stop the bill, which would put 40 wind turbines 10 miles off the coast of Ocean City, Maryland.  He said opponents were “entertaining and inconsistent” in their opposition to the subsidizing the offshore wind with ratepayer subsidies, when Maryland has subsidized the coal and nuclear energy “for decades.”

Hucker said the $1.50 per 1000 Kilowatt-hour surcharge in the bill provides ratepayer protections that were not available when Calvert Cliffs nuclear plant and the major coal plants came on-line.

“This in fact the first time the legislature has weighed in and established ratepayer protections to make sure consumers get a great deal from this new energy source,” Hucker said.

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  • Dale McNamee

    I believe that all of those 88 who voted for this boondoggle to benefit the ” intermittant energy industry ” 9 a new name for ‘renewable energy ), should be made to rely on it alone, along with the environmentalcases,earth worshippers,etc.

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  • Dale McNamee

    Also, if wind power is so great, why did farmers stop using windmills on their farms ?

    • Energuy

      Just an FYI, Dale, farmers stopped using windmills (to draw water from wells, not run equipment), because we finally got ELECTRICITY, generated largely by coal fired plants!

      • Dale McNamee

         It makes the case for coal & gas fired power plants and destroys wind power doesn’t it ?

        • Junkmail4gra

          What separates modern societies from 3rd world countries is the plentiful supply of CHEAP energy available 24/7.  Wind and solar by definition are not reliable and certainly not cheap and require conventional sources to cover for when there is little wind and evening through dawn on a sunny days and all day on overcast days.  I wish the people who supported  the democratic party’s energy policy would be billed directly instead of burdening all tax payers.

          • Dale McNamee

             I agree…There should be the discussion of the yield of BTU’s of coal, natural gas, and nuclear. These fuel sources are “energy dense” versus “energy diffuse” wind and solar…Existing fossil fuel plants have a smaller “footprint” than the acres needed for solar and wind… Anyone with a functioning brain would know that, except for politicians, environ-mental cases, and the over-educated “betters”…

            You also wrote : ” I wish the people who supported  the democratic party’s energy policy
            would be billed directly instead of burdening all tax payers.”
             
            It should happen, but won’t, not with this electorate that keeps on voting these morons in…

          • abby_adams

            There is currently a way for supporters of windmills to put up or shut up. Change electric suppliers that offer wind generated power to the electric mix. Of course feeling superior isn’t cheap so I seriously doubt that the supporters of this bill will walk the walk. Those voting yea should be MANDATED to purchase this renewable as an example to the rest of us schmucks.

          • Dale McNamee

             Abby,

              I agree with you that those who voted “Yea” being MANDATED to purchase this “intermittent power” supply.

             This should go for the “environ-mentalcases”, cronies, etc., and any registered voter who approves of this mess…

             And they should be MANDATED to bear the costs of the “back up” infrastructure as well…

  • Junkmail4gra

    Why should I pay for this?  If it is that great why aren’t commercial interest picking up the whole tab?

    • Dale McNamee

       Because it isn’t that great ! Business investors are too smart to invest in such schemes and waste precious capital.
      Government is dumb enough to believe in the same and the taxpayers have no say as to how the money is “invested”…

      Then, there’s the issue of re-electing the same morons to office time and time again…

      • joe

        None of the morons are elected by the people. This is all a symptom of the people having no representation. All the political puppets are bought. Green energy—-All the better to UN Agenda 21 you to death my dear.

  • JGwen

    So in the end the General Assembly proponents (on behalf of the Governor’s aspirations) would have Maryland’s already suffering hard-working tax, ratepaying residents who would use electric energy … at a minimum pay:

        1. Rate Increases at $1.50 a month for electricity an average household for 20 years (assuming the public service commission doesn’t authorize additional increases in the future)

        2. 1.5 percent for commercial properties (and government properties?). A Cost which will of necessity be Passed Along to renters and each businesses customers.

        3. An unreported amount for Standby Backup Energies at the ready to handle the load when the “Off Shore Wind Farm” experiences periods without wind, periods of light winds, periods of winds too heavy for safe operations, periods when it is too hot or too cold to operate and/or periods to service the turbines.

        4. An unreported amount for Electricity Transmission and Switching Costs.

        5. An unreported amount of Federal Taxation to Provide Moneys for federal tax treatments, grants and other Subsidies.

        This on top of the reprehensible new and additional taxations to address the Billion dollar Shortfall on Maryland’s existing budget and the Billion plus in New Spending the General Assembly reportedly is generating for going forward.

        In the end, the little guy WILL end up with the bill while holding An Empty Bag….

    • Dale McNamee

       JGwen,

       Add “hurricanes, nor’easters, and tropical storms” to # 3.

      Great post !

  • Whcampbell

    Although I am a proponent of wind turbines for electrical power generation, I am not a supporter of this misguided bill.  This is an economicaly flawed approach that will be a windfall for O’Malley’s cronies, and the union labor that will construct them under a Project Labor Agreement (PLA).  This is atextbook case of “Crony Capitalism”.  The State funds these turbines with taxpayer money for higher than competitive market prices, the companies and unions contribute to Democrat politicians.  If we could only get energy out of this corrupt political “perpetual motion machine”, we would become energy independent.  Even a $1.50 per month for each electricity rate payer equals several hundred million dollars over 20 years.  There is no guaranty that e won’t have to pump in more money if these turbines get infinancial trouble, and there is agood chance of that.  As long as Maryland voters act like sheep our self serving politicians will continue to shear them.  It is long past time to vote the Democrats out of office!   

  • abby_adams

    If this bill was SO wonderful, why the quid pro quo for votes? You don’t have to be an economist, engineer or a rocket scientist to know that if private industry thought it was such a great $$ deal there wouldn’t be a subsidy to sweeten the pot. It benefits O’Malley cronies. Delaware shot down the windmill folly, but not the Dem legislators in Annapolis. Gotta give the lame duck Governor something to crow about while he makes the rounds on MSM while ignoring the pleas of taxpayers to stop the stupid spending & revenue schemes. We’ve had enough!

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