New bill for Maryland offshore

For the third consecutive year, Governor Martin O’Malley has introduced a bill to have ratepayers subsidise a proposed wind farm of up to 200MW in the Atlantic Ocean off the US state of Maryland. 

O’Malley this time claims there is sufficient support in the Senate, which twice blocked his previous legislation after approval by the lower house. Both chambers are controlled by his Democratic Party.

He says that 24 senators will co-sponsor the bill, double the number in 2012, a majority in the 47-seat Senate. 

The new bill is similar to the one last year. It creates a carve-out for offshore wind energy in Maryland’s renewable portfolio standard.

Enacted in 2004, and revised three times since O’Malley took office in January 2007, the mandate requires electric utilities to generate 20% of their retail sales from wind, solar and other clean sources by 2022. About 7.5% of Maryland’s power now comes from renewables.

Utilities would be required to purchase offshore renewable energy credits to help finance the project, whose cost O’Malley did not estimate at a press conference. 

He did not explain how the OREC programme would be created, although this likely would be the responsibility of Maryland’s Public Service Commission (PSC).

O’Malley last year suggested that Maryland emulate an OREC programme under development in New Jersey, where regulators must approve pricing for the credits by project developers before they can use them.

His legislation would give the PSC authority to veto any offshore wind project that would increase residential electric bills more than $1.50 per month. Commercial and industrial customers would see a rate hike up to 1.5%.

The project developer would assume any costs not covered by surcharges, which will remain in effect for 20 years, according to O’Malley.

Ratepayer surcharges could not be applied until after the wind farm is built and generating electricity. 

Developers must show that any project proposed will have a “net economic benefit” to the state by creating jobs, economic development and protecting public health.  The bill also contains $10m in funding to help small and minority businesses participate as project suppliers.

O’Malley cited a US Energy Department report that estimates a 200MW offshore wind farm would create almost 850 manufacturing and construction jobs during a five-year construction and development period, and an additional 160 supply, and operations and maintenance jobs.

He believes that additional projects, both in Maryland and in the region, would lead to a significant new sustainable industry for Maryland workers.

“In this competitive new economy, the states that win will be those that succeed in leveraging innovation into job creation and economic growth,” says O’Malley.

Even after the bill becomes law, Maryland will likely need partners including possibly neighboring Delaware to help launch an offshore wind industry in the Mid-Atlantic region, he notes. "I don't believe any one state can do this by itself," O’Malley says, “Hopefully, there will be other partners involved here.”

The US Interior Department has identified a 79,706 acre (322.5sq km) area 10 to 23 nautical miles (18.5-42.5km) from shore off Ocean City for wind energy development.

DOI last February announced that it would proceed with issuance of commercial leases but did not give a timetable for doing this.