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O’Malley wind bill is sent for summer study

ANNAPOLIS — Legislation designed to spur development of an offshore wind energy industry in Maryland will be relegated to summer study, legislative leaders said Thursday evening.

Sen. Thomas M. “Mac” Middleton and Del. Dereck E. Davis, who lead the committees that handle energy policy, said their committees never grew comfortable enough with the bill. Gov. Martin O’Malley’s top energy proposal would have meant higher energy costs for consumers without a guarantee that Maryland would see the payoff, lawmakers said.

“When you look at the issue and how much time we’ve spent on it, we’ve only begun to scratch the surface,” said Middleton, D-Charles. Middleton’s Senate Finance Committee has held regular work sessions to explore the issue.

“My hope is and my intention is over the interim to give this bill the attention that it deserves,” Middleton said.

O’Malley’s spokesman, Shaun Adamec, said it became apparent Wednesday night there “probably wasn’t enough time to consider all the implications of a program this big and this complex.”

“It essentially amounts to the creation of a multi-billion-dollar industry for the state, and one that involves new technologies,” Adamec said. “The governor is continuing his effort to make Maryland a leader in this industry, and will bring the bill up next year.”

The bills, HB 1054 and SB 861, would have required the state’s electric utilities to buy 400 megawatts to 600 megawatts of generating capacity from offshore wind turbines for at least 25 years.

That, the governor hoped, would have created a market for wind power to lure developers to 207 square miles off of Ocean City designated for wind farm development by the federal government. The state expects to see the first turbines spinning there in 2016.

Building and operating a wind farm to meet the governor’s goal would create 2,000 construction and manufacturing jobs and 400 permanent jobs, the administration estimated.

Each offshore wind turbine generates 3.5 megawatts and costs $5 million to $7 million, according to the Offshore Wind Development Coalition, a lobbying group supported by seven wind power developers. To hit 600 megawatts, developers would need 171 turbines, with a price tag of between $855 million and $1.2 billion.

Those costs would have been shouldered by electric customers in the state. Estimates ranged from as low as $1.50 to as high as $8 a month for the average residential customers, but those projections from the Public Service Commission were later revised down. Legislative analysts predicted the proposal would make households pay $3.61 more per month.

To address those worries, the administration proposed to cap cost increases for consumers at an average of $2 for residential customers for the first year of wind generation. O’Malley’s team later expanded the amendment to cover the life of the 25-year contracts.

But there still was no guarantee that the money shelled out by Marylanders would actually bring jobs to the state. Federal laws precluded the administration from limiting the power purchase agreements to a wind farm in Maryland waters, prompting concern among lawmakers that construction and manufacturing would happen in Virginia, Delaware or even North Carolina.

O’Malley pressed hard for the bill, testifying in person and deploying his top lobbyist and energy advisor to work lawmakers on key committees. Still, Davis and Middleton said it was a tough sell.

“If we had taken this up at the beginning of the session, I still don’t think we would have had enough time,” Middleton said.

Lawmakers will be back in Annapolis this fall to redraw congressional districts following the 2010 census. But Davis, chairman of the House Economic Matters Committee, said wind won’t be an issue until next year.

“I’m looking at the 2012 session,” Davis said.