Maryland finds a more just & politically durable way to fund offshore wind

In this episode, Maryland state Delegate Lorig Charkoudian, author and primary sponsor of the state’s newly passed Promoting Offshore Wind Energy Resources (POWER) Act, shares about the exciting policy innovations embedded in the ambitious bill and what they have the chance to accomplish.

(PDF transcript)

(Active transcript)

Text transcript:

David Roberts

Maryland was one of the first states in the US to see the potential of offshore wind energy. It passed its first offshore wind bill in 2013, and another supportive bill in 2019, but a few weeks ago, the Maryland General Assembly passed, and newly elected Democratic Governor Wes Moore signed, a bill that dwarfs both of those predecessors.

Whereas the state’s previous target was 2.5 gigawatts of offshore wind energy, the Promoting Offshore Wind Energy Resources (POWER) Act targets 8.5 gigawatts.

But that is just the headline. Underneath that target are clever new policy innovations that promise to make the funding and development of offshore wind energy more politically resilient and economically just for the long term, and to bring thousands of offshore-wind supply-chain jobs to the state. And the whole process is going to be turbocharged by the tax credits in the Inflation Reduction Act.

I love me some clever policy innovations, so I was eager to talk to the bill’s author and primary sponsor, Delegate Lorig Charkoudian, about who will pay for the new offshore wind, the transmission backbone that can help accelerate development, and the high-paying union jobs that will be created by the industry.

All right, then, without further ado, delegate Lorig Charkoudian. Welcome to Volts. Thank you so much for coming.

Lorig Charkoudian

Thanks for inviting me. It's a thrill to be here.

David Roberts

I love a good policy talk. I love a good policy.

Lorig Charkoudian

Me too.

David Roberts

And this Maryland bill is a delight, so I'm excited to get into it. The first thing to say is promoting offshore wind energy resources where you get "power" as an acronym. Just well done, good acronym work. I don't know who on your staff is responsible for that, but I love a good acronym.

Lorig Charkoudian

And I have to say the advocates always give me a hard time because I write brilliant policy and then I have terrible names. So on this one, Jamie from Chesapeake Climate Action Network came up with a name, and they were key on getting the bill passed too.

David Roberts

Awesome.

Lorig Charkoudian

That worked out well.

David Roberts

The Power Act. So before we jump into this, this is a bill about offshore wind in Maryland. Just to set everybody's expectations. Before we jump in, though, I want to back up a little bit and talk about offshore wind in Maryland. My understanding is that Maryland passed its first offshore wind bill in 2013, and then there was another bill in 2019. And yet, as far as I'm aware, there is no operating offshore wind off the coast of Maryland. Why is that? What's gone on in the history of this industry in this state that there's kind of so much hype and so little actual wind turbines?

Lorig Charkoudian

Yeah, well, it's a real challenge and it's kind of the story of renewable energy the challenges of renewable energy and offshore wind in a lot of places. So we were first out of the gate in 2013, one of the first on the East Coast, and then we had a couple of things happen. And so first we had the — Ocean City fought really hard against having the wind actually built. The Hogan administration really pandered to the Ocean City opposition. And so there were a bunch of sort of slow walking things that happened at the Public Service Commission.

David Roberts

You got nimbied.

Lorig Charkoudian

Yes. So you've heard that before. So we had that going on. And then that ran into the Trump administration and all the things that were going on at the federal level and BOEM and slowing things down from that perspective. And then all of that ran into the buzzsaw of PJM and the interconnection queues and slowing everything down from that end. And then we hit the pandemic and supply chains.

David Roberts

Well, you really hit the perfect storm of all the things wrong with renewable.

Lorig Charkoudian

Energy, everything that could go wrong. But I'm happy to say that those projects are really back on track now, so we expect to see them in the next couple of years. And a lot of things that we have in this bill set us up so that the various delays, transmission in particular, PJM, interconnections, that those don't become the barriers going forward. Got it as disheartening as that has been, all that's going forward now, and we learned from the last ten years and set ourselves up for success on this bill.

David Roberts

Right, so there's construction underway offshore, or what stage are the current projects at?

Lorig Charkoudian

Well, yes, some construction. And the really exciting thing just when we keep in mind that offshore wind is not only a really important renewable energy resource, but it's also a really important economic driver and a manufacturing on the manufacturing side, Tradepoint Atlantic, which is where Bethlehem Steel was for years and years and years. And the closure of that just really decimated the community and the economy. So in that same place now, Sparrows Point Steel, US Wind has a factory they're building, Ørsted just broke ground on a factory they're building. And so we can see it sort of starting, things starting to happen actually in the ocean.

But we're also seeing the beginnings of manufacturing coming back. And really importantly, those are union manufacturing jobs. And when we get to talking about the policies, getting the labor policies right within the legislation is key, but we're starting to see those jobs coming back. And so there are things happening on the ground and in the ocean now.

David Roberts

All right, we're going to get back to that union stuff for sure. But first I want to sort of set the stage for the innovation in your bill by talking about the previous offshore wind bill. So the Clean Energy Jobs Act of 2019 was generally, I think, great, overall a positive, but it created some conflict between clean energy proponents and ratepayer advocates. And the reason for this is that the bill basically paid for the new offshore wind with what are called ORECs. I'm sure that sounds completely obscure to 99% of the listeners. So maybe explain what is an OREC and why did that mechanism lead to that conflict?

Lorig Charkoudian

I actually want to put it in a little bit of context because I do think it's important whenever we're talking about subsidies, which we're going to talk about now for a little bit, an offshore wind. Whenever we're talking about subsidies for renewables, I think it's important to remind everyone that we have been subsidizing and continue to subsidize fossil fuels for over 100 years. And that's really important. And the other really important thing to highlight about it is that those subsidies for fossil fuels are in all different kin