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Maryland households will see at least $150 a year in utility bill savings from a package of bills unveiled late this week, the governor and legislative leaders promised Friday.
Low-income households could see even greater savings from Utility RELIEF Act, the wide-ranging energy bill that is expected to hit the House floor Monday, with some savings kicking in as early as this summer if the bill passes.
“Bills are not rising because households are suddenly starting to use more power,” Gov. Wes Moore (D) said Friday. “They are rising because our people are stuck in a system that is actively working against them. And I’m here with all these lawmakers because each and every one of us feel that pain. Because we’re pissed, and because we know more needs to be done.”
Under the Utility RELIEF Act, customers would quickly see sizable reductions to a surcharge that covers the EmPOWER Maryland program, through which Marylanders access energy efficiency upgrades, such as home appliance rebates. The program would be reduced in size for several years.
Other decreases would take place quickly, though they won’t be a visible line item on customers’ bills. The package includes a House-passed measure that would ban utility companies from charging customers for supervisor compensation over $285,000, requiring shareholders to shoulder that cost. And it would force companies to eat the cost of membership in a regional grid instead of charging it to ratepayers, saving about $20 million annually.
Some changes would take longer to realize. Annually, the bill would send $100 million previously collected from ratepayers and direct it toward auctions for new solar energy and battery storage projects. It would set new restrictions on utility rate increases, and encourage companies to consider alternatives to building new power transmission lines.
During his remarks in the State House rotunda on Friday, Moore expressed frustration with Maryland utilities, pointing to his own mother’s utility bill, which he said reached $517 in January.
“These are Marylanders. They deserve better,” Moore said. “ And all this is being done while energy executives are planning their vacations.”
In a joint statement Friday, Maryland’s Exelon utilities — Baltimore Gas & Electric, Delmarva Power and Pepco — said they will be reviewing the legislation to “ensure the proposed measures would not have any unintended consequences for our customers.”
“We ask that legislators work closely with energy industry experts to ensure that none of the measures being proposed would increase customer costs, introduce risks to safety and reliability, or jeopardize economic development,” read the statement. “Deferring necessary work can lead to more disruptive and expensive outcomes, as Maryland has seen when critical infrastructure is allowed to deteriorate.”
The annual electricity bill savings could be considerably higher for low-income families, said Senate President Bill Ferguson (D-Baltimore City). He pointed to a plan to put $37 million from a ratepayer-fueled state fund to cap rates for low-income people at 6% of their income.
“On the income-eligible individuals, we are talking up to thousands” in savings, Ferguson said. “Those are the most vulnerable amongst us. They will have significantly higher savings.”
The money will come from the Strategic Energy Investment Fund, the state fund that has burgeoned in recent years. Utilities pay into it when they do not purchase enough renewable energy to meet state goals. Lawmakers are leaning on the now-massive fund to balance the budget — a Senate proposal would pull $292 million from SEIF to balance the budget, mirroring a proposal from Moore.
House and Senate Republicans argued the plan doesn’t yield enough savings for ratepayers, and relies too heavily on renewable energy projects to bolster energy supply.
“The biggest problem is: We’re doing nothing to increase energy generation long-term. We’re continuing to say we’re going to solar power our way out of the energy crisis,” said Del. Jason Buckel (R-Allegany), the House minority leader.
Republicans have proposed a pause on the EmPOWER program, and a bill that would withdraw Maryland from the Regional Greenhouse Gas Initiative, a multistate initiative to limit carbon emissions.
“They’re reversing their own policies,” said Sen. Justin Ready (R- Carroll and Frederick). “They may have some relief, but it would be very easy to more than double the kind of relief they’re talking about.”
“Twelve bucks a month, that’s great. We’re all going to support any kind of ratepayer relief we can, reasonably,” Buckel said. “But the cost of a Big Mac is not going to change [things].”
It didn’t get much airtime Friday, but the leadership package also aims to bring energy suppliers back into Maryland’s marketplace to compete with the utilities, by offering them additional flexibility over current law. They would be able to ink three-year contracts with customers, instead of deals lasting no more than one year, and charge up to 110% of the standard offer service rate charged by utilities.
It comes two years after Maryland made significant changes meant to drive away energy scammers that ended up diminishing the market instead, forcing ratepayers to buy their electricity from their local utilities.
Environmental advocates are fighting hard against the changes to EmPOWER. They argue that, even though consumers will see a lower surcharge in the short term, bills could increase later on. That’s because there will be less investment in efficient appliances and home weatherization, increasing the amount of energy that homes demand, and possibly requiring the construction of additional infrastructure.
“There are a lot of great policies in the Utility RELIEF Act. Unfortunately, there are two lines that gut Maryland’s most successful bill reduction program,” said Jamie DeMarco, a lobbyist representing the Chesapeake Climate Action Network. “Cutting energy efficiency is similar to cutting Medicaid, in that you get savings in year one, but very quickly the entire system ends up costing a lot more.”
During Friday’s news conference, Del. Marc Korman (D-Montgomery) defended the three-year cut to EmPOWER, arguing that the program remains in place, and that its programs exclusively for low- and moderate-income Marylanders won’t be affected by the cuts.
“We kept EmPOWER. So, we have made some tweaks to it — short-term tweaks,” Korman said. “But we want to preserve the program, because energy efficiency is incredibly important.”
It isn’t clear exactly how much of EmPOWER will be eliminated by the Utility RELIEF Act, said a policy adviser for the House Speaker, but low-income programs represent about 40% of EmPOWER and those programs will be preserved.
Environmental groups fear the cuts would be steep. The utilities wouldn’t need to meet as stringent greenhouse gas reduction goals with their EmPOWER programs, effectively shrinking their offerings. The goals wouldn’t return to their 2027 level until 2036. On top of that, the utilities would be allowed to count solar projects in their territories toward their greenhouse gas reduction goal, further reducing the amount of home energy efficiency programs they need to provide to the ratepayers.
It also isn’t clear how the changes could impact energy demand in the future, said a policy adviser to Ferguson, who noted that appliances aren’t replaced every year “so, just because an EmPOWER program may be slightly more limited than it was in the past, doesn’t mean that homeowners are not going to naturally be replacing those appliances with higher efficiency versions.”
A coalition of environmental groups also argued that the bill it not tough enough on data centers. The bill would encourage them to mitigate their power demands, use local workers and pay for their power — but it would not set requirements.
“As House Speaker Joseline Peña-Melnyk said, this bill is not perfect, and we believe it should be strengthened. Intentions to hold data centers accountable are a positive step, but we need firm regulatory requirements to increase transparency, sustainability and accountability for hyperscale data centers,” read a statement from Nature Forward and Marylanders for Data Center Reform.
Moore also took the opportunity Friday to continue his attacks on PJM Interconnection, the regional transmission operator serving Maryland. He has argued that PJM’s procedures stymied the arrival of clean energy projects onto the grid, all while data centers’ power demand soared.
“Our regional grid operator will tell you how hard it is to add projects and how hard it is to lower their bills. They will tell you how technical this is and how complicated this is. And here’s what I know: The people of Maryland are smart. And we don’t want you gaslighting us. Lower our prices,” Moore said.
Despite the pushback, House Speaker Joseline Peña-Melnyk (D-Prince George’s and Anne Arundel) was optimistic about the bill’s chances.
“Do you know how to tell that a legislation is a good piece of legislation?” Peña-Melnyk asked. “When all people on all sides are unhappy … The utilities hate it. The environmental groups don’t love it. And I know they’re upset. But we must work together. And everyone had to give up a little. We had to compromise to deliver for the people in Maryland.”
