Sup­port gov­er­nor’s veto of ‘Sun­shine Tax’

Record Observer - - Opinion -

One of the first or­ders of busi­ness in the 2017 Mary­land Gen­eral As­sem­bly Ses­sion is to act on ve­toed bills. The Re­new­able En­ergy Port­fo­lio Stan­dards (RPS) Re­vi­sion leg­is­la­tion of the pre­vi­ous ses­sion is a tax in­crease upon ev­ery sin­gle elec­tric­ity ratepayer in Mar yland.

I was a vo­cal op­po­nent dur­ing bill hear­ings and voted against this leg­is­la­tion in com­mit­tee and on the Se­nate floor. Gov. Larry Ho­gan has ve­toed this leg­is­la­tion pre­vent­ing it from be­com­ing law, dub­bing it the “Sun­shine Tax.”

In the vote to sus­tain the Gov­er­nor’s veto, the ques­tion be­fore my Gen­eral As­sem­bly Col­leagues is whether Mary­land’s ratepay­ers should bear the cost of in­creas­ing and ac­cel­er­at­ing re­new­able en­ergy com­pli­ance lev­els to 25 per­cent by 2020.

I do not be­lieve the ratepay­ers should bear this cost as there are sim­ply no mea­sur­able ben­e­fits to jus­tify it. I will vote to sus­tain the Gov­er­nor’s veto and en­cour­age my col­leagues to do the same.

Mary­land al­ready has some of the most ag­gres­sive RPS goals amongst our sur­round­ing states. The cur­rent RPS goal re­quires Mar yland’s elec­tric­ity sup­pli­ers to reach a level of 20 per­cent re­new­ables by 2022.

Un­der the ex­ist­ing frame­work, elec­tric­ity sup­pli­ers must ac­quire an amount of re­new­able en­ergy cred­its (RECs) based on a pro­por­tion­ate share of its to­tal elec­tric­ity sup­ply. For in­stance, in 2015, the last year for which data is avail­able, an elec­tric­ity sup­plier was re­quired to demon­strate that it re­tired an amount of RECs equal to 13 per­cent of the to­tal elec­tric­ity that it sup­plied to cus­tomers in Mary­land.

To achieve the 13 per­cent RPS goal, it cost Mary­land ratepay­ers an ad­di­tional $126.7 mil­lion in higher elec­tric­ity costs. Un­der cur­rent statute, as the an­nual re­quire­ment climbs to 20 per­cent, the cost of com­pli­ance will only in­crease.

Fur­ther in­creas­ing the RPS to 25 per­cent in a shorter time frame only com­pounds this cost. The De­part­ment of Leg­isla­tive Ser vices es­ti­mated that the in­crease will im­pose an ad­di­tional $49 mil­lion to $196 mil­lion on Mary­land res­i­dents.

If an in­crease to the RPS was cer­tain to ben­e­fit Mary­land-based re­new­able en­ergy gen­er­a­tors, it at least could be de­fen­si­ble. But re­cent ex­pe­ri­ence shows this is far from cer­tain.

In 2015, re­new­able en­ergy gen­er­at­ing fa­cil­i­ties lo­cated in 15 dif­fer­ent states par­tic­i­pated in Mar yland’s RPS. What’s worse is that 88.7 per­cent of the Tier One NonSo­lar RECs used to com­ply with Mary­land’s 2015 RPS goal came from out-of-state fa­cil­i­ties.

To il­lus­trate the amount of Mary­land ratepayer dol­lars go­ing out of state, in 2015 the av­er­age cost of a Tier One Non-So­lar REC was $13.87. In or­der to com­ply with Mary­land’s Tier One Non-So­lar RPS goal, 5,438,972 RECs were needed from re­new­able en­ergy gen­er­a­tors out­side of Mar yland.

Thus, po­ten­tially $75 mil­lion from Mary­land ratepay­ers went to out-of-state en­ergy gen­er­a­tors. It is un­think­able to ask Mary­land ratepay­ers to fur­ther foot the bill to sub­si­dize even more out-of-state en­ergy gen­er­a­tors.

This is not to say we are against re­new­able en­ergy goals. Gov. Ho­gan has com­mit­ted to grow­ing all sec­tors of Mary­land’s econ­omy, in­clud­ing clean en­ergy. State en­ergy pro­grams have sup­ported such growth.

When the Gov­er­nor took of­fice in Jan­uary 2015, Mary­land hosted only 258 megawatts (MW) of so­lar gen­er­a­tion ca­pac­ity. Since then, the num­ber has more than dou­bled to 643 MW of de­ployed so­lar. This in­crease was a re­sult of Mary­land based jobs.

There is cer­tainly an eco­nomic ben­e­fit in grow­ing Mary­land’s re­new­able en­ergy in­dus­try, but un­til we re­lax gov­ern­ment pro­vided sub­si­dies, there will also be a cor­re­spond­ing cost which all cit­i­zens will bear.

The un­nec­es­sary ac­cel­er­a­tion and in­crease in RPS goals fur­ther in­creases sub­si­dies that will end up in the pock­ets of out-of-state re­new­able en­ergy gen­er­a­tions; this seals my vote to sus­tain the Gov­er­nor’s veto. SEN. STEVE HERSHEY

Dis­trict 36 – Up­per East­ern Shore, Mem­ber Se­nate Fi­nance Com­mit­tee

Billy Kim­bles was named Out­stand­ing Young Farmer.


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