April 23, 2024

BY ELECTRONIC DELIVERY

The Honorable Governor Wes Moore

Maryland State House
100 State Circle
Annapolis, MD 21401

RE: Veto Request on HB 1296 (SB 1161) – Electricity – Offshore Wind Projects – Alterations

Dear Governor Moore,

We write this letter today to urge you to veto HB 1296 (SB 1161) – Electricity – Offshore Wind Projects
– Alterations. This legislation was introduced following the January 25th decision by Ørsted to withdraw
from the offshore wind energy contract with Maryland and would allow the remaining offshore wind
development applicant off Maryland’s Coast, US Wind, to benefit from a generous financing package
financed by Maryland’s ratepayers.

THE COST TO THE RATEPAYER

HB 1296 provides three methods to increase the subsidies that benefit the offshore wind energy
developer and harm the ratepayer and taxpayer including 1) allowing the Offshore Renewable Energy
Credit - OREC 2 pricing to be changed up or down; 2) allowing the OREC 2 size to be reduced and
OREC 1 size to be increased; and 3) setting the ratepayer cap for OREC 1 at $1.50 more per month and
the ratepayer cap for OREC 2 at $0.88 more per month. US Wind’s sale price for OREC 1 credits is
$131.93 per OREC, and its price for OREC 2 credits is $54.17 per OREC. Therefore, all three methods
allow US Wind to sell more of the higher-priced electricity and less of the lower-priced electricity,
further burdening the ratepayer.

Additionally, results from other offshore wind projects have revealed that the business model for these
projects has fallen well short of projections to the degree that those wind energy developers are either
halting construction or asking the government for additional subsidies to make up for projected cost
increases. HB 1296 may be only the start of future actions to make Maryland’s offshore wind projects
financially feasible for the offshore wind energy developers but at the expense of Maryland residents,
taxpayers, and energy consumers.
There are additional factors that would increase the cost of energy to the ratepayer. Traditional power
plants must still be available to provide power whenever a Variable Renewable Energy Source (VRE),
like wind energy, cannot meet demand, meaning that two energy sources must be “on” when one energy
source previously sufficed. As we introduce more VREs to Maryland’s grid, this two-for-one situation
will continue to harm the ratepayer while providing less and less value to Maryland’s net-zero emissions
goals.

Since the passage of Maryland Offshore Wind Energy Act of 2013, the project plans and business model
for offshore wind energy development have met with multiple challenges and questions about the
detrimental impact on the local economy and tourism, the damaging effect on marine life, fishing and
the military, and the high costs for ratepayers and taxpayers. The project plans have had major changes
with the size of the turbines growing to four times the height of the tallest building in Ocean City to the
placement of the gigantic turbines as close as 11 miles from the Shore.

The Bureau of Ocean Energy Management’s Own Environmental Impact Study, released in October
2023, validates many of the concerns that Eastern Shore residents have had for years with BOEM
acknowledging “unavoidable adverse impacts.” The report points to high-impact hydraulic hammers
pounding the seafloor during three years of construction, increased risks of accidents due to changes in
navigational patterns, and “detectable, measurable, of severe intensity, and long-lasting or permanent”
negative impacts on marine life.

For these many reasons, from HB 1296’s generous financing package to offshore wind developers at the
expense of Maryland’s ratepayers to the multiple negative impact on the environment, marine life,
military, and local commercial fishing, boating and tourism industries, we respectfully urge you to veto
HB 1296 and take the time to reassess the true costs and benefits of offshore wind energy development
off Maryland’s Coast.

Respectfully,

Senator Jason Gallion Senator Johnny Mautz

District 35 District 37

Senator Stephen S. Hershey, Jr. Senator Mary Beth Carozza

District 36 District 38