In an effort to lower immediate costs for utility customers and developers, Maryland has scaled back its flagship energy-efficiency program and proposed eliminating renewable-energy and load-management requirements from the state’s commercial building code. But as weather extremes drive electricity demand to record levels and energy prices climb, consumer and climate advocates said the moves could make it even more difficult to meet the state’s pollution-reduction goals.
Critics argue that improving energy efficiency is one of the most cost-effective ways to lower electricity bills, while limiting the need for costly investments in power plants, transmission lines and other grid infrastructure. Cutting efficiency programs like EmPOWER Maryland and proposing to weaken commercial buildings’ energy codes may deliver modest short-term savings for households and greater flexibility for developers, but could drive up infrastructure costs and leave ratepayers with higher bills later.
EmPOWER, created in 2008, has played a key role in helping households and businesses save energy through rebates on efficient appliances, weatherization and free home energy audits.
The debate follows the heatwave over the July 4 weekend that pushed the regional grid operator PJM Interconnection’s peak load to a record high. On July 14, less than two weeks later, PJM, which serves more than 67 million people across 13 states and the District of Columbia, announced that its capacity auction for the 2028-29 delivery year hit the federally approved price ceiling of $325 per megawatt-day. It was the second consecutive auction to hit the price cap.
Altogether, PJM reported 149,182 megawatts of available capacity, while the auction’s estimated value was about $16.4 billion. Total capacity remained 6,831 megawatts below the grid operator’s reliability requirement.
Capacity payments are ultimately recovered from customers and are meant to compensate power producers for remaining available during periods of high demand. Energy-efficiency programs are meant to lower these costs over time by reducing overall electricity use and the power required during peak demand.
When the Maryland General Assembly passed the Utility RELIEF Act in its 2026 session, it cut EmPOWER’s annual energy savings target from 2.5 percent to 1.75 percent of kilowatt-hour sales beginning in 2027, then gradually ramped it back to its full target by 2036. The cuts will reduce the monthly surcharge customers pay to fund the program, which lawmakers say will produce most of the bill’s promised $150 in annual savings. The law preserves the program’s low-income efficiency initiatives administered by the Department of Housing and Community Development, and ends EmPOWER’s programs that incentivized natural gas use after 2026.
Measures installed through the 2023 programs are expected to deliver approximately $799 million in benefits over their lifetimes, compared with $362 million in investment costs, resulting in a net benefit of about $437 million, according to the Public Service Commission’s 2025 EmPOWER report.
The next program cycle, under the scaled back efficiency targets, will run from January 2027 through the end of 2029, said Justin Barry, director of energy initiatives at Green & Healthy Homes Initiative, a Baltimore-based nonprofit. Utilities must file their plans with the Public Service Commission by Sept. 1, and the commission will hold a public hearing at the end of October to review them before they take effect.
Barry said the program changes come when efficiency could help reduce grid stress, especially after PJM declared an emergency during the recent summer heat wave and capacity prices spiked.
“I don’t think the state has a clear and simple and overarching universal approach to energy,” said Josh Tulkin, director of the Sierra Club’s Maryland chapter. “The General Assembly goes this way, the governor goes another way.” Both the legislature and the Public Service Commission are “too narrowly focusing on one aspect of affordability at the expense of another,” he said, weighing “just the cost directly borne from programs and not the savings those programs are bringing.”
Over the past year, he said, “costs and affordability have been the primary driver of state policy at the expense of our climate goals, and … at the expense of longer-term affordability concerns.”
Meanwhile, at the end of June, the Maryland Department of Labor, which sets the state’s building codes, published amendments that would end the requirement for new commercial buildings to generate on-site renewable power and allow renewables and demand- management measures to count toward efficiency targets.
Under the current code, new commercial buildings are required to meet energy-efficiency targets and, separately, include some on-site renewable power and demand-management systems. State law requires Maryland to adopt the latest International Energy Conservation Code and to make its standards no less stringent than that. But the Labor Department’s summary says the change “removes the requirement for new renewable load management sections” of the model code and “maintains the renewable load management framework as an option.”
Buildings are among the larger sources of climate pollution in Maryland. Cutting back building energy codes and EmPOWER would weaken two major tools for reducing energy demand and emissions from existing and new buildings, just as the state’s 2023 Climate Pollution Reduction Plan projected only a 42 percent reduction in statewide emissions by 2031—well short of the required 60 percent reduction from 2006 levels under its Climate Solutions Now Act of 2022.
