Maryland

Summary While Maryland’s utilities ran energy efficiency and demand response programs in the 1980s and early 1990s, most of these efforts were abandoned during the state’s move to “utility restructuring” in the late 1990s. In 2008, the legislature enacted the EmPower Maryland Energy Efficiency Act of 2008, which establishes a statewide goal of achieving a 15% reduction in per capita electricity use by 2015.  Five electric utilities have had energy efficiency program plans approved by the Maryland Public Service Commission. The PSC has also approved decoupling mechanisms for some utilities. Maryland is a member of the Regional Greenhouse Gas Initiative and took part in the first carbon dioxide allowance auction on September 25, 2008.  Maryland will use about half of its allotment of auction proceeds on energy efficiency programs. According to the Energy Information Administration, Maryland utilities spent $2.5 million on energy efficiency and reported efficiency program savings of 166 MWh in 2007. Spending and savings will increase as utility and state efficiency programs ramp up to meet the EmPower Maryland targets.

The EmPower Maryland Energy Efficiency Act of 2008 directs the Maryland PSC to require electric utilities in the state to provide energy efficiency services to its customers to achieve 10% of the 15% per-capita electricity use reduction goal by 2015. Utilities must also decrease peak demand through demand response programs by 15% by 2015. Electricity savings and demand reduction plans and cost recovery proposals were required to be filed with the PSC by September 1, 2008, and the Commission was directed to take action on each filed plan by December 31, 2008. Five utilities have had their energy efficiency program plans approved by the Maryland Public Service Commission. The Maryland Energy Administration is responsible for achieving the remaining 5% of the overall 2015 electricity use reduction target.

Also enacted in 2008, SB 268 established the Strategic Energy Investment Fund, which is administered by the MEA and supported by the proceeds of the state’s CO₂ emission allowances sold at the first Regional Greenhouse Gas Initiative Auction, about half of which is expended on programs to reduce energy consumption.

Maryland PSC also continues to evaluate whether “smart meters” and the use of a smart grid would be a cost-effective mechanism to reduce consumption and peak demand of electricity. Baltimore Gas and Electric recently submitted a proposal to employ smart meters in 2 million homes and businesses.

According to the Energy Information Administration, Maryland utilities reported efficiency program savings of 166 MWh in 2007, less than 0.01% of total retail sales. As programs ramp up to meet EmPower Maryland targets, efficiency spending and savings in Maryland will increase.

Back to Top

Funding sources for energy efficiency and demand-side management programs vary by utility, with most of the newly proposed utility plans utilizing a demand-side management rider or surcharge recovery mechanism. According to the Energy Information Administration, Maryland utilities spent $2.5 million on energy efficiency in 2007, 0.03% of total spending.

Back to Top

Legislation (S.B. 205) passed in April 2008 set a statewide goal of achieving a 15% reduction in per capita electricity consumption and peak demand by the end of 2015. Maryland utilities are required to provide cost-effective energy efficiency and conservation programs that are designed to achieve at least 5% per capita electricity savings by the end of 2011 and 10% savings by the end of 2015. The Maryland Energy Administration (MEA) is responsible for an additional 5% savings by 2015. The programs must also achieve a reduction in per capita peak demand of at least 5% by end of 2011, 10% by 2013, and 15% by 2015.

Back to Top

The PSC has approved revenue per customer decoupling for the three investor-owned utilities in Maryland: PEPCO, Delmarva Power and Light, and Baltimore Gas & Electric.  Delmarva and PEPCO file Bill Stabilization Adjustments on a monthly basis, showing calculations for the BSA for the prior, current, and next month.   Natural gas decoupling has been implemented for Washington Gas Light since 2005.  Delmarva Case Jacket 9093, Order 81518, July 2007; PEPCO Case Jacket 9092, Order 81517, July 2007; Washington Gas Light Case Jacket 8990, Order 80130, August 2005.

Back to Top

Senate Bill 205 allows the PSC to approve financial incentive mechanisms for gas and electric companies, in appropriate circumstances, to promote energy efficiency and conservation programs. No incentives have been approved yet.

Back to Top

Utilities are required to consult with the Maryland Energy Administration regarding the design and adequacy of the company’s plan to achieve the required energy savings and demand reduction targets. The consultation process is to take place every three years, beginning on July 1, 2008.  The utilities must also submit annual updates to the PSC and Maryland Energy Administration on each plan’s implementation and progress.

Back to Top

• Maryland Energy Administration
• Maryland Public Service Commission
• Maryland State Incentives for Renewables and Efficiency
• S.B. 205
• S.B. 268

   

Last Updated 08/20/2009

Back to Top