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United States

Maryland legislature approves state renewables portfolio standard

By a wide margin, both chambers of the Maryland legislature approved a state renewables portfolio standard (RPS), which they sent to Governor Robert Ehrlich for his signature at the end of last month. The legislation requires electricity retailers to acquire green power credits to demonstrate they are providing 7.5% of sales from renewable energy resources by 2014. Retailers may trade credits among themselves, enabling those with shortfalls to buy credits from others with credits in excess. Although Ehrlich initially opposed the legislation, the indication is that he'll allow the law to take force because the bill was passed by a large and bi-partisan majority from each chamber and by the state's largest utilities, Pepco and Constellation Energy Group. The RPS sets a two-tier structure for renewables resources, with new and existing wind, solar and landfill gas in the first tier and existing municipal solid waste incineration and hydro in the second tier. Tier-two resources will be phased out of the RPS in 2019, by which time the entire requirement must come from tier-one renewables. The renewable energy requirement begins in 2006 and will ramp up one-half percent each year to 7.5% by 2014. Utilities must pay a "compliance fee" if they fail to meet the RPS targets. This is set at a relatively low $0.02/kWh for tier-one resources and $0.015/kWh for tier-two. At those levels it may interfere with prices that would otherwise be governed by the forces of supply and demand. No renewable energy credit trading is allowed between tier-one and tier-two resources. Because of wind power's potential influence on bird and bat habitats, the legislation also includes siting and operation criteria for wind turbines. The criteria are a first among US state RPS laws. Two wind projects are being developed in west Maryland. Clipper Windpower is proposing the 101 MW Backbone project and US WindForce, with partner Padoma Wind Power, the 40 MW Savage Mountain project.

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