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ANNAPOLIS — A proposed shift in how proceeds from the Regional Greenhouse Gas Initiative are dispersed for the next two years is angering environmentalists and putting them in the uncomfortable position of opposing more aid to low-income Marylanders.

As more state residents lose their jobs and are struggling to pay rising utility bills, Gov. Martin O'Malley (D) wants to put more money toward low-income heating assistance, which would deplete funding for energy efficiency and conservation programs.

"There's no doubt that people are having a hard time paying their utility bills, and Maryland consumers are looking for help," said Johanna E. Neumann, state director of Maryland PIRG. "The problem is this realignment takes money away from the long-term solution that lowers people's bills."

Maryland's participation in RGGI, a cap-and-trade compact among 10 Northeastern states aimed at reducing the amount of carbon dioxide emissions that power plants are allowed to produce, is expected to generate $91 million in fiscal 2010.

About $35.5 million was expected to be put toward energy conservation programs for low- and middle-income consumers, but the change could mean a reduction of roughly $20 million, Neumann said.

The proposal, which is part of the Budget Reconciliation and Financing Act, has environmental advocates worried that the change could eventually become permanent.

"Unfortunately, I think the economy has put us in a situation of choosing between short-term gain and long-term gain," said Cindy Schwartz, executive director of the Maryland League of Conservation Voters. "None of us in the environmental community want to be in the position of saying we don't support helping people with low incomes."

Maryland Energy Administrator Malcolm D. Woolf could not be reached for comment.

Progressive Maryland Executive Director Sean R. Dobson, whose group advocates for working families' issues, said it's unfortunate when scant dollars are available for such worthy programs.

"Hopefully, the economy rebounds, and you won't have good-guy groups fighting over money like this," he said.

Even though the distribution of RGGI proceeds would revert to its original split in fiscal 2011, one lawmaker worries that it may be difficult to turn back the clock, which could endanger long-term energy reduction goals.

"There's a whole litany of bills that have been passed over the last two or three years that deal with us trying to do something to clean up our environment, and I'm just concerned that if [a lack of funding] were to continue past this two years that we would be jeopardizing that possibility," said Del. Sally Y. Jameson (D-Dist. 28) of Bryantown.

But the alternative of people unable to pay their energy bills is even less desirable.

"We need to take care of the environment, but we also don't want to be reading in the newspaper about citizens freezing to death because they can't heat their homes," said Del. Murray D. Levy (D-Dist. 28) of La Plata.

Still, the proposed change undercuts O'Malley's EmPOWER Maryland initiative that aims to reduce energy consumption 15 percent by 2015, Neumann said. "We are failing first grade when it comes to EmPOWER Maryland."

A bigger problem, she said, is the perennial underfunding of the state's Electric Universal Service Program, which is funded largely through a surcharge on utility bills and is capped at $37 million. That has become a greater concern as more people have enrolled in the program, said Neumann, who is pushing for legislation that would enable the Maryland Public Service Commission to raise the cap.

The $789 billion federal stimulus package might provide additional assistance for low-income energy consumers, but that money would only be temporary, Jameson said.

But the temporary redistribution could have a lasting negative impact on how RGGI proceeds are spent in other member states.

"This could set a really bad precedent for using the funds for short-term handouts rather than the long-term change that we need to see," Neumann said.