Lawmakers approve energy reform bills aimed at cutting rates, boosting in-state generation
Senate Education, Energy and the Environment Chair Sen. Brian J. Feldman (D-Montgomery) on the floor of the Senate Monday, the last day of the 2025 General Assembly session. (Photo by Bryan P. Sears/Maryland Matters)
The General Assembly's energy package didn't quite come down to the wire, but it was close.
With about 10 hours remaining in the 90-day legislative session, lawmakers gave final passage to a trio of energy reform bills focused on increasing the state's power generation and curbing electricity and gas rate increases with new regulations for utilities.
The measures, backed by House and Senate leaders, come amid rising electricity costs for Marylanders. Senate President Bill Ferguson (D-Baltimore City) said Monday he is 'very confident' that Gov. Wes Moore (D) will sign the bills.
'It's probably the biggest investment in the energy marketplace here in Maryland to protect ratepayers — to protect Marylanders — in probably a decade or so,' Ferguson said after the bills cleared their final hurdle.
Republican senators renewed arguments that the legislation doesn't do enough to lower bills — or encourage new gas-powered generation.
'We were tasked with something this year,' said Sen. Stephen S. Hershey (R- Upper Shore). 'The General Assembly fell woefully short in trying to protect Maryland ratepayers.'
One part of the package is the 'Legislative Energy Relief Refund,' which will send the average Maryland household about $80 worth of refunds next year, with one payment in the summer and another in the winter. The size of the refund will depend on a customer's energy use.
House, Senate ratify budget compromise on final day
Hershey called the two $40 rebates 'paltry,' and argued that they represent 'overpayments from the policies that we created.'
The money is coming from 'alternative compliance payments' made by utilities in lieu of complying with the state's renewable energy laws, money that typically goes to energy efficiency projects like lighting upgrades or solar panel installation.
The cornerstone bill of the package, the Next Generation Energy Act (HB1035/SB937), began with a focus on increasing energy generation in the state. It eventually became the vehicle for a number of provisions lifted from other energy bills, however, including canceling renewable energy subsidies for trash incineration, requiring utilities to justify spending on new natural gas pipelines and a state procurement process for new nuclear energy.
The final version of the bill also incorporated House amendments to require that utilities demonstrate 'customer benefits' in order to earn a multiyear rate plan, which lets companies set rate increases for several years at once. The Senate had simply required that the plan be in the public interest.
'These groundbreaking changes to utility regulation are a massive victory for all Marylanders,' said Emily Scarr, senior adviser at Maryland PIRG. 'By reining in wasteful spending by BGE and other Maryland utilities, these new consumer protections will save Marylanders hundreds of millions of dollars.'
Other bills in the package created uniform standards for solar energy projects (HB1036/SB931) which proved controversial with Republicans, and established a state office focused on energy planning (HB1037/SB909)
Some environmental and ratepayer advocacy groups applauded passage of the package Monday.
In a news release Monday, Brittany Baker, Maryland director of the Chesapeake Climate Action Network, said the finalized Next Generation bill 'is significantly improved from the bill as introduced.'
CCAN and other environmental groups had originally opposed the Next Generation bill, amid fears that its 'fast track' for new Maryland-generated power would grease the skids for natural gas burning power plants instead of renewable energy. Baker said the final bill 'gives new gas next to nothing while giving battery storage specific, time-bound financial support.'
The bill sets a goal of 150 megawatts of battery storage, and requires utilities to submit plans for reaching their share of that goal.
The package does include an expedited permitting process for up to 10 'dispatchable' energy projects, which must meet certain criteria for dispatching energy to the grid when called upon, and must have a lower greenhouse gas profile than coal or oil. The bill requires that zero-emissions projects get the fast track over others at a ratio of 4-to-1.
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Hershey argued Monday that the bill should have taken further steps to incentivize gas plants.
'Did we go far enough to really incentivize somebody to come in and make that investment? And a number of us are hearing: No, we really didn't. We might have expedited the process, but we really didn't,' Hershey said.
House amendments also sought to address concerns from environmental groups about loosened power plant permitting requirements. Environmental groups had expressed particular concerns about the bill shortening a preapplication period to 45 days, during which the new facility's operator notifies the surrounding community before it files an application with the Public Service Commission to build the power facility.
Under the amended bill, if the power project is bound for an 'overburdened and underserved' community, the preapplication period will be 90 days. Susan Miller, a senior attorney with Earthjustice, said she believes the 90-day rule should apply no matter what.
'All Marylanders deserve the same procedural protections, particularly when the Commission will be considering projects which will pollute their neighborhoods for the next 30 years or more,' Miller said in a statement.
GOP senators took issue with changes to the bill that they argue opens the door for data centers and other commercial facilities to secure one-on-one agreements for energy that are harmful to ratepayers. Unlike the Senate bill, the House bill allowed those contracts. But it stated that if they shift extra costs 'inappropriately' onto ratepayers, regulators can compel the commercial customer to pay it back.
'The largest provider of electricity in the state now is subject to being … able to go to one customer, one private-sector customer, and say: 'We're going to sell directly to you.' Isn't that a concern for ratepayers?' Hershey asked.
Sen. Malcolm Augustine (D-Prince George's) said the direct-power agreements are 'not monolithic,' and the new provisions would give more flexibility to the Public Service Commission, which regulates utilities.
'This is seeking to find more of a middle ground and some flexibility, but with the guardrails that are there,' Augustine said. 'But you're absolutely right: There have been concerns about taking off baseload power from our grid.'
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