The House Environment and Transportation Committee approved a sweeping energy bill Thursday that aims to reduce soaring utility costs by cutting energy efficiency offerings, reducing future rate hikes and restoring competition among suppliers.
It came quietly, one night before legislative leaders and Gov. Wes Moore (D) were scheduled to formally announce the joint legislative energy package they hope to usher across the finish line before the session concludes on April 13.
The package approved in committee Thursday evening will reach the House floor Friday, but significant debate will not take place until next week.
The behemoth of a bill, named the Utility RELIEF Act, is wide-ranging and touches on everything from data centers and solar energy to utility rate-making and energy-efficiency programs. It brings in proposals from the governor and numerous delegates, embedding them into a bill originally proposed by House Speaker Joseline Peña-Melnyk (D-Prince George’s and Anne Arundel).
It would also aim to entice electricity retailers to re-enter the marketplace to compete with the established utilities by allowing them greater flexibility on the contracts they can offer and prices they can charge.
A 2024 law, called Senate Bill 1, aimed to weed out bad actors in the consumer electricity marketplace who were using deceptive practices to trick consumers into paying higher rates. But it resulted in a virtual loss of the competitive market in Maryland, leaving consumers with no choice but to stick with their local utilities as rates climbed.
“In the short term, this [legislation] will reduce electric bills,” said Del. Marc Korman (D- Montgomery), the chair of Environment and Transportation.
It isn’t clear precisely how much Marylanders’ power bills would go down, but the RELIEF Act — which stands for Reducing Energy Load Inflation for Everyday Families —would likely have a near-immediate effect.
For example, it would decrease a monthly surcharge that Maryland customers pay on their power bills — which averages $15 to $20 a month — by temporarily shrinking the EmPOWER program that provides Maryland households with energy-saving upgrades such as weatherization and more efficient appliances. The new bill makes deeper cuts to EmPOWER than Peña-Melnyk’s original bill, which had raised concern from advocates for that reason.
Reducing the EmPOWER Program for the next three years drew intense criticism Thursday from environmental and consumer advocates, who argued that trimming the program could result in higher electricity demand in the future, which would require more power infrastructure — and higher bills in the long run.
Josh Tulkin, director of the Maryland chapter of the Sierra Club, said that environmental advocates believe the legislation would cut EmPOWER by up to two-thirds. And there isn’t clear data yet about how much the changes will increase energy demand, potentially raising bills in the future.
“We expect bills to go up, not down,” Tulkin said Thursday morning. “To say this is penny-wise and pound-foolish is an understatement.”
Speaking to the committee Thursday evening, Korman noted that the EmPOWER cuts were hard to stomach for Democrats in Annapolis, who crafted the program and still believe in its value. Some Republican proposals would have paused the entire EmPOWER program.
“Frankly, those changes are very difficult for people on my side of the aisle to do,” Korman said. “But we think it’s important to meet the moment, where people need some relief on their utility bills.”
The legislation would shrink the program by curtailing the greenhouse gas emissions reduction goal that the utilities must achieve each year. Gradually, the goals would return, reaching the 2027 goal in 2036 instead.
But the legislation also reduces EmPOWER in another way: By allowing the utilities to count community solar and rooftop solar in their territories toward their goals, instead of home energy improvements.
That change, which would also last three years, felt bizarre, Tulkin said. Other advocates agreed.
“The vote to allow community solar to somehow count towards EmPOWER means that we’re dismantling the state’s energy efficiency program, functionally,” said Emily Scarr, senior adviser with Maryland PIRG. “It means that Marylanders are more likely to have more energy waste in their homes and less access to EmPOWER programs that help bring down their bills.”
Notably, the bill would not allow utilities to build solar projects — something that Exelon utilities fought hard for, and convinced one Democrat in each chamber to propose.
Scarr, a consumer advocate, said the legislation overall has a lot of benefits to the ratepayer.
“They are dismantling our energy-efficiency program on what otherwise is a bill that has a lot of good ideas,” Scarr said. “It’s unfortunate that we’re fighting over this.”
The legislation would also pull ratepayer funding away from the DRIVE Act, which would have allowed aggregators to use batteries and other energy equipment at customers’ homes to reduce peak demand and increase the efficiency of the power grid. Implementing that plan, though, was expected to cost ratepayers $80 million, said Del. David Fraser-Hidalgo (D-Montgomery), chair of Environment and Transportation’s energy subcommittee, and the sponsor of DRIVE.
“It was my bill, and I’ve worked for years on it, but at the same time, we have to do it in a fiscally responsible manner. And given all the energy prices right now, now is not the time to get into that,” Fraser-Hidalgo said.
Legislators are effectively “gutting” the DRIVE Act, even though they arranged for some funding from the Maryland Energy Administration to keep it alive, said Tulkin, who opposes the changes.
The legislation would also quickly return $100 million to ratepayers, which they previously paid into a state clean energy fund. Last year, legislators returned $200 million and sent the money directly to ratepayers, as long as they weren’t in a condo or apartment complex that used a “master meter.”
This year, the $100 million would go to paying for the EmPOWER program, simply reducing the surcharge on customers’ bills by an even greater amount for one year. Moore proposed sending the $100 million directly to ratepayers once more, which would likely average about $40 per household.
Additionally, the bill employs a provision from Moore’s bill that would immediately save Maryland ratepayers $20 million each year. It would require local utilities to be a member of a regional transmission organization and bear the cost of membership. Previously, they could charge ratepayers for it.
Other provisions wouldn’t reduce bills directly, but would likely reduce future rate hikes.
The legislation would restrict utilities from raising rates using forecasted spending, rather than the actual costs they incur. Consumer advocates had pointed to the practice, a somewhat recent change to ratemaking procedure, as one reason for rising rates.
It would also prevent utilities that file for multiyear rate plans from coming back and asking for extra ratepayer dollars. But they could be compelled to refund customers if they underspent on infrastructure.
The bill would increase scrutiny on the construction of new power lines, bringing underground lines before the state’s utility regulator for the first time. That came from a bill sponsored by Del. Elizabeth Embry (D-Baltimore City), later backed by Senate President Bill Ferguson (D- Baltimore City), frustrated with an underground project in his district. The RELIEF Act also incentivizes utilities to consider other technical upgrades before building entirely new lines, using provisions from a bill by Del. Lorig Charkoudian (D-Montgomery).
Data centers, in addition to power plant retirements, have brought about the need for new transmission infrastructure. The bill would set some new guidelines for data centers in Maryland, encouraging them to use in-state labor and bring their own power generation or storage. None of those would be requirements, but new large loads on the grid, such as data centers, would be required to register with the Public Service Commission once they have a signed interconnection agreement to hook onto the grid, language drawn from a bill from Sen. Katie Fry Hester (D-Howard and Montgomery).
The legislation also brings in a proposal from the Senate, sponsored by Ferguson and Sen. Brian Feldman (D-Montgomery), chair of the Education, Energy and the Environment Committee, that would take the extra clean energy funds in the Strategic Energy Investment Fund and apply them to an auction to spur new solar energy projects.
The funds have accumulated, to the tune of hundreds of millions of dollars, because utilities have not purchased the required amount of renewable energy each year. In many cases, it was actually cheaper for them to pay “alternative compliance payments” into the fund. Advocates have pushed for the money to be used for climate and energy programming. But a significant amount would balance the state’s budget, at least under Moore’s proposal.
