Maryland Gov. Larry Hogan this week announced an environmental agenda for the upcoming General Assembly session that asks lawmakers to approve new spending on clean energy, but also seeks to divert $10 million raised for sewage-treatment plant upgrades to instead jump-start the state’s stalled nutrient pollution trading program.
The Republican governor, in a press release and news conference in Annapolis, said he planned to invest nearly $65 million “to grow jobs in green industries, promote the use of electric vehicles, invest in renewable energy innovations, and promote clean water commerce.”
Of that sum, $41 million would go toward renewable energy projects, tapping a $44 million settlement that Hogan’s predecessor, Democrat Gov. Martin O’Malley, negotiated with Exelon when it merged with Constellation Energy, the parent company of Baltimore Gas and Electric. The money was to be spent on developing renewable energy.
The rest of the Exelon settlement will go to train 1,500 workers for jobs in solar, wind and hydroelectric industries, according to Hogan aides.
The other $21 million in investments includes $7.5 million to create a “green energy institute” in collaboration with the University of Maryland; $2.4 million for electric vehicle tax credits; $1.2 million for electric vehicle supply equipment rebates; and $10 million that would be diverted from the Bay Restoration Fund for use in the state’s water-quality trading program, which has been under development since 2007 but has yet to get off the ground.
The fund’s revenues come from so-called “flush” fees paid by Marylanders for being connected to municipal sewer systems or having individual household septic tanks. Lawmakers initially approved the fees in 2004 and increased them in 2012 to finance costly upgrades to the state’s sewage treatment plants.
In his announcement, Hogan said the diverted funds would still help clean up the Chesapeake. As Maryland Department of the Environment staffers have explained the proposed legislation to an advisory committee, the funds would be used to pay for “nutrient reduction credits” from farms, municipal wastewater plants and other facilities that have curtailed pollution more than required. The credits could then be sold or given to communities struggling to make costly reductions in stormwater pollution.
“This is a cost-effective, market-based solution that will allow the state to meet Chesapeake Bay watershed improvement goals by the year 2025,” Hogan said.
But some environmental advocates were skeptical.
“We’re taking money from something tangible to do something that is smoke and mirrors,” said Patuxent Riverkeeper Fred Tutman, a longtime trading opponent. “Trying to turn pollution over to the marketplace is a shell game. The incentives are always weighted in the favor of more pollution.”
Tutman has argued that trading encourages environmental racism, as companies and local governments have incentives to pollute more in less desirable places. Those on the winning end of the trades, he said, tend to be those in more affluent communities, who secure pollution-reduction benefits that are also aesthetically pleasing, like more open space and riparian buffers.
Del. Steve Lafferty, a Baltimore County Democrat, said he wanted more details about the green energy center at University of Maryland, which already has the Maryland Energy Research Center.
Lafferty, who serves on the state’s Water Quality Trading Advisory Committee, also said he’s skeptical that trading will work in Maryland. He noted that farmers have been reluctant to get involved so far. But, he said he was not surprised by the proposal, because Environment Secretary Ben Grumbles supports trading and has been looking to jump-start demand.
Lafferty predicted that the use of flush-fee funds for trading will be scrutinized in the session, which begins Jan. 11.
“You’re going to take money out of what might have been an upgrade of a major-minor sewage plant, or money to extend a sewer line,” he said. “That was not the initial intent of the Bay Restoration Fund.”
Lafferty added that he was glad the governor announced a set of environmental priorities, even if much of the money for them came from a previous administration’s effort. He called Hogan’s move “an interesting pivot” that could stem from uneasiness among the state’s citizens about environmental progress after the election of Donald Trump, who has been talking about rolling back environmental regulations and commitments to reduce greenhouse gas emissions.
But another possible motive may be more local: Democrats plan to vote early in the session on whether to override Hogan’s vetoes of 2016 legislation, including a bill that would have changed the state’s renewable portfolio standard from 20 percent by 2022 to 25 percent by 2020.
Mike Tidwell, executive director of the Chesapeake Climate Action Network, called the $3 million for renewable job training “almost laughable” in comparison to the renewable standard bill, which Tidwell expects will create hundreds and even thousands of permanent jobs. Tidwell said he expects the General Assembly to override the veto, as the renewable energy bill passed both chambers by wide margins.
Tidwell and other clean-energy advocates have scheduled their own press conference Thursday in Annapolis to drum up support for an override and for other clean-energy initiatives.
“The governor can’t have it both ways,” Tidwell said. “He can’t kill jobs with the stroke of his pen, and then propose he’s a job creator by putting a few dollars into a training program.”