Gov. Wes Moore (D) signed 181 bills into law Tuesday, including two that one supporter called “the most substantive energy affordability package that Maryland has seen in several decades.” It came just days before steep rate hikes are set to take effect. (Photo by Bryan P. Sears/Maryland Matters.)
Days after vetoing an energy-focused bill backed by General Assembly leadership, Gov. Wes Moore (D) signed two others into law Tuesday.
The larger of the two bills, called the Next Generation Energy Act, aims to increase in-state power generation and battery energy storage, while curtailing costs for consumers by limiting how utilities can spend ratepayer dollars.
The second bill, the Renewable Energy Certainty Act, creates uniform siting standards for commercial solar farms in Maryland, in some cases overruling local jurisdictions that had sought to restrict the farms with zoning rules.
Senate President Bill Ferguson (D-Baltimore City) said the bills make up “the most substantive energy affordability package that Maryland has seen in several decades.” But the new measures come less than two weeks before an expected June rate hike hits.
Prices for Baltimore Gas and Electric customers are estimated to jump $16 per month, and customers of other utilities could see similar increases, according to a report from the Maryland Office of People’s Counsel, which represents ratepayers in the state.
The People’s Counsel in April asked the Federal Energy Regulatory Commission to intervene, an appeal echoed in a letter Tuesday signed by 87 Maryland legislators. Their letter argued that the energy auction last year that sparked this summer’s rate hike was flawed.
Ferguson, for whom energy policy was a focus this past session, said that sky-high energy bills over the winter months were a “wake-up call” that spurred the legislature to action.
“We know that older coal plants and oil plants are being retired based on private action, and we have not built up enough alternative energy to fill it fast enough. And so the General Assembly had to act this year,” Ferguson said.
He sponsored the Next Generation Energy Act, which was focused on power generation but became the vehicle for a number of energy proposals, on everything from trash incineration to natural gas infrastructure spending.
The law also pulls about $200 million from a state fund that collects payments from electricity suppliers who cannot meet the state’s renewable energy mandates and redirects the money to refunds for ratepayers. The rebate will average about $80 per household, split between two payments: one this summer and the second in the winter months.
Legislators push back against June rate hike
Some officials, including Maryland People’s Counsel David Lapp, blame multi-state electric grid operator PJM Interconnection for the coming rate hikes. They say that when PJM held a capacity auction last year, it did not include the power expected to be generated by two fossil fuel powered plants it was requiring to stay open, driving prices at auction higher.
Not only will ratepayers pay the high auction prices for power, they will also pay a premium to keep the two Talen Energy plants — Brandon Shores and H.A. Wagner — operating. PJM has already pledged to change its auction policies to prevent a similar situation in the future.
In the meantime, Lapp in April petitioned FERC to reject the cost increases for ratepayers. On Tuesday, the 87 legislators joined the chorus, urging FERC to reject the costs as “unjust and unreasonable.” The Maryland Public Service Commission also backed Lapp, filing its own comments with FERC on Tuesday.
“Without Commission action, customers still will be stuck paying ‘twice’ as a result of last summer’s auction,” the lawmakers’ letter said. “The Commission must act expeditiously to acknowledge and remedy the problems.”
Lawmakers also called on FERC to “protect Maryland customers from having to pay for windfall profits — far above the costs of service — to Talen to keep its Baltimore-area plants online.” Their letter said the two plants could keep running at a cost of $97 million, but consumers will be charged $180 million.
Ballot referendum campaign is a question mark
Last week, a group calling itself the Maryland Environment Labor and Industry Coalition filed as a ballot issue committee with the state, indicating it intended to challenge the Next Generation bill via referendum. But a representative for the group said that was looking unlikely after Tuesday’s signing ceremony.
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“I would bet that they will not go forward with the referendum, and instead work closely with the governor and legislature to promote responsible environmental and labor-friendly laws,” said Doug Gansler, the state’s Maryland attorney general.
He said the group is still reviewing its options. But with no public outreach campaign, and just 11 days to collect the first 20,000 petition signatures from verified Maryland voters, he said the challenge may just be too great.
The group, which has Montgomery County ties, seemed poised to focus on part of the Next Generation Act that would end a “renewable energy” subsidy for trash incinerators that produce power. The state’s two such incinerators are in Baltimore City and Montgomery County.
The solar energy bill signed Tuesday by Moore has also garnered criticism, particularly from Republican legislators representing the rural Eastern Shore, who argued that the policy would make it easier for solar companies to gobble up productive farmland.
But it was perhaps the least controversial bill of the package that found itself the target of a Moore veto Friday: A bill creating a “Strategic Energy Planning Office,” funded by an existing process that also fuels the Public Service Commission and Office of People’s Counsel.
Moore’s veto, citing the cost of establishing the office, surprised sponsor Sen. Katie Fry Hester (D-Howard and Montgomery).
“I look forward to better understanding his rationale and will work with leadership in the Legislature to determine next steps,” Hester said in a statement to Maryland Matters Friday.
Next Generation bill gets praise amid controversy
In a statement Tuesday, Emily Scarr, a senior adviser at the consumer advocacy group Maryland PIRG, said the bill made “groundbreaking pro-consumer changes to utility regulation.”
“By prioritizing safety over gas system expansion and reining in wasteful spending by BGE and other Maryland utilities, this new law can save Marylanders hundreds of millions of dollars,” Scarr wrote.
Lapp agreed.
“Maximizing the legislation’s potential benefits will depend on lots of work at the Public Service Commission,” Lapp said. “We look forward to using the new tools to slow or prevent further rate increases.”
Environmental groups were more mixed in their responses to the Next Generation bill. Many were troubled by its potential to expedite a new natural gas power plant in Maryland, including by fast-tracking new facilities on the site of retired power plants. But amendments lessened the blow, and added environmental priorities — like beefing up energy storage and cutting funding for incineration.
The Mid-Atlantic Renewable Energy Coalition, now known as MAREC Action, an industry group representing utility-scale developers of wind and solar, as well as battery energy storage, applauded the bill’s power storage provisions in a statement Tuesday.
“With this legislation, our industry will invest in Maryland, deliver reliable energy resources needed to keep the lights on, and stabilize prices for Maryland ratepayers,” said Evan Vaughan, executive director of MAREC Action.
The bill calls for two procurement periods, beginning in 2026, when the Maryland Public Service Commission will seek to bring 800 megawatts of energy storage in each period to the state.
Currently, the multistate electric grid that includes Maryland only hosts 375 megawatts of storage, which MAREC said “pales in comparison” to other states such as California and Texas. If Maryland follows through with the procurements, it would be positioned as an “energy storage leader” within the 13-state PJM region, according to the industry group’s news release.
The purchases could work quickly to fill gaps in Maryland’s electric grid, by storing energy for use during peak times, Vaughan said.
“Governor Moore and legislative leaders acted quickly and decisively to ensure Maryland maximizes its energy storage resources,” Vaughan wrote. “These resources meet energy reliability needs more quickly than any other resource.”
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