Ehrlich Administration Kills Energy-Saving Program for Maryland Consumers

April 14, 2005

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

WASHINGTON, D.C. — A bill to reestablish energy conservation programs in Maryland to help households save energy, reduce their utility bills, and reduce pollution died in Annapolis earlier this week. The bill (SB 397, sponsored by Sen. Brian Frosh, and its companion, HB 490, sponsored by Del. Maggie McIntosh) would have established an "Energy Saving Investment Program" (ESIP) and was virtually identical to a measure that passed the Maryland Senate in 2004 with the support of the Ehrlich Administration.

However, prospects for the bill were seriously dimmed on March 1 when the Maryland Energy Administration (MEA) told a House committee that the Administration would only support the bill with weakening amendments. On March 23, MEA changed its position again by expressing full opposition to the bill. Coupled with vocal opposition to the bill from the Public Service Commission, MEA's reversal caused support for the bill to flag. Though an eviscerated version of the bill containing no new authority or funding for energy efficiency passed the House on March 28, it died in the Senate this week when it was concluded the bill was too weak to do much good.

"The Governor's about-face condemns Maryland consumers to pay ever-higher utility bills," Frosh said. "This turnabout makes no sense, since energy conservation is one of the few ways the state could have helped the average family control rising energy bills. The Administration's position is all the more hollow because of the failure of the Public Service Commission to carry out its responsibilities under current law to support energy conservation. My legislation sought to bypass the roadblock at the commission by charting a more pro-active course for the Maryland Energy Administration to mount energy efficiency programs with a stable source of funding."

Senator Frosh and Delegate McIntosh conceived the ESIP program to help Maryland families cope with today's high energy costs. By collecting small amounts on utility bills (less than 80 cents per month for the average consumer), ESIP would offer residential customers a combination of information and incentives for high-efficiency furnaces, air conditioners, appliances, and lighting, and high-efficiency new homes. These kinds of efficiency options would save participating consumers many times the small bill charges and hold down energy costs throughout the entire residential sector. Overall, customers would save over $900 million in energy bills over the life of the program, well more than the total funds collected.

"Why the Ehrlich Administration chose to move backwards on energy efficiency, when energy prices are at record levels, is beyond me," said ACEEE Deputy Director Bill Prindle. "Twenty states, led by Republican and Democratic governors, run ESIP-like programs, most of them more ambitious, all of them cost-effective and well-received. This reversal is astonishingly short-sighted."

Natural gas prices have doubled since 2000, driving up home heating bills; and gas-driven electricity market prices have also gone up, by about 30%. Since Maryland's utility markets have been restructured, small customers have experienced higher prices, with few if any competitive supplier choices. Restructuring was predicted to produce the opposite—falling prices and increased consumer choice. Given this unexpected development, the sponsors believed it was important for the legislature to help consumers compensate for these problems by offering them new ways to save energy.

In addition to helping Maryland families control their utility bills, ESIP would reduce air pollution and greenhouse gas emissions, reduce the risk of blackouts, and moderate future market prices. The failure of this bill ensures that Maryland's families will continue to pay needlessly-high utility bills, the state's air quality and climate protection goals will be harder to reach, and future energy prices will be higher than they have to be.