Representatives for Gov. Wes Moore’s administration said it is balancing immediate affordability concerns with the state’s longer-term energy policies.
“Governor Moore is focused on lowering energy costs for Maryland families while continuing to advance the state’s clean-energy goals,” said Ammar Moussa, the governor’s senior press secretary. He said the proposed building code updates “would adopt the latest national model codes” but “remain under public review and have not been finalized.” Moussa said the administration is investing $335 million in clean and renewable energy programs while implementing the Utility RELIEF Act “to deliver immediate relief while strengthening Maryland’s energy system for the long term.”
The Department of Labor did not address the specific concerns about efficiency or equity. Dinah Winnick, the department’s communications director, said in a statement that it is “currently accepting public comments regarding the proposed updates, including the range of possible interpretations, questions, concerns, and support.” She said that “upon the close of the public comment period, the department will review all stakeholder input and make determinations about any further changes or modifications.”
Erin Sherman, who leads building energy codes and regulations at the nonprofit RMI, said the amendments indirectly weaken efficiency. “The text of the changes appears as though it is primarily targeting those two things: solar and load management,” she said. “But the way that it targets those also undermines energy efficiency.”
A developer picks from several options to earn the required number of points for energy efficiency and for renewables and demand management separately, Sherman explained. Efficiency measures include things like better ventilation controls or reducing heat loss through the building, whereas on-site solar or systems that limit energy use when the grid is strained fall under the renewables and on-load management categories. The amendments would eliminate the separate renewable and demand-management targets and instead allow those measures to count toward the efficiency target.
Because a builder can now fulfill the efficiency requirement with solar or demand-management rather than actual efficiency upgrades, Sherman said, many will “install the solar that the code would have required anyway, and incorporate fewer efficiency features” because renewables are often the cheaper option. The result, she said, is that buildings built under the amended code would “use more energy on a gross basis” than the model code allows.
Sherman said the renewable-energy provision would have particular implications for data centers, which she said are covered by Maryland’s commercial building code because the state has not adopted a separate data center energy code.
The model code calculates the on-site renewable requirement based partly on a building’s floor area. Data centers “tend to be one floor and to have enormous footprints,” she noted, making the required renewable capacity comparatively large. Although on-site solar would provide only a small share of a data center’s electricity needs, Sherman said, the requirement operates as “a minor affordable bring your own clean power regulation.”
Del. Lorig Charkoudian, a Montgomery County Democrat who sits on the legislative committee that reviews proposed regulations, said the amendments appear to fall short of that standard.
“The way they set up the flexibility … the total impact will decrease the efficiency of commercial buildings,” she said. The change, she said, “would lead to higher bills for people, both in those buildings as well as overall,” because occupants of a less-efficient building “are inevitably going to pay more.”
Charkoudian said data centers are “not exempt” from the code but that she could not explain the department’s reasons for the change. Getting the code right, she said, is “a very important piece” of meeting Maryland’s climate targets under the Climate Solutions Now Act, which requires a 60 percent cut in greenhouse gas emissions by 2031 and net-zero emissions by 2045.
David Lapp, the Maryland People’s Counsel, said maximizing efficiency “whether through building standards or the EmPOWER program is one of the most effective ways to reduce energy costs” because “the less energy we consume, the less infrastructure is required. This means less utility spending and lower utility rates and customer bills.”
Reducing EmPOWER’s targets and changing the commercial building code involve trade-offs, Lapp said, providing “some short-term bill relief for ratepayers and flexibility for developers” while reducing longer-term energy savings.
The Maryland Building Industry Association is supporting the proposal. “We do not view the proposed codes as ‘loosening’ requirements,” said Lori Graf, the association’s chief executive. “We view them as adding some needed flexibility.” Graf said mandatory on-site renewable and load-management requirements “can add complexity and cost without providing equivalent benefits across all building types,” estimating $5 to $20 per square foot in upfront costs that are “passed onto the unit owner or renter” at a time of housing-affordability strain. She said new homes are roughly 30 percent more efficient than those built a decade ago, and that the code “is just a piece of” a larger framework that also requires grid and utility investment “keeping all options on the table, renewables and non-renewables.”
