Utilities blast solar proposal

Lawmakers say it will likely lower, not raise, customers’ bills

‘‘All of our ratepayers stand to benefit from this bill,” said Sen. Robert J. Garagiola (D-Dist. 15) of Germantown, the bill’s sponsor. In a best-case scenario, he said, ‘‘their rates will go down 2 [percent] to 5 percent.”

The bill stipulates that, beginning in 2008, 0.005 percent of the state’s electricity come from solar power. The requirement increases every year so that by 2015, 0.25 percent of the state’s electricity would be solar, and by 2022 solar power would make up 2 percent. The Public Service Commission would designate a person to oversee the implementation and make policy recommendations to the commission.

Opponents, mainly utility companies, say the proposal will raise their costs, which would be passed on to commercial and residential customers.

‘‘This bill would very much affect us,” said Allen Staggers, spokesman for Allegheny Power of Greensburg, Pa., which has more than 240,000 commercial and residential customers in Maryland’s western counties.

‘‘We don’t own power generators,” Staggers said. ‘‘We have to buy power for our customers, and there’s already a requirement that a certain amount of that power be renewable energy. If we have to make sure that 2 percent of that power is solar, it’s going to cost us more money.”

Staggers said that if Allegheny fails to add solar power to its energy portfolio, it would have to pay a compliance fee that could exceed $700 million by 2019.

‘‘That’s a lot of money. Solar power is expensive,” he said. ‘‘Higher costs will simply be reflected in the customer’s bill. If our cost is more, that’s going to mean higher bills for our customers.”

The state’s biggest utility, Baltimore Gas and Electric, also is leery of the legislation.

‘‘While it has the potential for being a very clean source for producing electricity, solar energy has been historically, and remains today, very expensive,” BG&E said in written testimony in the Senate. The utility warned that the costs, in addition to the compliance fees, could be passed on to consumers.

Another big utility in the region, Pepco, which provides electricity in Montgomery and Prince George’s counties, also criticizes the legislation.

‘‘We were opposed to that measure because it would lead to higher rates,” said Pepco spokesman Robert Dobkin. ‘‘Solar power is still more costly to produce.”

Pepco already offers customers what it calls ‘‘green power,” electricity generated from renewable sources, including wind, he said. Customers who choose that package ‘‘pay a premium because it’s more expensive to produce.”

Garagiola said that even in a worst-case scenario, rates would increase only slightly under his solar power proposal. Customers could pay only 2 cents extra on their monthly utility bills next year or 4 cents more in 2009, he said.

To achieve solar energy goals for the state, the legislation also encourages businesses and individuals to install solar panels on their properties. They could then sell excess electricity back to utilities. Garagiola said that Staples, an office supply company that testified in favor of the bill, has already pledged to install solar panels at some of its larger retail locations.

‘‘As more companies do this, the utility companies buy them and then everybody’s rates go down,” Garagiola said Friday. ‘‘So at the very least, more solar energy means mitigated rate increases” when Marylanders are facing another potential 50 percent rate hike by BG&E.

BP Solar in Frederick, which manufactures solar energy systems, did not return phone calls seeking comment.

Maryland established the Renewable Energy Portfolio Standard in 2004 to cultivate the economic and environmental benefits of renewable energy, establish a market for electricity from those resources, and lower the cost for electricity. The state also mandated that, by 2019, at least 7.5 percent of its energy would come from renewable energy sources, including solar power.

Liz Farmer of Capital News Service contributed to this report.