Brief

Maryland Gov. Hogan vetoes increase to state's renewable energy standard

Dive Brief:

  • Maryland Governor Larry Hogan has vetoed legislation to raise the state's renewable portfolio standard from 20% to 25% by 2020, citing tax increases of up to $196 million under the plan.
  • Hogan had been expected to sign the bill, and a recent poll found more than 70% of the state's voters across both parties supported the increased standard.
  • According to Hogan, Maryland consumers in 2014 paid more than $104 million for renewable energy credits and the higher standard would impose "an additional burden on ratepayers."

Dive Insight:

Earlier this month, the prospects for increasing Maryland's renewable portfolio standard to 25% by 2020 looked good.

By emphasizing the economic benefits behind renewable energy programs, the bill's backers built a bipartisan coalition of enviornmentalists and business interests in the state legislature. 

The bill passed the House on a 92-43 vote in March and the Senate followed with a 31-14 vote in April. After Gov. Hogan signed a bill to strengthen greenhouse gas reduction goals that month, supporters told Utility Dive they figured he would approve the RPS increase as well. 

But Hogan differed in his view of the bill's economic impacts. In a letter vetoing the bill, Hogan said that while the goals were "laudable," he couldn't support the costs.

"This legislation is a tax increase that will be levied upon every single electricity ratepayer in Maryland and, for that reason alone, I cannot allow it to become law," Hogan wrote. He said the measure would raise taxes between $49 million and $196 million by 2020.

This year, Maryland electric suppliers must demonstrate renewable energy credits for 15.9% of their supply, with a goal of 20% by 2022 (including at least 2% solar and no more than 2.5% offshore wind). The new RPS would have targeted 25% by 2020.

"Electricity suppliers and consumers share an obligation to develop a minimum level of renewable resources in the electricity supply portfolio of the state," Hogan said. "While I appreciate the economic benefit of Maryland's growing solar industry, there is also a corresponding cost which is borne by all citizens under House Bill 1106. I believe the state should not add to this burden."

The higher goals would have made Maryland's renewable target the sixth highest nationally, behind Vermont, California, Hawaii, New York, and Connecticut. Hogan noted that under the existing standard, "Maryland retains its status as a national leader in achieving RPS goals."

Supporters of the measure said they would attempt to override Hogan's veto, but that it could still do damage in the short term. 

"This veto will likely cause immediate job losses in the solar industry, while temporarily delaying reductions in harmful air, water and climate pollution," the Chesapeake Climate Action Network said in a statement. "It's deeply hypocritical for the governor to say he supports reducing greenhouse gas pollution and now to veto the top policy solution."

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Filed Under: Regulation & Policy