Anxious about soaring electricity costs, a
Senate committee voted to give households a break on monthly bills by using
money that had been set aside by Gov. Martin O'Malley for energy efficiency and
conservation.
The proposal would provide a credit estimated at $5 a month to help consumers
cope with double-digit increases in electricity rates. O'Malley, a Democrat,
has pledged to address rising rates and Maryland's
energy crunch, but lawmakers said yesterday that he hasn't done enough to help
consumers.
"We've promised them rate relief, but we've given them no relief,"
said Sen. E.J. Pipkin, an Eastern Shore Republican who proposed the rate
credits.
The Senate Finance Committee approved the plan as part of the O'Malley
administration bill that creates the Strategic Energy Investment Fund, which
would pay for conservation, renewable energy programs and climate change
research. It would be funded in part by the state's cap-and-trade system
intended to reduce greenhouse gases, established through a multistate agreement
that O'Malley signed in 2007. By some estimates, that system could generate
$140 million annually.
But environmentalists objected to the proposal, saying the money should go
to help consumers lower energy consumption - and their bills - over the long
term through rebates for energy efficient appliances, home weatherization and
other measures. Brad Heavner, state director for Environment Maryland, called
the proposal a "short-term political payoff that cheats consumers."
Johanna Neumann, state director of the Maryland Public Interest Research Group
said the proposal shows that lawmakers are "out of touch with
consumers" and noted that studies have shown that every dollar invested in
energy efficiency results in $4 in savings.
"You can't even go to the movies for that amount of money," she said
of the proposed credit. "And people's bills have gone up hundreds of
dollars."
The proposal faces some resistance in the House of Delegates, and senators
could still amend the legislation before sending it to the full Senate for a
vote.
Del. Dereck E. Davis, chairman of the Economic Matters
Committee, said his panel would consider ratepayer relief but that he would
like to focus on bolstering a program that helps low-income residents pay their
bills, especially as an economic downturn pinches more of their household
budgets. The Senate panel would direct some money to that program.
Davis said any
relief would have to be "meaningful" and that conservation and
efficiency programs should be funded. "We have to redo our whole way of
living as it relates to electricity," he said. "Things aren't like
they used to be. We don't have an unlimited supply of electricity."
Malcolm D. Woolf, director of the Maryland Energy Administration, said that not
funding conservation and efficiency programs would be "a missed
opportunity." He said those programs would save consumers more over time
than the monthly credits. By comparison, he said, residents in California, where such
programs have been in place for years, now use 42 percent less energy per
capita than Marylanders.
The amount of any consumer credit in Maryland
would depend on the success of the regional greenhouse gas initiative, which
requires utilities to buy "allowances" for emissions from fossil-fuel
plants. Estimates for the money raised by auctioning those emission rights have
ranged from $80 million to $260 million a year. The first auction is scheduled
for September.
The General Assembly is considering a number of administration bills this year
aimed at increasing reliance on conservation as well as on renewable energy in
an effort to stave off rolling blackouts, which state officials predict could
come by 2011 without some intervention.
Another bill approved yesterday by the Senate Finance Committee would more than
double, to 20 percent by 2022, the amount of renewable energy that Maryland utilities must
purchase for sale to their customers. The panel delayed implementation of the
bill by two years.
Money raised from compliance fees through that bill would be directed to the
same energy investment as the emission auction proceeds.
The panel also approved legislation that aims to reduce energy consumption in
the state 15 percent by 2015 by requiring utilities to offer consumers
financial incentives to conserve. When the state deregulated the energy
industry in 1999, programs that reduced consumer demand or promoted
conservation became less prevalent because companies have less incentive to
reduce consumption.
Lawmakers also have introduced a bill to limit certain costs that are passed on
to BGE's customers, potentially saving them more than $1.4 billion in the
coming decades. It would grant the Public Service Commission more oversight of
those funds, which are collected to pay for the eventual dismantling of the
Calvert Cliffs nuclear plant. That bill has not yet received a committee vote.
Sen. Thomas M. Middleton, chairman of the Finance
Committee, said lawmakers are holding off on that legislation while
negotiations are under way between the Maryland
attorney general's office and Constellation Energy Group, parent company of
BGE. The two sides recently filed dueling lawsuits over credits that the
legislature forced the company to give consumers in 2006 as part of a response
to impending rate increases.
Middleton predicted that the legislature will ultimately approve the bill,
though he said its final form would depend on the success of the negotiations.
With less than two weeks left in the legislative session, Middleton said he
hoped the two sides could reach a settlement. He said that the state needs
Constellation as a partner in solving the state's energy needs.
laura.smitherman@baltsun.com
Sun reporter Timothy B. Wheeler contributed to this article.
