Maryland’s Governor Larry Hogan Pushes Back Against The Sunshine Tax

Larry Hogan emailed his donors and supporters to urge them to support his veto of the sunshine tax. The tax would generate $100 million in revenue from electricity companies.

Even though the program that Hogan’s vetoed does not impose a fee or tax on electricity ratepayers, it will increase utilities’ cost to buy electricity. Under the legislations, electricity companies would be required to increase the amount of wind, solar and other renewable energy they buy annually.

 

Maryland Governor Larry Hogan Vetos Sunshine Tax

 

The current legislation, which was written into law in 2004, requires electricity companies to acquire 15.6 percent energy from renewable sources. This amount will increase to 20 percent by 2022. The 2016 legislation would require electricity companies to buy 25 percent renewable energy by 2020.

According to a report released by Maryland Public Service Commission, in 2015, electricity suppliers and utilities spent $127 million to buy renewable energy. Many question whether they would have spent this much money on renewable energy, if they were not under threat of a penalty. Some of the energy would have most likely come from dirtier fossil fuel-based energy generation, because it is much cheaper than renewable energy.

Even though these costs are not charged to the ratepayer in the form of a fee or tax, they are incorporated in to electricity costs. According to the state Department of Legislative Services analysis, the vetoed program could have possibility increased the average customer’s monthly bill any where from 48 cents to $1.45.

In the future, cost will depend on the prices of renewable energy credits, which have fluctuated, but steadily risen over the past few years. Budget analysts expect the cost to range any where from $49 to $196 million in 2020 under the proposed legislation.

The General Assembly is expected to vote this week to possibly override the Governor’s veto.

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