Maryland Poised to Develop Offshore Wind Resources
Promoting development of Maryland’s considerable offshore wind energy resources tops Governor Martin O’Malley’s recently announced 2012 legislative agenda. The Maryland Offshore Wind Energy Act of 2012, S.B. 237, if enacted, will tweak the state’s existing renewable portfolio standard (RPS) to require that a small percentage (no more than 2.5 percent) of generation be sourced from qualifying offshore wind projects. The current draft of the bill requires utilities to meet the new offshore wind RPS beginning in 2017 and specifies that qualifying projects must interconnect to the PJM Interconnection at a point located on the Delmarva peninsula. Maryland’s utilities will be able to satisfy the offshore wind RPS by obtaining (through development or purchase) a new category of renewable energy credit (REC) — the offshore wind renewable energy credit (OREC).
The Maryland bill borrows from New Jersey’s Offshore Wind Economic Development Act of 2010. Other States in the Mid- to Upper-Atlantic region have successfully lured emerging renewable technologies to their region using similar modifications to RPS legislation. Delaware amended its RPS in an attempt to attract fuel cell technology, which resulted in the Delaware PUC’s recent approval of a tariff that allows the utility to rate-base portions of the cost of developing a utility-scale fuel cell project in Delaware. As mentioned above, New Jersey’s addition of an OREC in 2010 has garnered significant attention from developers, one of whom hopes to receive Public Utilities Commission-approval and start offshore construction later this year.
This is Governor O’Malley’s second attempt to encourage development of Maryland’s considerable offshore wind resources. The Governor’s first attempt, last year’s S.B. 1054, would have required the State’s utilities to enter into long-term (25+ years) power purchase arrangements with offshore wind projects. The Maryland Legislature rejected that approach, based largely on concerns over the ultimate costs to the average Maryland ratepayer, which were estimated to be between $24 and $108 annually.