The Maryland House speaker and Senate president announced Wednesday that they have come to a deal on the General Assembly’s broad energy bill, easing concerns that disagreements that cropped up in recent weeks might have derailed the package.
The House and Senate must still approve the legislation, called the Utility RELIEF Act, before Monday at midnight so it can be sent to Gov. Wes Moore (D) for his signature.
“While each chamber advanced slightly different versions of the bill, we are aligned on the core goal: lowering costs and increasing reliability for Marylanders,” read a joint statement from the presiding officers issued Wednesday afternoon.
In the short-term, the bill is expected to save the average Maryland family $150 annually on electric bills, largely because of temporary cuts to the EmPOWER Maryland energy efficiency program, for which all ratepayers pay a surcharge. Low-income Marylanders are likely to see more relief. And as longer-term policies take effect, additional savings would be realized, officials say.
“We are confident that this agreement will deliver real, immediate relief while making long-term investments in Maryland’s energy future,” read Wednesday’s joint statement.
It wasn’t expected to be this rocky. In mid-March, Moore stood alongside House Speaker Joseline Peña-Melnyk (D-Prince George’s and Anne Arundel) and Senate President Bill Ferguson (D-Baltimore City), and announced that all three had agreed on legislation aiming to lower gas and electric bills in Maryland.
But the Senate added several controversial amendments, before passing the bill on Monday. That put the two chambers at odds, with the House taking a more aggressive posture toward the utility companies.
The final language of the bill is still being hammered out, according to Wednesday’s leadership statement. But all of the key disagreements have been resolved, according to a General Assembly staffer.
There will be a one-year moratorium on controversial “forecast test years” for utility rate-setting, while regulators at the Maryland Public Service Commission study the practice and make a final decision, according to the staffer. The House had banned the practice altogether, while the Senate opted for a study.
Through forecast test years, utilities can ask for rate increases using spending projections — before they’ve actually spent the money on infrastructure enhancements. Consumer groups have warned that the practice, implemented about six years ago, has cost Marylanders millions because of utility overspending. But the utilities disagree, and point to competing data showing that the forecasting has benefitted ratepayers.
Both chambers have agreed that if utilities underspend under a multiyear plan, they should return the money to consumers. But if they overspend, they cannot pull additional money from customers. The Senate added “performance incentives” meant to encourage the utilities to spend less, but those will not appear in the final bill.
The final bill will also state that any salary over about $285,000 at an investor-owned utility must come from shareholders, not from ratepayers —matching language passed by the House. The Senate had only applied the cap to officers.
A controversial Republican amendment added in the Senate regarding natural gas lines will be removed from the final bill, according to the staffer. The amendment would have allowed gas companies to once again socialize costs associated with new lines, overturning a Public Service Commission decision from last year. A controversial Republican-backed renewable energy study will also not appear in the final bill.
Gas companies will be barred from the EmPOWER Maryland program under the bill, and the program would shrink for the next several years, until it returns to current levels in 2036. The cuts drew heavy criticism from environmental groups, who warned that consumers’ bills could ultimately increase with less investment in energy efficiency.
Remaining in the bill are ideas proposed by Sen. Katie Fry Hester (D-Howard and Montgomery) regarding energy-hungry data centers. Her amendments would reward data centers, including with expedited permitting, that bring along batteries and non-emitting energy sources such as solar. Both chambers also captured an increased number of data centers in a special tariff, meant to compel data centers to pay for the improvements to the electric grid that they require.
The wide-ranging bill includes a number of other provisions on which the two chambers were in agreement.
The bill would boost solar energy projects, using $100 million previously collected from ratepayers. It’s estimated to save Maryland ratepayers $20 million annually by banning a fee that utilities charged to be a part of the regional transmission grid. It would place new scrutiny on power lines, and would require underground lines to go before the Maryland Public Service Commission for the first time.
