ANNAPOLIS, Md. — Maryland utilities would have to sign multi-decade contracts to buy offshore wind energy under a proposal Gov. Martin O'Malley could introduce as soon as Thursday.
A draft of O'Malley's offshore wind bill, a copy of which was obtained by The Associated Press, would require the state's four utilities to sign fixed-price contracts of at least 20 years with offshore wind developers who are expected to build wind turbines a dozen miles off the coast of Ocean City.
The measure will likely cost Maryland ratepayers an additional $1.60 a month on their utility bills, said Malcolm Woolf, director of the Maryland Energy Administration.
The wind turbines would take years to develop.
"If all goes well, we're hoping to have wind turbines spinning in 2016," Woolf said Wednesday.
Under the O'Malley proposal, Maryland's Public Service Commission would help negotiate the purchase of 400 megawatts to 600 megawatts of wind power generated by offshore turbines.
A spokesman for Constellation Energy Group Inc., the parent company of Baltimore-based utility BGE, declined comment. A spokesman for Pepco, a unit of Pepco Holdings Inc. that provides electricity throughout the Washington suburbs, said the company would not take a position until it sees the final bill filed by O'Malley.
Woolf and energy administration staffers have been working closely with the U.S. Interior Department to define an area of about 207 square nautical miles east of Ocean City where the wind turbines would be erected.
The Obama administration has focused on speeding the development of offshore wind turbines along the Atlantic Outer Continental Shelf, although turbines have not yet been erected in federal waters.
Maryland Senate Finance Chairman Thomas "Mac" Middleton, D-Charles, said locking utilities into fixed prices for decades could keep them from getting better rates later, when wind energy becomes cheaper and more abundant.
"The biggest issue is going to be cost," said Middleton, who is set to lead Senate deliberation on the measure.
Senate Minority Leader Nancy Jacobs, R-Harford, said Wednesday she was skeptical of any measure that sets a new mandate.
"What happened to competition?" Jacobs asked.
A coalition of Maryland steelworkers and environmentalists has formed to help Woolf and the O'Malley administration move the measure through the General Assembly.
"Some things we have heard, as far an impact on electricity rates, as far as in manufacturing and residential rates, we are concerned about. But the overall concept of wind turbines – we support that," said Jim Strong, a sub-district director for the United Steelworkers in Maryland.
He said O'Malley approached him in the fall, seeking union support for his offshore wind bill.
Woolf cited U.S. Energy Department estimates that a 500-megawatt offshore wind project could generate 2,000 construction jobs over five years and 400 long-term jobs maintaining the turbines.
The coalition of labor and environmental groups in Maryland mirrors the national BlueGreen Alliance that is lobbying Congress in support of renewable energy projects with national mandates and funding.
"In order to really get our economy back on track, we believe we have to have a strategy of making things again," Strong said.