Lawmakers override Hogan’s renewable energy veto

Source: By JOSH BOLLINGER, The Star Democrat • Posted: Friday, February 3, 2017

EASTON — The Maryland legislature overrode Gov. Larry Hogan’s veto of a renewable energy-related bill from last session, a measure Hogan has dubbed the “sunshine tax.”

The bill raises Maryland’s Renewable Portfolio Standard goal that electricity suppliers reach a level of 25 percent renewable energy by 2020, from 20 percent by 2022.

Hogan vetoed the bill last May. The House of Delegates voted 88-51 to restore the bill on Tuesday, Jan. 31, and the Senate on Thursday, Feb. 2, voted 32-13 for the override.

Supporters say the goal increase will create incentives for about 1,300 megawatts of new clean energy, like solar and wind power, in Maryland, while creating about 1,000 jobs through 2020.

But opponents of the bill, including Hogan who has vowed to reject any raises to fees and taxes on Marylanders, have argued that the goal increase will impose an additional $49 to $196 million onto Maryland ratepayers’ energy bills. According to the Department of Legislative Services, the increase could add an extra $0.48 to $1.45 more per month to customers’ electricity bills.

“Proponents of the (Renewable Portfolio Standard) contend that because the costs are ‘baked-in’ to the electricity charges and there is no specific line-item on the customer’s utility bill, that this is not a tax or fee,” wrote Senate Minority Whip Steve Hershey, R-36-Upper Shore. “Opponents counter that any government mandated program that allows a specific industry to pass through the compliance costs of that program on to its customers is quite simply a tax.”

In an email sent to constituents last week, Hershey wrote that electricity suppliers must acquire an amount of renewable energy credits based on a proportionate share of its total electricity supply.

Purchasing the credits is known as the cost of compliance of the Renewable Portfolio Standard, which Hershey wrote are passed on to every ratepayer in the form of higher electricity costs.

“If an increase to the (Renewable Portfolio Standard) was certain to benefit Maryland-based renewable energy generators, it at least could be defensible. But recent experience shows this is far from certain,” Hershey wrote. “In 2015, renewable energy generating facilities located in 15 different states participated in Maryland’s (Renewable Portfolio Standard).”

Hershey wrote that in 2015, 88.7 percent of tier one, non-solar renewable energy credits used to comply with the state’s 2015 Renewable Portfolio Standard goal were purchased from out-of-state facilities. Hershey argues that Maryland ratepayers’ money was going out of state to subsidize the state’s Renewable Portfolio Standard.

“This is not to say we are against renewable energy goals. Governor Hogan has committed to growing all sectors of Maryland’s economy, including clean energy,” Hershey wrote. “There is certainly an economic benefit to growing Maryland’s renewable energy industry but until we relax government provided subsidies, there will also be corresponding cost which all citizens will bear.

“The unnecessary increase and acceleration in the (Renewable Portfolio Standard) goals further increase subsidies that will end up in the pockets of out-of-state renewable energy generators; this is enough reason to support the governor’s veto.”

Supporters of the bill argue, however, that the legislation to accelerate the state’s transition to clean energy is necessary in the face of climate change and federal environmental policies under a President Donald Trump administration.

“While President Trump appoints the CEO of Exxon to obstruct global climate efforts, states like Maryland will fight back here at home with jobs, cleaner air and truly responsive government,” said Mike Tidwell, director of the Chesapeake Climate Action Network, in a statement released following the Senate vote to override Hogan’s veto.

Supporters said the bill could reduce greenhouse gas emissions by more than 2.7 million metric tons per year, which is the carbon equivalent of taking taking 563,000 passenger vehicles off the road each year, according to a joint press release from the Chesapeake Climate Action Network and the Maryland Environmental Health Network.

“Today, the General Assembly sent a clear message that we want our state to be a leader in developing clean energy jobs, promoting better air quality for our communities, and securing energy independence for our children’s future,” said Sen. Thomas “Mac” Middleton, chairman of the Senate Finance Committee.