Legislators from both parties grilled Maryland Gov. Martin O’Malley (D) in separate House and Senate hearings about the governor’s plan to give taxpayer dollars to offshore wind power developers and force consumers to purchase the higher-priced electricity. The hearings indicated legislators are unlikely to support subsidies and purchasing mandates for the expensive energy source.
Dissent from Own Party
The governor’s plan would force state utility companies to sign contracts to purchase wind-driven energy produced on the Atlantic Outer Continental Shelf during the next 25 years. Although O’Malley’s plan calls for only 120 wind turbines producing no more than 3 percent of the state’s electricity, the Maryland Public Service Commission reports household electric bills could increase as much as $8.70 per month under the plan, with businesses facing even higher costs.
In the hearings, House Majority Leader Kumar Barve (D-Montgomery) said he supports incentives for offshore wind power but his constituents have raised concerns about the costs involved. Sen. Catherine Pugh (D-Baltimore City) said ratepayers should not have to pay for wind power subsidies, and her ratepayers are “screaming and yelling” about their already steep electricity bills.
‘Isn’t the Best Way’
“Other than paving one of Maryland’s counties with photovoltaic panels, offshore wind is the single most expensive way for the state to meet its energy and environmental goals,” said Jay Hancock, a business columnist for The Baltimore Sun who has tracked the issue. “The state needs to work on replacing coal-fired generation and reducing carbon emissions, but this isn’t the best way to do it.”
The O’Malley administration claims the mandate may end up costing the average Maryland household less than $8.70 per month, but such claims assume conventional electricity prices will rise significantly in the near future. With new domestic shale gas discoveries and improvement of natural gas production technologies, retail electricity prices have been falling during the past year, and the U.S. Department of Energy forecasts stable natural gas and electricity prices for at least the next few decades.
“Let’s go to the data,” said economist Steven Hayward, a scholar with the American Enterprise Institute. “Wind power is the second most expensive form of electricity after solar-thermal power.”
Hayward said the governor’s plan reeks of “crony capitalism,” as media reports have documented a years-long friendship and professional working relationship between O’Malley and a major beneficiary of his wind energy plan.
“The Washington Post reports the chief beneficiary of O’Malley’s wind power development plan will be the company run by O’Malley’s former chief of staff and childhood friend, Michael Enright,” said Hayward.
Cheryl K. Chumley ([email protected]) writes from northern Virginia.