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On its face, the amendment seems innocuous. It would require that Maryland study the “full system” cost of different forms of energy generation, from nuclear and natural gas to offshore wind and solar.
The amendment — which comes from Republicans but now has bipartisan support — was added unanimously Tuesday in the Senate Education, Energy and Environment Committee to the sweeping energy legislation known as the Utility RELIEF Act.
But renewable energy advocates are sounding the alarm. They believe that the model underlying the study is flawed, since it unfairly disadvantages renewable energy.
The study evaluates hypothetical scenarios in which all the state’s electricity needs are met by only one type of generation, paired with battery energy storage. Wind and solar, which cannot generate energy all the time, would require more batteries to serve the grid around the clock, so they will likely appear more expensive under this analysis, said Rebecca Rehr, director of climate policy and justice at Maryland’s League of Conservation Voters.
“There is an inherent bias against renewables in this approach,” Rehr said. “The study proposed in the bill would be a hypothetical scenario: What if Maryland were powered only by one source of energy at a time? … That’s not based in reality.”
But Sen. Mary Beth Carozza (R-Lower Shore), who sponsored a bill on the subject as well as the amendment, argues that the study is valuable, because it will provide the “fuller costs” of different energy types. And it doesn’t just scrutinize renewables, she said, but studies natural gas and nuclear energy as well.
“The current model … It doesn’t look at issues where there’s intermittent sources like wind and solar, or doesn’t look at the dispatchability issue, where you need storage,” she said.
Carozza’s study was added to the Utility RELIEF Act, the broad bill touching on energy concepts from data centers and energy efficiency to power lines and solar panels.
Education, Energy and Environment Committee Chair Brian Feldman (D-Montgomery) said Wednesday he didn’t recall ardent opposition from renewables groups to the study when the committee heard Carozza’s bill. But he added that there is ample time to alter the Utility RELIEF Act as concerns arise before the session ends on April 13.
“This is a 100-plus page bill, and there are parts of this 100-page bill that people can pick out and decipher and be critical,” Feldman said. “If there are some things that we missed, I think there’d be opportunities — even for this session — to fix it. But obviously, we come back every session.”
Carozza’s study also passed the Senate unanimously as a standalone bill, Senate Bill 270, which is scheduled to be heard Thursday by the House Environment and Transportation Committee.
Carozza, whose district includes Ocean City, is an ardent opponent of the offshore wind farm proposed for the beach town’s coastline. But she said her study is not meant solely to show wind energy’s cost.
“That’s not the purpose of the bill,” Carozza said. “That’s why it is fuel-neutral. Because I could have written the bill just to have one source.”
Carozza said she was inspired to introduce the legislation by constituents, who had questions about the costs behind various sources of energy.
“There’s a recognition and, I think, a consensus that we need more energy generation in the state of Maryland. But what are the costs involved with that?” Carozza asked.
Carozza notes that the study has the support of the Maryland Public Service Commission, which would be tasked with conducting the analysis. The commission suggested several amendments, and they were added to the bill, Carozza said.
At best, this would result in a study that is of no use in evaluating actual least-cost pathways to affordable, reliable electricity in the state, At worst, it legitimizes an unvetted economic model and would use bad modeling to promote bad policy.
– Bryan Dunning, senior policy analyst, Center for Progressive Reform
Benjamin Baker, senior adviser at the commission, said the amendments give the commission additional flexibility to use other models — not just the Levelized Full System Cost of Electricity, or LFSCOE, model, as it’s known.
“The important thing is that the Senator accepted an amendment allowing the Commission to utilize other appropriate models in the study,” Baker said in a statement. “This means we will have the flexibility to also include other modeling and tools as we study the process if we think it is needed or have concerns as we go.”
Under Carozza’s amendment, the PSC would conduct the study using funds from ratepayers. It would need to use a consultant, and that’s expected to cost $250,000 for one year — less than one cent per month for the average ratepayer.
But during a legislative session when the focus is on reducing ratepayer bills, adding costs — for a study of dubious value — feels counterproductive, Rehr said.
“Why add money to our electric bills to analyze a hypothetical?” Rehr asked.
Bryan Dunning, a senior policy analyst at the Center for Progressive Reform, argued that the hypothetical situation studied under the bill is “entirely detached” from the existing generation mix in Maryland, or in the electric grid that serves Maryland, PJM Interconnection.
“At best, this would result in a study that is of no use in evaluating actual least-cost pathways to affordable, reliable electricity in the state,” Dunning said in a statement. “At worst, it legitimizes an unvetted economic model and would use bad modeling to promote bad policy.”
But Senate Minority Leader Steve Hershey (R-Upper Shore) said that the study is “common sense,” and environmentalists only oppose it because they won’t like the results.
“It’s because they recognize that information is going to come back that doesn’t align with their goals,” Hershey said.
Hershey argues that it has been difficult to quantify the costs of the General Assembly’s endorsement of renewable energy, including through the Renewable Portfolio Standard, which requires energy suppliers to procure an increasing amount of wind, solar, and other forms of renewable energy. He is hoping that Carozza’s study, which he also sponsored, will help demystify those costs.
“It has been a struggle for as long as I’ve been here to find out, really, what these policies cost,” he said.
Adam Dubitsky, Maryland director for the Land & Liberty Coalition, who previously worked for Gov. Larry Hogan (R), said that the LFSCOE model is an “anti-renewable” framework, “masquerading as responsible energy policy.” The coalition is a group of farmers, landowners and community members who support utility-scale renewable energy.
The model, debuted in a 2022 journal article out of Rice University, has “developed a cult following among anti-wind and solar activists,” Dubitsky said in a statement.
“All this does is force an already burdened PSC to waste time and ratepayer dollars analyzing a make-believe world where all our electricity comes from a single source, in order to mislead ratepayers about affordable, quickly-deployed renewable energy.”
