It seemed like the General Assembly’s major energy bill would have a fairly smooth road to passage. When the bill was unveiled in mid-March, the House speaker and the Senate president stood on either side of Gov. Wes Moore (D), proclaiming their mutual support for the bill.
But the Senate, which gave initial approval to the Utility RELIEF Act on Thursday, has added a number of substantive amendments — including three from the Republican minority.
Their bill is inching farther and farther from the version passed a few weeks ago by the House of Delegates. Meanwhile, less than two weeks remain in the 90-day legislative session.
“It’s almost 100 pages, so it’s easy to cherry-pick and be critical of one portion of the bill for not doing enough,” said Sen. Brian Feldman (D- Montgomery), chair of the Senate’s Education, Energy and the Environment Committee. “But big picture … the bill needs to be viewed as part of a broader effort to address some of our short-term, medium- and longer-term issues that we can control here in the General Assembly.”
Leaders in both chambers say they’re pursuing the same goal: Trimming high gas and electricity bills walloping voters. When they unveiled the bill, lawmakers estimated at least $150 in annual savings for the average ratepayer, though low-income Marylanders could see more.
The two chambers are looking under many of the same couch cushions: Cutting an energy efficiency program funded by the ratepayers, bolstering solar energy and setting new rules for the utilities. But their approaches also differ in key ways.
One Republican amendment approved by the Senate on Thursday was resoundingly rejected in the House of Delegates. The amendment represents a surprising rebuke of the Maryland Public Service Commission, which regulates utility companies in the state.
Last summer, the commission issued a decision that would require gas companies to end a policy that spread the cost of new lines among all customers. Instead, the customers requesting new natural gas service would pay the full cost. The commission was in the middle of a rule-making process to formally issue the policy change.
But the Senate Thursday voted to overturn the commission’s decision, allowing gas companies to fund extensions by spreading out the costs among ratepayers.
The amendment, introduced by Sen. Paul Corderman (R-Frederick and Washington), quickly drew backlash on Thursday from affordability advocates and climate groups, who argue that ratepayers should not be saddled with the cost of expanding a gas system that could eventually be phased out because of electrification.
Senate Majority Leader Steve Hershey (R-Upper Shore) applauded the Senate for taking up Republicans amendments, including on the gas lines, a new rule for notifying landowners about power lines, and a new study of the electric grid. Senators rejected a number of other Republican amendments, several of which would have halted renewable energy programs that have a cost for ratepayers.
But Hershey noted that the provisions could face opposition from the “more progressive” House.
“It’s going to be a battle to see what the compromise will look like. There’s going to have to be some give-and-take if they want to get something out. There’s not a whole lot of time left,” Hershey said.
Another Republican amendment, from Sen. J.B. Jennings (R-Baltimore and Harford), would set clearer requirements for power companies to notify landowners who are in the path of new power transmission lines — and adjacent landowners.
Jennings said landowners in the path of the 67-mile Piedmont Reliability power line got notice from the company. But his constituents had to find out about a line through his district, to address the retirement of the Brandon Shores coal power plant, through newspaper and online advertisements.
“Nobody knew about this until it was too late,” Jennings said.
A Democratic amendment Thursday weakened a provision that was a priority for House Speaker Joseline Peña-Melnyk (D-Prince George’s and Anne Arundel), prohibiting utilities from using ratepayer dollars to pay any supervisor compensation over about $285,000. But an amendment from Sen. Ron Watson (D-Prince George’s) limits the provision to utility officers, rather than all those who supervise other employees.
But even before Thursday, there were already significant distinctions between the two chambers’ versions of the Utility RELIEF Act.
The House, for example, banned a procedure that lets utilities use spending forecasts to ask for rate increases, instead of having to show the costs they incurred to maintain and improve infrastructure. The Senate merely called on the commission to study the practice.
Both the House and the Senate tightened regulations on a separate electricity tariff for data centers, aiming to cover more of the energy-hogging facilities. But the Senate added provisions meant to encourage data centers that bring clean energy when they set up shop, by offering expedited permitting and other benefits.
A spokesperson for Peña-Melnyk pushed back against the Senate’s changes in a statement Thursday evening. “We think the House version of the bill is the strongest posture for ratepayer protection and we’ll be working with the Senate to get a final bill across the finish line,” the statement said.
Speaking on the Senate floor Thursday about the natural gas lines, Corderman highlighted a housing development in his Western Maryland district, which he argued was stymied by the commission’s decision about gas line extensions. If the commission is allowed to implement the rule, he said, other developments will stall, too.
“We try to create more housing, and we don’t allow these extensions to exist,” Corderman said. “Those housing developments aren’t going to happen.”
Feldman accepted it as a “friendly” amendment, meaning it was added without a vote. He acknowledged on the floor that the Senate never held a hearing on the subject, but he believed that the PSC’s new rule “may have created some problems.” He declined further comment on the decision after Thursday’s proceedings.
When it issued the decision, the commission noted that letting gas companies continue spreading the costs of new gas lines would fly in the face of the legislature’s 2022 Climate Solutions Now Act, which required the state to reduce its greenhouse gas emissions over time.
The commission was led at the time by Chairman Fred Hoover, who later stepped down as the governor pushed for fresh leadership, It wrote in its decision that customers could face stranded costs if they continued paying for gas system expansions as more and more homeowners go electric.
A PSC spokesperson said Thursday that it was still evaluating the Corderman amendment, but it “does have the potential to lead to all ratepayers subsidizing costs of last mile gas line extensions again.”
The Senate’s bill is a “smorgasbord of bad ideas,” wrote Emily Scarr, senior adviser at Maryland PIRG, the statewide consumer group.
“We’re deeply disappointed the Senate voted to increase gas customer bills to incentivize the gas utilities’ highly profitable pipeline system expansion,” Scarr said in a statement. “Instead of following the House’s lead to rein in excessive utility profits, the Senate added several amendments to do the opposite.”
A fiscal note for a bill sponsored by House Minority Leader Jason Buckel (R-Allegany), that would have had the same effect at the Corderman amendment, said it could result in “foregone savings for existing gas customers.”
In a July report, the Maryland Office of People’s Counsel estimated that, if implemented, the commission’s rule change would save customers of the state’s two largest gas utilities $952 million on their gas bills through 2035.
“The Public Service Commission exercised prudence and restraint by ordering the end of line extension allowances,” said Brittany Baker, Maryland director of the Chesapeake Climate Action Network. “Tying up their hands will raise rates and ensure gas distribution costs increase.”
