Senate reverses course on pollutants bill

Measure may boost cost of power plant

The bill could threaten a gas-fired power plant that Competitive Power Ventures Inc. of Silver Spring wants to build in Charles County, say company officials.

The Senate on Tuesday initially voted 25-21 to kill the bill, which is a key part of Gov. Martin O’Malley’s environmental agenda. Democrats bickered over how to divide auction proceeds between energy conservation initiatives and assistance for low-income electricity ratepayers.

But its revival Wednesday came after warring Democrats brokered a deal that dedicates more money from the greenhouse gas reduction program toward rate relief for the poor. O’Malley and environmental advocates wanted more to be put toward energy conservation, which they argued would save consumers more in the long run.

Maryland joined the Regional Greenhouse Gas Initiative in April. It aims to curtail the emission of pollutants in the Northeast and mid-Atlantic region that cause global warming. The state expects to raise $140 million annually through the auctions to spend on programs that cut energy use and boost renewable electrical generation.

The Senate’s approval came amid warnings from Competitive Power that the program, which requires utilities to purchase credits for emissions that can then be traded at auctions, could severely hamper or even scuttle plans for its 640-megawatt gas-fired power plant in Charles County.

CPV announced in July plans to build the $400 million generating station on the same 77-acre site in Waldorf as the aborted Kelson Ridge power plant project, which collapsed in the wake of the 2001 Enron corporate accounting scandal.

CPV’s lobbyist, John A. Andryszak, told the Senate Finance Committee last week that the proposed greenhouse gas regulations would cost the company an additional $150 million over 20 years, threatening the financial viability of the plant, CPV St. Charles.

‘‘It is true that the ... regulations would add a severe additional burden to finance what would be one of the cleanest natural gas plants in the country,” said Sharon K. Segner, project director for CPV St. Charles. ‘‘It raises real concerns and we’re working with leadership to find a solution.”

Construction is slated to begin next year and be completed as early as the summer of 2011, she said.

The company will continue to work with the Public Service Commission to draft an amendment that would allow more emissions credits when energy reliability is a concern, a CPV spokesman said.

Legislators need to be mindful of the state’s future energy shortfalls, said Dereck E. Davis, chairman of the House Economic Matters Committee.

‘‘I understand the immediate attractiveness of providing some kinds of immediate rate relief to consumers,” but reducing energy consumption and promoting efficiency are critical long-term goals, said Davis (D-Dist. 25) of Upper Marlboro.

Member states of the greenhouse gas initiative have developed a regional strategy for controlling pollutants, but because Pennsylvania, Virginia and West Virginia have not signed on, projects in Maryland are at a competitive disadvantage with those in neighboring states that needn’t adhere to the guidelines.

Lawmakers said they remain willing to work with CPV to ensure the plant moves forward, but stopped short of guaranteeing an exemption from the initiative that the company sought.

‘‘I can’t blame them for trying to reduce their costs, but if you’re going to exempt them you’re going to have to exempt others,” said Sen. Thomas McLain Middleton (D-Dist. 28) of Waldorf, who chairs the Finance Committee. ‘‘It’s a fairness issue.”

Offering exceptions would have significantly weakened the bill and created a precedent for other companies to seek immunity, critics said.

By seeking the exemption, CPV is reneging on its pledge to comply with environmental requirements, said Johanna E. Neumann, state director of Maryland Public Interest Research Group.

‘‘They proposed the project when [the greenhouse gas initiative] was coming down the pike and now they’re trying to backtrack and get carved out,” Neumann said. ‘‘It’s an empty threat.”

CPV St. Charles remains very significant to Charles County and the state, and it requires that lawmakers take a hard look at any legislation that could affect the plant, said Del. Sally Y. Jameson (D-Dist. 28) of Bryantown.