ANNAPOLIS – Eastern Shore lawmakers braved the rain Wednesday to tell a House committee they support a tax credit for power plants using poultry manure as fuel, but Maryland chicken powerhouse Perdue Farms says it has a better solution.
Agriculture is the Eastern Shore’s largest industry, but the state needs an alternative way to dispose of manure produced by the region’s chicken farms, said Delegate Rudolph Cane, D-Wicomico.
Chicken farmers spread poultry manure in fields as fertilizer, but the nutrient runoff threatened the Chesapeake Bay. After 1997’s Pfiesteria outbreak in the waters of the bay, the General Assembly limited the use of chicken waste as fertilizer. Farmers had to look for alternatives to dispose of the litter.
The bill’s purpose is to make poultry litter power plants more competitive with fossil fuel plants by offering a credit to electricity purchasers, said Ed Sledge, an attorney with Hogan and Hartson.
“It costs more to produce electricity from poultry litter than from coal or gas,” he told the Ways and Means Committee.
A coal- or gas-produced kilowatt hour costs about 2.5 to 3 cents, but a poultry litter kilowatt hour costs about 8 cents, Sledge said. The tax credit is 4.5 cents per kilowatt hour. The tax credit for every five megawatts produced and sold would be about $1.68 million.
The bill could solve two problems, said Cane: It could spur companies to get rid of the poultry litter and create more electricity for a region that recently experienced a series of rolling brownouts.
Environmental groups have applauded the bill for proposing alternative power sources and addressing the manure problem.
Conventional and poultry-litter power plants both produce nitrogen, which threatens the bay’s health, said Theresa Pierno, executive director of the Chesapeake Bay Foundation. However, chicken-manure plants are less polluting, she said.
The state also must address the sheer volume of poultry manure, Pierno said.
The Maryland Department of Agriculture estimates the Delmarva Peninsula produces about 650,000-750,000 tons of litter each year.
Virgil Shockley, a Worcester County commissioner and bill supporter, said that’s too low.
“I raise 660,000 chickens a year, so I deal with the manure problem we’re talking about here,” he told the committee. And, based on the waste he deals with, many more pounds of litter are produced on the Eastern Shore.
Jimmy Spicen, a Dorchester County poultry grower, agreed it’s difficult to dispose of large quantities of manure.
“I don’t have any farmland to put my litter on,” he said.
The bill would limit poultry-litter-produced power to 60 megawatts, but 5 megawatts would cost the state about $1.7 million in lost revenue annually. If the full 60 watts is generated, the state would lose $20.4 million.
A rise in electricity costs would reduce revenue losses because the credit is programmed to vary with electricity prices.
Poultry-litter power producers would have to repay the state for the credits after they pay off the building costs.
Despite widespread support from Eastern Shore legislators, Salisbury-based Perdue Farms prefers its own a solution for poultry manure disposal.
Perdue Farms recently built a $12 million plant, scheduled to open in April, to convert poultry litter into fertilizer pellets. The plant will dispose of 10 percent of the state’s litter without relying on state subsidies, said Richard Willey, president of Perdue’s Grain and Oilseed Division.
“We can build as many as necessary to dispose of the excess litter,” he said, but he questions the state’s estimates of the excess.
Perdue Farms is critical of a $125 million plant proposed for Dorchester County by FibroShore, the U.S. division of the British company FibroWatt Inc. Many view the tax credit as an incentive for the company to build the plant there.
Willey urged the committee to support local companies like Perdue and champion “industry-led and commercially viable” solutions.
“We’re the home team. We’re very proud that we’re a Maryland company,” he said. “Don’t pull the rug out from under us.”
But Effie Elzey, a Dorchester County commissioner, asked the committee to support the bill and help the Eastern Shore counties, which are all One Maryland counties, address unemployment.
“In Dorchester County, we have double-digit unemployment,” she said, and the FibroShore plant would bring much needed jobs.