O'Malley's Energy Plan

Have you read about the latest plan to increase your energy costs in the major media? I didn’t think so. The following comes from the Senate Republican Caucus. And when the rates go up, the same people who promote this stuff will be demonizing the energy producers for raising prices.

Ellen

During the 2006 campaign, Martin O'Malley issued a clarion promise to reduce the electric bills of Maryland's citizens. In a well-crafted television ad, O'Malley proclaimed that he had an energy plan that would roll back electric rates throughout the state. Four years later, consumer energy bills are higher than ever.

In fact, O'Malley's energy plan has been partially responsible for higher costs to consumers. On Thursday, Senate Republicans spent almost an hour engaged in floor debate to amend a bill proposed by O'Malley as part of his statewide energy policy (Senate Bill 277 - Renewable Energy Portfolio - Solar Energy). In effect, this bill creates a $1 billion energy tax on Maryland's consumers over the next fifteen years.

The bill requires Maryland's energy companies to purchase a certain percentage of energy from solar providers and, if not, pay a penalty. As explained by Republican Senators on the Senate floor, this level of solar capacity does not exist in Maryland. The bill is inherently structured so that the renewable energy thresholds cannot be achieved and, therefore, penalties are assessed that are then passed through to customer's bills.

"This is a tax bill - this is a solar tax on our utility users," said Senator EJ Pipkin, emphasizing the $1 billion estimate of costs to consumers. "You might as well just call this the 'Renewable Energy Portfolio Tax.'"

Senator Andy Harris questioned the Democrat floor leaders of the bill about how much this "mandatory fee increase" will cost ratepayers. During the committee hearings, estimates were presented that the bill would cost ratepayers over $500 million in the BGE service area, $300 million in the PEPCO area and additional millions throughout the rest of the state. In response, Democrat advocates for the bill failed to dispute the validity of the $1 billlion in additional costs to consumers. Harris offered an amendment to insure that no penalties could be passed onto consumers.

Frederick County Senators Alex Mooney and David Brinkley both noted that an economic storm-cloud hovered over the floor debate from the announcement this week that BP Solar, a manufacturer of solar panels, was closing its Frederick, Maryland plant. In prior years, the renewable portfolio energy legislation was viewed as a spur to local economic development but that argument has weakened now that most manufacturing has moved overseas.

Noting that the Public Service Commission confirmed that the solar capacity does not currently exist, Senator Mooney offered two amendments to defer implementation of the bill and to defer penalties on consumers until the solar capacity actually exists in Maryland. Senator Nancy Jacobs advocated for an amendment to return any funds received from penalties to the ratepayers as a tax credit. In offering his amendment, Senator Brinkley stated that the funds from penalties already paid by utility consumers were "harvested" by O'Malley this year to balance the state budget instead of used to promote solar energy development.

By the end of the second reader debate, all amendments to eliminate the high tax consequences on consumers were rejected by the Democrat majority. The bill will be voted on third reader on Friday, April 2nd. The Republican Senators have taken a unanimous caucus position in opposition to Senate Bill 277.