After three years of pressure from environmental groups and debate in Maryland’s state legislature, both houses passed an offshore wind bill, which will be signed by Governor O’Malley.
The Maryland Offshore Wind Energy Act of 2013 is the first time a state has passed legislation that subsidizes offshore wind.
The bill, which failed to pass for two years, allows Maryland to contract with a private developer to build an offshore wind farm.
The move could finally bring offshore wind to the East Coast, which is being held back by huge upfront costs to developers.
And it includes a $10 million development fund that helps small and minority businesses participate in the offshore wind supply chain.
Utility companies will be required to buy offshore renewable energy credits, which will end up providing a subsidy of $1.7 billion paid over 20 years. Residential ratepayers would pay an extra $1.50 a month and businesses would pay 1.5% more a month after the wind farm is built.
It finally passed the legislature when O’Malley cut the size of the offshore farm by two-thirds – down to 200 megawatts – which lowered residential payments to about $1.50 a month.
O’Malley says the surcharge is a small price to pay in exchange for establishing an important local industry that’s stymied by huge upfront costs.
A 200 MW offshore wind project would create almost 850 manufacturing and construction jobs for five years and an additional 160 ongoing supply and operations and maintenance jobs thereafter, according to the National Renewable Energy Lab.
To give you an idea of what the Republican push-back has been: “This is the dumbest idea ever. Never before have so many Marylanders paid for the benefit of so few,” Senate Minority Leader E. J. Pipkin told the Washington Post. The bill is “the worst kind of corporate welfare.”
The first competitive offshore wind lease sales in federal waters take place this year, off the coast of Virginia and two near Rhode Island.
Two offshore leases have been approved – NRG Bluewater Wind off of Delaware and Cape Wind off Massachusetts.
