Friday, April 25, 2008

Maryland Legislature Passes Energy & Environment Bills

Several environmental and energy bills were passed during the Maryland Legislature's General Assembly Session (Jan-Mar) and signed by Governor Martin O'Malley, including legislation that:

1) Sets out how to spend the regional auction proceeds,

2) Limits development near the Chesapeake Bay,

3) Establishes "green" building standards for new schools, and

4) Ratifies an agreement with Constellation Energy Group that provides $170, one-time rebates to residential customers of Baltimore Gas & Electric Company.

Carbon credit auction proceeds, for example, will go to energy efficiency and conservation programs meant to lower electricity usage and bills. There will be an increase in grants for solar energy and geothermal heat pump systems for homes. The new laws aim to reduce the state's energy consumption 15 percent by 2015 and to double the amount of renewable energy that power companies must provide for sale to customers to 20 percent by 2022.

The Constellation settlement is valued at $2 billion and ends a legal battle with the state. In addition to the credits, consumers would no longer be obligated to pay $1.5 billion in future costs for dismantling nuclear power plants in Southern Maryland, as had been stipulated as part of the state's 1999 deregulation plan. The settlement also gives the state some assurance that the company will build a nuclear power plant here. In exchange, the company avoids regulatory inquiries into certain costs consumers paid as part of the state's move to a deregulated energy industry.

Under the Regional Greenhouse Gas Initiative - a cooperative effort of 10 northeastern and Mid-Atlantic states to fight global warming - carbon-dioxide emission "allowances" are to be auctioned this year. The cap-and-trade system in Maryland is expected to raise $80 million to $260 million a year.

The Department of the Environment plans to promulgate rules by January to set aside up to 5 percent of carbon credits under the regional auction for cleaner energy generators that come online before the summer of 2012. That would potentially include Competitive Power Ventures Inc., (CPV) plans to build a 640-megawatt natural gas-fired power plant in Charles County that would provide electricity to about 600,000 homes in Washington and Central Maryland. CPV is based in Silver Spring, MD. The set-asides would level the playing field for new power plants competing for energy contracts with generators in neighboring states such as Pennsylvania and Virginia, which are not part of the regional auction. The credits would have cost tens of millions of dollars and the exemptions would be limited to the first six years of the system.

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