Residents want energy investment money spent well

Friday, Aug. 22, 2008

Click here to enlarge this photo Staff photo by GARY SMITH Malcolm Woolf, Maryland Energy Administration director, leads a Southern Maryland town hall meeting Tuesday night to hear concerns from citizens about how money in the state’s newly created Strategic Energy Investment Fund will be spent, at the College of Southern Maryland. E-Mail This Article | Print This Story

Citizens told Maryland Energy Administration officials at a public meeting in La Plata Tuesday night that Gov. Martin O’Malley’s newly created Strategic Energy Investment Fund is generally a good idea but the state must spend money obtained from power plants for carbon emission allowances effectively, and address implications for ultimately higher energy rates.

The Strategic Energy Investment Fund is part of the Regional Greenhouse Gas Initiative, a cooperative effort by 10 northeastern and mid-Atlantic states to reduce carbon dioxide emissions from electricity-generating plants by auctioning credits for $2 or $3 per gallon of emissions they wish to produce. Maryland estimates it will reduce carbon dioxide emissions from the state’s electricity generators by roughly 10 percent from current levels by 2019, MEA officials said. The meeting at the College of Southern Maryland was one of five across the state to hear feedback from the public on how the $80 to $140 million a year from the credits will be spent.

The point of the pioneer program is to allow the state to make significant investments in programs that can lower Marylanders’ electric bills and greenhouse gas emissions without any impact on already tight state funds. It’s also part of the governor’s hard-line plan to decrease the state’s electricity demand — higher than many surrounding states — by 15 percent by 2015 and prevent blackouts slated to occur as early as 2011, said Malcolm Woolf, MEA’s director. The combination of rate relief initiatives and energy efficient outreach would save Marylanders about $9 a month.

But Central and Southern Marylanders at the meeting said plants that must purchase allowances might end up rolling that tens of million dollars they pay to the SEIF into their operating costs and it will be passed down to the consumer if not regulated, making the state’s goal of reducing costs for citizens obsolete. Rates have already risen from about 9.41 cents per kilowatt to 12.7 percent from February 2007 to February this year on average, Woolf said.

As it stands, about 46 percent of the SEIF will go to subsidize residential energy efficiency improvements with low rate loans to homeowners for energy-efficient structural upgrades, 23 percent will go towards residential rate relief in the form of moderate income energy assistance tax credits, and making Energy Star-rated appliances and products cost-effective. About 17 percent will be directed solely toward low-income energy assistance. About 10.5 percent will be geared toward outreach and education programs, climate change mitigation and renewable energy programs and 3.5 percent will be spent on the fund’s administration.

Some attendees said helping low-income families pay their energy bills is a positive initiative, but the state must crack down on landlords and provide incentives for them to make energy audits and improve properties, and get them to install meters that measure each apartment’s use, versus asking tenants to pay for utilities based on a building average, which gives tenants no incentive to conserve. The state should also provide energy audits for assistance recipients who may live in old, ‘‘leaky,” and energy-inefficient houses so money is not wasted, said Alex Hirtle, constituent aide to Prince George’s County Council Member Thomas E. Dernoga (D).

‘‘We should pay low-income bills up to a certain point, but only with an energy audit,” Hirtle said. ‘‘I’m also kind of sorry we’re only spending 10 percent on education. It’s so important. I ask that you spend the education portion wisely.”

Hirtle said many don’t know about simple changes like using compact fluorescent light bulbs, which make a public outreach and education program extremely important, particularly in public schools. Also important, if the state plans to mandate energy audits, is regulation of contractors who may try to rip off consumers and the government, Hirtle said. A local Energy Star rater said there should also be incentives for builders to build Energy Star-rated homes.

Judy Kosovich, who works for the Capital Sun Group in Montgomery County, which specializes in geothermal heating and solar power systems, and Brian Czarnowsky, an Anne Arundel resident who recently received a grant to install solar panels in his house, said more money must be directed toward grant programs to help residents front the high costs of making significant structural and appliance changes to their homes. The $590,000 allotted for the grants this year is already gone, Woolf acknowledged.

‘‘We ended up getting a grant but it’s still a burden for us,” Czarnowsky said. ‘‘I think that if prices were made more effective then the level of renewable energy would increase hugely. My neighbors say, yeah, I want to do that too, but then I tell them what it costs.”

Woolf said 50 to 60 people are already on the waiting list for the grants, made more generous on July 1 by the state, which gives up to $10,000 per home. The grant knocked $6,750 off the cost of the Czarnowski’s $27,000 system, which provides half of the power for their home. They also received another $2,000 from a federal tax credit and over the life of the system, the Czarnowskis could earn more by selling credits to utility companies that must buy a certain portion of their power from renewable sources, though the details haven’t been worked out. Woolf said one solution is allowing citizens to lease solar panels rather than buy them outright.

The MEA currently has a Jane E. Lawton Conservation Loan program that provides low-interest loans and grants for local governments, nonprofits and businesses, which Woolf encouraged attendees to check out on its Web site.

MEA officials said they would consider many of the viable concerns voiced at the meeting and asked them to submit further comments on its Web site, www.energy.maryland.gov.Ê

The first auctions for carbon emission licenses, which will fund the SEIF, are slated for Sept. 25.