As Maryland ratepayers are burdened with surging energy bills due to an increased demand on the energy grid, the state’s General Assembly has been negotiating the Utility Reducing Energy Load Inflation for Everyday Families (RELIEF) Act– an energy and environmental bill aimed at lowering utility costs, increasing accountability for energy companies and data center developers, and prioritizing clean energy implementation— with a deadline for April 13.
The extensive bill was introduced on March 13 by Maryland Gov. Wes Moore (D) and state legislative leaders like Speaker of the Maryland House of Delegates Joseline Peña-Melnyk (D) and state Senate President Bill Ferguson (D). When presenting the bill to the public, these leaders emphasized their commitment to protecting ratepayers’ rights through consideration of their financial situations and increased transparency from the government.
“Everyone of us has been hit by the high energy prices sweeping over our communities,” Peña-Melnyk said. “We know well the feeling of panic that sets in before opening that utility bill.”
Since 2010, the rates covering the gas distribution system have tripled, from 26 cents per therm– the unit measuring how much gas a household uses– to 97 cents per therm as of Feb. 1.
As of April 5, according to EnergySage, an online comparison marketplace for clean energy products, Prince George’s County residents pay roughly $309 per month on electricity-based utility bills. This translates to about 22 cents per kilowatt, which is approximately 7% higher than the national average.
“Our Utility RELIEF Act… it provides Marylanders with at least $150 in annual savings,” Peña-Melnyk said. “It also holds utilities and data centers accountable, it strengthens the long-term reliability of our energy system, it incentivizes new generation… and it reaffirms our commitment to achieve our clean energy goals.”
Maryland Department of the Environment’s Climate Pollution Reduction Plan aims to strengthen the state’s environmental resilience and energy independence and set the region on a path to achieve net-zero emissions by 2045. Per this plan, the new Clean Power Standard requires 100% of Maryland’s energy consumption to come from clean sources by 2035.
Moore said that while he understands that using natural gas in Maryland is inevitable, as 40% of in-state generation relies on it, he hopes that, through this legislation, advancing sustainable energy projects can be prioritized.
In a time when greener energy initiatives in Maryland have suffered federal funding cuts, focusing on greener alternatives like offshore wind, solar panels, heat pump installation and more, is crucial considering the state is in the midst of an energy crisis.
“[Utility] bills aren’t rising because households are suddenly starting to use more power,” Moore said. “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 feels that pain… and because we know more needs to be done.”
Negotiating a Clean, Affordable Future
The Utility RELIEF Act combines elements from the Lower Bills and Local Power Act that Moore proposed in January— which was meant to strengthen Maryland’s energy grid and finance sustainable energy projects— and priorities from the Senate and House. Although the legislation could be seen as a symbol of cooperation, collaboration and compromise across the General Assembly, the Maryland House and Senate have yet to reach an agreement on its parameters.
Both versions– House Bill (HB) 1532 and Senate Bill (SB) 0841– have different regulations for large-load customers, like data centers that require vast amounts of electricity to power their operations. They are defined by their load factor, or the amount of kilowatt-hours delivered on a system in a designated period. Sense Bill 0841 describes these customers as having a load factor of 60%, whereas HB 1532 describes it as 75%. A smaller defining load factor would allow for more intense restrictions on these large consumers.
In SB 0841, the Public Service Commission is required to establish a voluntary clean capacity rating program– one that is not outlined in HB 1532. It would offer benefits to data centers that bring their own clean energy, backup generators, and adopt demand response programs that align with reducing energy strain on the grid.
“Data centers will not dictate what rules they follow or what rules make sense for them,” Moore said. “We will establish what the rules are. Maryland doesn’t need to choose between affordability and innovation because we should be leading in both.”
Aside from large consumer accountability and transparency, the initial version of the Utility RELIEF Act that was introduced in March was framed around making the necessary decisions to guarantee that ratepayers maximize savings on their utility bills every year.
“We must protect working families,” Ferguson said when the bill was introduced. “The only thing that matters is a government that truly works for those it serves.”
However, in the four weeks of negotiations that have ensued since its introduction, some wonder if certain compromises truly have Maryland residents’ best interests at heart due to amendments that may cause hiked utility bills.
“We’re deeply disappointed the Senate voted to increase gas customer bills in order to incentivise gas utilities’ highly profitable pipeline system expansion,” said Senior Advisor at Maryland Public Interest Research Group (PIRG), Emily Scarr.
A series of amendments the Senate passed on April 6 void some utility oversight. If passed into law, the House’s prohibition on forecasted ratemaking, which is when utilities ask for rate increases based on predicted spending, would be reversed.
Per a recent Office of the People’s Counsel analysis, over the last six years, this method of establishing rates rose a Baltimore Gas and Electric Company (BGE) customer’s annual cost by $164, and increased a PEPCO customer’s by $323, compared to the respective $55 and $157 annual increases under traditional ratemaking.
“Forecasted ratemaking has led to excessive spending, outrageous profits, and unmanageable bills,” Scarr said. “The House has demonstrated bold leadership by standing up to BGE and PEPCO on behalf of customers. It’s time for the Maryland Senate to get on board.”
As the negotiations for the Utility RELIEF Act enter their final week, the General Assembly will hopefully keep Maryland residents’ finances and well-being in mind to produce a comprehensive piece of legislation that will prioritize ratepayers’ rights over opportunities for utilities to profit.
“Things that we can do to be able to help the people of our state, we always will do,” Moore said. “We will never stop protecting their paychecks and pocketbooks. Let’s make life a little more affordable for our people [because] that’s what Marylanders deserve.”
