The Hypocrisy of the Environmental Industry
Old friend Tom Pelton, a former environmental reporter activist has returned to the pages of the Baltimore Sun to critique Governor Hogan’s water quality trading proposal that provides a market-based plan to help Chesapeake Bay restoration efforts. Pelton is now the communications director of the Environmental Integrity Project.
Pelton’s three main beefs with water quality trading are that this “Wall Street approach”
- Benefits favor wealthier rural residents over low-income urban residents;
- It allows companies a type of medieval indulgence to pollute;
- The public is shielded from knowing who is trading the pollution credits.
Pelton’s criticisms sound rather familiar. And they are because they are the same criticisms Red Maryland has raised about Maryland’s renewable energy portfolio standard (RPS) mandates that Pelton and his employer the Environmental Integrity Project enthusiastically support.
Vastly expanded under former governor Martin O’Malley and the Democratically controlled legislature, the RPS mandates that Maryland utilities purchase 25% of their electricity sales by 2022. The usual suspects are seeking to raise it again this year to 50%
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The utilities pass the cost of this mandate to ratepayers. The legislature’s analysts concluded the cost to ratepayers could be as high as $196 million.
The mandates in the law (particularly for solar) along with taxpayer subsidies and tax benefits allow wealthy suburbanites to install solar panels on their roofs. The energy they use to power their homes qualifies as a credit they can sell to the utilities, who then use it to satisfy the RPS annual requirements.
Meanwhile, poor urban residents are stuck paying higher utility rates to subsidize a wealthy liberal’s virtue-signaling status symbol.
If you think BGE and PEPCO are out there building solar and wind farms to meet the RPS mandates, you’d be wrong. The credits are unbundled, which means there is no actual electron or energy tied to the credits purchased by the utilities to satisfy the mandate.
The utilities satisfy the mandate not by creating new renewable energy, but by buying credits from existing generators like the well-heeled suburban solar panelist and out of state energy companies.
According to the Maryland Public Service Commission, in 2015 nearly 90% of the non-Solar Tier 1 credits used to comply with the mandate were purchased outside Maryland at a cost of $75 million to Maryland ratepayers. After nearly a decade of the RPS renewable energy sources such as solar and wind account for a tiny fraction of in-state renewable energy generation. According to the United States Energy Information Agency, wind and solar energy accounted for less than two percent of Maryland’s total electric power generation.
Yet Maryland ratepayers have paid hundreds of millions of dollars in corporate welfare over the last decade to subsidize wealthy solar customers, and out of state energy companies.
Similar to the lack of transparency concerning the transacting parties Pelton decries in Virginia’s water quality credit program, the Maryland Public Service Program, which administers the RPS program denies public viewing of the compliance reports submitted by utilities (as they would disclose the owners of the credits) because they contain “confidential financial information”
Of course Wall Street’s massive interest in renewable energy and the trend of securitizing of renewable energy into financial derivatives is of no concern to Pelton and the Environmental Integrity Project. Pelton and the Environmental Integrity Project would like the public’s knowledge of the transacting parties in RPS trading to remain opaque because one of their donors, The Energy Foundation, receives a large chunk of its funding from Sea of Change, a shadowy Bermuda based donor corporation.
The principal funder of Sea of Change just happens to be a billionaire hedge fund manager, who is heavily invested in renewable energy.
The Wall Street and the big money boogeyman is a convenient villain for environmentalists like Pelton, to attack policies they oppose, except when Wall Street is backing the policies they favor.