As Maryland eyes more ambitious renewable energy goals, FirstEnergy — the parent company of the local electrical utility Potomac Edison — warns that legislation could increase electric bills.
The General Assembly is reviewing Senate Bill 732 and House Bill 1453, which would increase the state’s Renewable Portfolio Standard, which requires utilities to sell a specified amount of electricity from renewable sources, from 25 percent by 2020, and from 50 percent by 2030.
Anne Grealy, FirstEnergy’s executive director of state affairs, told the House Economic Matters and Senate Finance committees last week that the cost of buying renewable energy credits to meet the elevated standard would raise the cost of compliance for Potomac Edison by about $208 million. That cost would be paid by its ratepayers over the next 11 years, she said.
“The primary reason for FirstEnergy’s opposition to this bill is the cost impact it would have on Potomac Edison’s customers,” Grealy testified.
There are an estimated 1.6 million people in Potomac Edison’s Maryland service area and 270,659 metered accounts at residences, schools, industrial sites and others, said spokesman Todd Meyers.
The average residential customer in Maryland uses about one megawatt-hour of electricity each month, according to a fiscal analysis by the Department of Legislative Services. Analysts estimated a $1.40 to $1.85 increase per megawatt-hour if the bill passes.
FirstEnergy had not completed its own monthly cost calculation, said spokesman Doug Colafella.
The General Assembly passed the current Renewable Portfolio Standard in 2016, but it was vetoed by Gov. Larry Hogan (R). The Legislature then overrode the governor’s veto in early 2017.
Some legislators have questioned why representatives are back so soon with another change to the Renewable Portfolio Standard. The bill’s sponsor, Sen. Brian Feldman (D-Montgomery), told the Senate Finance Committee on March 6 that Maryland is no longer one of the country’s renewable energy leaders, despite having reached some of its targets.
“We have a very different landscape that exists today than existed just a couple years ago,” Feldman said.
Maryland developed its Renewable Portfolio Standard in 2004, and since then more than 20 states have followed and set higher goals, he said.
His bill would require further growth of the state’s solar and wind energy, and no longer allow electricity suppliers as of Jan. 1, 2019, to purchase credits from waste-to-energy and refuse-driven fuel sources, such as incinerators.
Representatives from the Dickerson waste-to-energy plant in Montgomery County and Wheelabrator plant in Baltimore supported the bill as long as it was amended to continue to allow the sale and purchase of renewable energy credits from waste-to-energy facilities.
Some of the committee’s members also questioned the bill’s proponents about how another increase would help jobs in the state.
David Murray, executive director of the Solar Energy Industries Association for Maryland, the District of Columbia, Delaware and Virginia, said the bill would stabilize the solar market, and its 14.5 percent goal for solar energy would increase demand and spur the investment needed to make solar economically feasible for Maryland customers again. Currently some of Maryland’s solar workers are being sent out-of-state projects where Solar Renewable Energy Credit prices are higher.
SETTING AN EVEN HIGHER BAR
The House is also evaluating House Bill 878 from Delegate Shane Robinson (D-Montgomery), which would scrap the Renewable Portfolio Standard altogether and require electricity suppliers to purchase 100 percent renewable energy by 2035.
Rather than buying credits for the electricity from a plant outside Maryland, electricity suppliers would be required to enter long-term contracts to buy power from solar, wind, ocean energy, or small hydroelectric power plants that produce electricity in Maryland or are connected to its grid.
He hoped that getting rid of the credit system would reduce “greenwashing,” where utilities buy credits to claim environmental benefits of energy produced outside Maryland.
Robinson testified that the state would save an estimated $2 billion from no longer purchasing unbundled renewable energy credits. In an interview with The News-Post, he estimated the energy transition would cost customers $1.50 more per month on their electric bills.
But the savings were not clear to the Department of Legislative Services, whose analysts wrote in a fiscal note that they could not estimate the bill’s effect on electric rates. Administrative costs, the future of the state’s existing electricity infrastructure and the cost of procuring more offshore wind complicated the calculation.
Sally Jameson (D-Charles), vice chairwoman of the House Economic Matters Committee, questioned Robinson directly on March 5 on where funding for the bill’s incentives and rebate programs would come from. Robinson joked that he would take out his checkbook, but then seriously asked for time to go back, look at the bill and get the committee an answer.
“The bill has a long way to go to pass,” Robinson said.