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Energy & Environment

Two Major Energy Bills Hang in the Balance

State Sen. Brian J. Feldman (D) addresses supporters of an expanded Renewable Portfolio Standard at a Jan. 9 rally in Annapolis. Photo by Josh Kurtz

A clean energy bill that’s a top priority for Maryland environmental groups sailed out of the state Senate Wednesday but faces uncertain waters in the House of Delegates.

Meanwhile, a heavily-lobbied but little publicized measure to change the way electric and gas utilities set their annual rates picked up some important opposition this week – including from Attorney General Brian E. Frosh (D). That bill has passed in the House but has not moved in the Senate.

The fate of these dual pieces of legislation could have a profound impact on how energy is supplied in Maryland and how utilities are regulated. But both face political obstacles in the final weeks of the General Assembly session.

The utility bill seemed like it was on a glide path last week after passing the House Economic Matters Committee 20-0 and the full House 83-51. It is backed by the powerful electric and gas utility companies and their all-star roster of savvy and plugged-in lobbyists.

But as more lawmakers and opinion leaders begin to dial in on the legislation, opposition is emerging.

Under current Maryland law, the Public Service Commission (PSC) reviews utility companies’ costs from the previous year to determine what rates they can set for the upcoming year. But the legislation allows for different ways to calculate ratepayer costs – including looking ahead to the strength of energy markets, the utilities’ financial stability, and natural forces like weather and climate.

The utilities say the new system would modernize the rate-setting structure and streamline regulations and procedures to the benefit of both consumers and the utility companies themselves. Thirty-eight other states have already adopted some form of this regulatory system.

But Frosh this week joined opponents lining up against the legislation – a group that now includes all five commissioners of the PSC, which regulates utilities; the Office of People’s Counsel, which represents the interests of ratepayers on utility issues; and the editorial board of The Baltimore Sun.

In a letter to Sen. Delores Kelley (D-Baltimore County), chair of the Finance Committee, where the legislation is under consideration, Frosh called the bill “premature” and said it “could result in unreasonably increased energy costs to consumers.”

Frosh also called the legislation “unnecessary,” because the PSC is looking into ways of accommodating alternative forms of rate-setting, including setting up a daylong technical conference of stakeholders on April 30 to discuss the possibility. But mostly, Frosh argued that the alternative rate-setting method hasn’t been studied sufficiently to determine its potential impacts in Maryland.

“The effects of SB 572 upon consumers are unknowable without further study,” he wrote.

Frosh’s assessment follows an editorial in The Sun that appeared in the newspaper Tuesday advising lawmakers to slow down.

“We aren’t inherently opposed to alternative methods of rate setting,” the newspaper wrote. “They may well be more appropriate in some circumstances. But given how important fair and transparent regulation of utility rates is to consumers and the companies alike, we shouldn’t rush into this. Let the PSC get input on these alternatives, let it study other states’ experiences, and let’s make sure that whatever we do benefits the state as a whole, not just the utilities.”

Sen. Brian J. Feldman (D-Montgomery), the Senate sponsor of the legislation and vice chair of the Finance Committee, said the panel isn’t quite ready to vote on the bill.

“The committee’s taking a close look at it based on all the feedback we’ve been getting,” he said.

Feldman this week was the floor manager for the Clean Energy Jobs Act, which passed in the Senate Wednesday by a 33-13 vote.

The bill would require the state to use 50 percent renewable energy for electricity by 2030, up from the current goal of 25 percent renewables by 2020. It would also mandate a study for reaching 100 percent renewables by 2040.

The legislation is the top priority for most environmental groups this session and faces scant opposition among energy providers. Even the state’s electric cooperatives, which had previously been against the bill, dropped their opposition when a provision was added to the bill on the Senate floor this week, lowering the level of solar-generated power they would be forced to use.

Proponents of the legislation say the fact that it will counter climate change and expand the renewable energy industry in the state ought to make it irresistible.

“This bill will help fight climate change while expanding jobs, investment and tax revenue in our state,” the Maryland Climate Coalition said in a statement following Wednesday’s Senate vote. “We need this legislation to ensure continued renewable energy demand, so we bring green jobs and investments to Maryland, rather than losing them to neighboring states that have already passed similar legislation.”

But the legislation continues to face some resistance among House leaders – not because of their opposition to the substance of the bill necessarily, but because they seem reluctant to pass it until a $1 million study looking at the past, present and future of the state’s Renewable Portfolio Standard is completed in December.

Last week – in a vote that has not been officially recorded – the House Economic Matters Committee attempted to kill the bill during an evening voting session. But in a surprise result, the unfavorable motion was rejected, 11-10.

Economic Matters Chair Dereck E. Davis (D-Prince George’s) told Maryland Matters this week that the committee would take a look at the changes the Senate made to the legislation before deciding how to proceed.

Environmental groups and Feldman are holding a news conference Thursday morning in an attempt to pressure the House to pass the measure.

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Two Major Energy Bills Hang in the Balance