Offshore Wind Farm Bill Details Questioned

ANNAPOLIS — Maryland Gov. Martin O’Malley’s push to pass legislation enabling the development of offshore wind energy off the coast of Ocean City remains on track this week, despite administration officials’ three-hour grilling in front of the Senate Finance Committee over the potential cost to ratepayers and the level of public investment in the potential project.

On Tuesday, O’Malley staffers testified on behalf of the Maryland Offshore Wind Energy Act of 2011, a plan that includes the development of a vast offshore wind turbine field roughly 10 miles off the coast of Ocean City, and while no one on the committee disputed the philosophical aspects of the plan, the governor’s staff did get grilled on the public investment in the private sector project. Also of concern for the Senate Finance Committee was the anticipated increase on the monthly bills of the ratepayers.

Much of the debate focused on the projected cost to the consumer once the offshore wind farm is up and running and there appears to be no agreement on what that number might be. For example, the state’s Department of Legislative Services projects an average monthly increase of $3.61, while the Maryland Public Service Commission revised its projects this week to a range from 92 cents to $3. The PSC had previously predicted an average monthly increase for ratepayers at around $1.44.

Some committee members also questioned the acceptable level of investment in taxpayer dollars into the largely private sector venture. However, O’Malley staffers pointed out there likely wouldn’t be private investment without some guarantees the energy the offshore wind farm generates has a potential buyer. For that reason, the governor’s bill plans to force public utilities to buy the power through guaranteed long-term contracts. Currently, eight private companies are vying to erect as many as 250 wind turbines off Ocean City, and the governor’s bill would give one or more of those companies a guaranteed buyer for the electricity they generate.

“We all should be so lucky to find a deal like this,” said Eastern Shore Senator E.J. Pipkin. “All the profits go to the people that develop it.”

Senator Jim Mathias, who represents Worcester County and Ocean City and also serves on the Senate Finance Committee, defended the legislation under attack by his colleagues.

Mathias said the committee’s line of questioning dealt with the nuts and bolts of its implementation and not the concepts of offshore wind.

“I think we’re beyond the philosophical side and we’re now talking about the operational issues,” he said. “The big issue on the table this week was the affordability. There is no doubt this comes with a price. Now, we’re trying to nail down what price is acceptable.”

Mathias said the long-term benefits of expanding the state’s renewable energy portfolio with an offshore wind project that could ultimately provide clean energy to nearly 80 percent of the homes on the Eastern Shore made some level of public investment acceptable.

“The bottom line is, there are difficult decisions we need to make today for tomorrow,” he said. “This is something that could benefit us for generations, but it’s going to come with some level of public commitment. We’re now debating the comfort level with that commitment.”

As a member of the Finance Committee, Mathias is in the middle of that debate.

“If and when it happens, those transmission lines are going to have to come ashore somewhere,” he said. “This is in my committee and this is in our front yard, so I’m making sure our county and local government has a seat at the table.”

One comment on “Offshore Wind Farm Bill Details Questioned

  1. This whole issue really puzzles me,since there is already a steady market for electricity. If you compare the costs related to wind turbine electricity vs that produced by other generators, it becomes even more confusing. For example, since the turbine sites will not need property for the storage of fuel and/or solid waste storage and will be leased from the government, the site costs will be much lower. Coupled with no fuel costs and no on-site operations and maintenance staff costs, one would think that the overall production cost of this electricity would be much lower than that from other sources. With it being so much cheaper, you would think that power distributors like BGE would be eager to buy all that is available. So, if these things make any kind of engineering or economic sense, why is it that it should be mandated that distributors enter into long term (potentially over-priced) fixed price contracts for this power before the turbines are even built?

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