State lawmakers debate game-changing climate bill

Business groups strongly oppose initiative


HOLLYWOOD, Md. (March 3, 2022)—It is not unusual that environmental groups and business organizations wind up on opposite sides of an issue. But a bill now being considered in the Maryland General Assembly has created an unusually wide fissure.

It's nicknamed "The Climate Act," but officially Senate Bill 528 is called "The Climate Solutions Now Act of 2022." ( mgaleg.maryland.gov/2022rs/bills_noln/sb/fsb0528.pdf )

The bill's synopsis says: "Requiring the state to reduce statewide greenhouse gas emissions through the use of various measures, including the alteration of statewide greenhouse gas emissions goals, the establishment of a net-zero statewide greenhouse gas emissions goal, the development of certain energy efficiency and electrification requirements for certain buildings, and requiring electric companies to increase their annual incremental gross energy savings through certain programs and services; etc."

The bill would put the state at the head of the class in fighting Global Warming, setting goals even stricter than those advocated by the Biden Administration and the Paris Agreement.

The bill is sponsored by Prince George's County Sen. Paul Pinsky and has 27 cosponsors including Senator Michael Jackson (D: District 27), who represents the northern part of Calvert County.

The bill is the darling of state environmental groups, who are strongly pushing for it. One is the Bay's largest advocacy group, the Chesapeake Bay Foundation, which in testimony on the bill touted its own green building headquarters in Annapolis.

Another environmental group, Maryland Climate Action, said, "We must set bold climate goals, and have a plan to meet them!"

The Maryland Chamber of Commerce Government Affairs Office issued a call to action.

It said, "Senate Bill 528 (is) a proposal that will drive up the cost of energy and phase out the use of existing energy sources."

The missive went on to say: "This dangerous and burdensome legislation includes:

• Setting an unachievable State greenhouse gas (GHG) reduction goal of 60 percent reduction by 2030 and ultimately reaching net-zero emissions by 2045 That's an increase in the current 2030 goal by 20 percent and a net-zero reduction five years ahead of the current schedule

• SB 528 requires the adoption of new building standards for the total phase out of the use of fossil fuels in water and space heating by 2030 for the construction of new buildings

• Mandates a 40 percent GHG reduction goal for all commercial buildings by 2035 and net zero emissions by 2040

• Owners of commercial buildings are required to measure and report GHG emission to the Maryland Department of the Environment (MDE) beginning in 2025.

The state chamber concludes: "SB 528 mandates the total phase-out of energy sources such as propane, heating oil and natural gas for residential and commercial buildings by 2040. These types of energy policies have drastic cost implications for Maryland businesses and consumers and saddle our state with a competitive economic disadvantage to others in the region.

"Instead of creating new and additional burdens for Marylanders, politicians in Annapolis should focus on finding ways to ensure our state achieves its existing and attainable GHG goals—not moving the target and driving up the costs of energy further."

Theresa Kuhns, vice president of Government Affairs for the Southern Maryland Association of REALTORS® supplied the following testimony on the bill by their state association:

"Maryland REALTORS® are committed to advocating for Maryland private property owners' rights and acknowledge there is a need to balance climate mitigation with the growing challenge of affordable housing. We are concerned that SB 528 will impact housing costs of some multi-family housing as well as new construction. Maryland is currently estimated to have a housing undersupply of over 80,000 units which includes both for sale and residential rental property. Moreover, according to the 'Maryland Housing Needs Assessment and 10-Year Strategic Plan (Needs Assessment),' Maryland will be adding 178,000 new households between 2020 and 2030. The needs assessment also estimates that in 2030 more than half of all new households in Maryland will qualify as low-income. As the requirements for new additional units expand to meet the eventual net-zero requirements, the cost impacts on new residential housing are unclear. While costs today would certainly impact affordability, it is unclear how technology will change in the next 15 years. It is also unclear what sources of energy will provide the electric generation that will be needed for housing and transportation. In addition to residential impacts, HB 528 will impact 17,000 Maryland commercial buildings which have struggled during the global pandemic. Commercial lending volume decreased approximately 60 percent in 2020, and it is important to note, lender losses in the commercial sector exceeded those of the 2008 financial crisis. National economists also predict short-term price declines for retail, office, and hotel properties of 4-7 percent. The unknown of the commercial recovery from Covid must be considered particularly as it is affected by retrofit requirements. The upfront costs to construct a net-zero commercial building can be up to 15 percent more than conventional construction. A combination of increased construction costs and decreased lending availability will pose challenges to many projects including adaptive reuse of existing structures, which remains an important component of smart growth. While Maryland can continue to be a leader in Climate Change legislation, advancing net-zero requirements for buildings by 2045 will make this job more costly and impact both residential and commercial property affordability. For these reasons, the REALTORS® recommend an unfavorable report."

Sen. Jack Bailey (R-Dist.29) said the 15 Republican senators in Annapolis were actively trying to either stop the bill or amend it.

"We want to at least make it more palatable and not cost our constituents so much," Bailey told The County Times.

There was one bill in the Senate but there were several such bills of a similar nature in the House, Bailey said.

"It seeks to mandate the complete phase out of energy sources such as oil, natural gas and propane in residential homes and commercial buildings by 2040," Bailey said of SB 528. "It also prohibits any board of education from entering into a new contract with a school bus provider that's not electric."

That restriction would take effect by 2024, Bailey said, and school systems would have to act now to bring in any new buses before the deadline that still ran on fossil fuels.

The bill would also instill strict caps on greenhouse gas emissions that would take effect five years earlier than current legislation demands.

"These new regulations negatively affect all small businesses by increasing electricity costs in the short term and increasing surcharges on small businesses on an ongoing basis," Bailey said. "With the recent 27 percent increase from SMECO our cost of living is already very high.

"This will make it more difficult for everyone especially young families who are just starting out."

Frank Taylor, president of Taylor Gas Co. Inc., which serves customers throughout Southern Maryland, said the legislation under consideration puts a stark division between his company—and other family-owned businesses that provide energy—and those seeking the bill's passage.

"It seems like we're singled out as the villains in this play," Taylor said. "To generate electricity, it takes fossil fuels.

"If we're all electric (an eventual goal of the bill) and the grid goes down or we're subject to a cyberattack we're left in the dark without any options."

Taylor said the bill was ill conceived and essentially made an attempt to put energy providers like Taylor Gas out of business in just a few years.

"I don't think they're thinking it through," Taylor said. "We're an integral part of the community, we want to have a clean Earth just like everybody else.

"But with this bill, if you're not electric you're being singled out."

Taylor was also critical of the accelerated time frame the bill pushed for conversion away from all fossil fuels in Maryland.

"It would be like turning a battleship around in a bathtub," Taylor said.

The fiscal note on the bill prepared by the Department of Legislative Services concedes significant impact of the bill on the state's small businesses. It says: "Although a reliable estimate of the bill's impact on small business cannot be made at this time, the impact to small business is meaningful.,"

It goes on to list some of the effects: "Businesses involved in the provision, institution and maintenance of fossil-fueled water and space heating equipment are significantly affected by the bills changes to MBPS (Maryland Building Performance Standards) for new buildings. These provisions also affect companies that sell fuel for this type of equipment, such as heating and propane companies. Other small businesses, such as those contracting new buildings or renovating existing buildings, incur additional costs to comply with the bill's energy efficiency and solar energy provisions."

Kuhns, who is among a cadre of representatives of business organizations working against the bill, said she is expecting amendments to the bill soon. It is expected to be debated on the Senate floor on Friday, March 4.

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