The first few months of 2011 have given rise to a resurgence in federalism. States across the country are implementing their own legislation to circumvent onerous federal policies; ranging from immigration to environmental regulations. Red states, bolstered by fresh conservative governors and majorities in their legislatures, are asserting their power to mitigate the effects of odious federal initiatives. Unfortunately, blue states such as Maryland are using their unique jurisdiction to exacerbate failed government policies.
The Democrats continue to wage a pertinacious war on the taxpayer and consumer of energy. Socialists intuitively understand that energy in general, and fossil fuels in particular, are the lifeblood of the capitalist free market economy. While the federal government failed to pass a cap and trade bill, Governor Martin O'Malley plans to mandate that utility providers use 20% of their energy from 'green energy' by 2022. Electric companies are forced to purchase renewable energy credits and pay an alternative compliance payment. These mandates have already enshrined a perpetual hidden cost in the utility bills for Marylanders that has increased precipitously over the past few years.
Not satisfied with gratuitously hiking the cost of terrestrial energy production, O'Malley is now planning to levy a tax for the next 20 years to underwrite the construction of offshore wind farms. Last Thursday, the Maryland Governor promoted his wind tax before the House Economic Matters Committee, claiming that the charge to Marylanders' electric bills would only amount to $1.44 a month. His own Public Service Commission, however, estimated that the cost could approach $9.
Here is the Washington Post's analysis of the debate over the costs of this boondoggle:
"Under the governor's plan, utility companies would be required to buy wind power at one fixed price for at least 20 years. That price would be set by the state's Public Service Commission next year. The plan assumes that developers will be awarded federal leases late this year or early in 2012, that construction would begin in 2014 and that the first turbines would begin spinning in 2016.
According to cost modeling by the governor's office, which assumes the PSC signs a 25-year contract, Maryland pegs offshore wind costs when the power comes online at about 16.4 cents per kilowatt hour, or more than 60 percent higher than the rate at which most utilities in the state are buying power. Like Delaware, the model assumes the developer receives an annual price increase of 2.5 percent to cover inflation.
But Maryland's budget analyst says the governor's model doesn't factor in all of the costs. The analyst's report estimates an "effective rate" of 21 cents per kilowatt hour for Maryland offshore wind power in 2016, rising to 23 cents by 2040.'' (emphasis added)
It is impossible for any sane person to believe that a $9 monthly charge would be sufficient to permanently shoulder the burden of an energy project that will never result in an efficacious source of power. O'Malley might think that he is proposing a novel idea, but this taxpayer scam has already been tried at the federal level and failed miserably. Last year, the Wall Street Journal reported that even after billions of dollars of stimulus was used to completely subsidize the wind industry, it failed to stay afloat. According to the American Wind Energy Association (AWEA), new wind installations were down 72% from 2009. After hundreds of thousands of taxpayer funds were expended towards renewable energy projects, only 1% of our electricity comes from wind power.
Robert Bryce astutely noted in the Wall Street Journal last year that even wind guru T. Boone Pickens gave up on wind power after a 2 year-$80 million media campaign promoting it left him with "a slew of wind turbines that he can't use". No degree of hot air from Governor O'Malley can churn this wind project into a profitable proposition. It will make the high speed rail fiasco appear fiscally prudent in comparison and leave the Maryland taxpayers out in the cold.
What about the supposed job creation that will ensue as a result of O'Malley's wind fiasco? Well, according to Chris Horner of the Competitive Enterprise Institute, each job created in the renewable energy sector from the federal stimulus cost taxpayers $475,000! Maybe T. Boone Pickens has millions of dollars to waste on failed energy subsidies; most American consumers do not.
So why would Martin O'Malley saddle his taxpayers with an irredeemable energy chicanery? As is the case with all insidious government interventions in our free market economy, you have to follow the money trail in order to ascertain the true malevolence of their policies. Most Democrat politicians aren't credulous enough to believe the virtues of Keynesian economics, or the prudence of ineffective energy sources. Their singular focus is to finance their election campaigns in order to ensure the immutability of their political power. To that end, they have initiated a circuitous campaign finance scheme in which the power of lawmaking is used to enrich their corporate cronies.
Last week, Mark Newgent reported in the Washington Examiner that the husband of Democrat House Delegate Joseline Pena Melynk is a spokesman for Atlantic Wind Connection (AWC), the firm constructing offshore wind-farms off the Mid-Atlantic seaboard. Also, Michael Enright, a former chief of staff to O'Malley, is a managing partner with Beowulf Energy, which is a partner in Maryland Offshore LLC, one of the firms vying for a lease.
If that's not enough, O’Malley’s former communications director, Steve Kearney, is head of a political strategy firm which helped PEPCO (the southern Maryland electric company) lobby O'Malley's Public Service Commission for the Mid-Atlantic Power Pathway (MAPP). MAPP is the proposed transmission line that would transmit the power from the wind farms throughout the Mid-Atlantic coast. It is clear that for O'Malley, taking care of his former political associates trumps his regard for the taxpayers and consumers of his state.
Democrats always contend that a fair tax would regressively hurt those on fixed incomes and for whom vital services represent a large portion of their income. Unfortunately, the very same progressives are completely apathetic to the regressiveness of their campaign finance tax on the energy bills of that same demographic.
As we head into the 2012 election season, we must continue to expose the corporate cronyism that is so endemic in the destructive federal energy policies of the left. Maryland conservatives unfortunately must fight an insurmountable battle. Our federalist system allows every state to choose whether to repudiate or replicate the failed policies of the federal government on a local level. Maryland has chosen the latter. Americans all across the 50 states will have to vote with their feet. Those who remain in Maryland and other blue state oligarchies are now faced with the harsh reality that you get who you vote for.
Cross-posted to Red State.com
Cross-posted to Red State.com