Although Maryland’s utilities ran energy efficiency and demand response programs in the 1980s and early 1990s, most of these efforts were discontinued when the state removed regulations during utility restructuring in the late 1990s. In 2008, the legislature enacted the EmPower Maryland Energy Efficiency Act of 2008, creating an EERS that sets a statewide goal of reducing per capita energy use by 15% by 2015 with targeted reductions of 5% by 2011 (Order 82344).
Since then, the Public Service Commission has approved energy efficiency plans for its utilities and has authorized a statewide “general awareness” media campaign (Order 82673). The PSC has allowed some utilities to decouple their profits from their sales.
Maryland electric utilities reported efficiency program savings of 274,239 MWh in 2009, equivalent to 0.44% of retail sales. Spending and savings will increase as utility and state efficiency programs ramp up to meet the EmPower Maryland targets. Maryland electric utilities budgeted $88.8 million for electric efficiency programs and $3.4 million for natural gas programs in 2010. Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
For further reading, in February 2008, as part of the State Clean Energy Resource Project, ACEEE completed the report Energy Efficiency: The First Fuel for a Clean Energy Future; Resources for Meeting Maryland's Electricity Needs.
The EmPower Maryland Energy Efficiency Act of 2008 directs the Maryland Public Service Commission (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 with targeted reductions of 5% by 2011 (Order 82344). Utilities must also decrease peak demand by 15% by 2015. The Maryland Energy Administration (MEA) is responsible for achieving the remaining 5% of the overall 2015 electricity savings target.
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. In 2009, the PSC approved plans from Baltimore Gas & Electric (Case 9154, Order 82384), Delmarva Power and Light (Order 82835), and Potomac Electric Power Company (PEPCO) (approved in 2009: Case 9155). The PSC also approved plans from Southern Maryland Electric Cooperative, after revision (Order 82834) and is reviewing plans from Allegheny Power (Case 9153).
The 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.
Maryland electric utilities reported efficiency program savings of 85,000 MWh in 2008 and 274,239 MWh in 2009, equivalent to 0.44% of retail sales. Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
The Maryland Home Energy Loan Program offers loans of up to $20,000. Property must be a primary residence and located in the state in order to be eligible. Single-family detached homes and townhouses are eligible. Condominiums and coops are unable to participate. The program has a tiered interest rate depending on the measures included in the project. More information on the program can be found in the ACEEE report, Energy Efficiency Financing Programs.
Funding sources for energy efficiency and demand side management programs vary by utility, with most of the newly proposed utility plans using a demand-side management rider or surcharge recovery. Carbon dioxide allowance auctions also fund both utility and non-utility energy efficiency programs.
Maryland electric utilities budgeted $88.8 million for efficiency programs and $3.4 million for natural gas programs in 2010. Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
Summary: 15% per-capita electricity use reduction goal by 2015 with targeted reductions of 5% by 2011 calculated against a 2007 baseline (10% by utilities, 5% achieved independently)
Although Maryland’s utilities ran energy efficiency and demand response programs in the 1980s and early 1990s, most of these efforts were discontinued when the state removed regulations during utility restructuring in the late 1990s. The EmPOWER Maryland Energy Efficiency Act of 2008 directs the Maryland Public Service Commission (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 with targeted reductions of 5% by 2011 calculated against a 2007 baseline (Order 82344). The 15% goal is equivalent to approximately 11,206 GWh, or 17% of 2007 retail sales (MEA Maryland Energy Outlook). The Maryland Energy Administration (MEA) and other public and private stakeholders, including the Department of Housing and Community Development (which runs the weatherization program and Department of General Services (runs the public-sector Energy Savings Performance Contracting program) are responsible for achieving the remaining 5% of the overall 2015 electricity savings target. Utility 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.
In late 2008, Maryland’s utilities filed energy efficiency and demand reduction plans to achieve the EmPOWER Maryland goals. The “interim” energy efficiency savings goals set in the plans are not sufficient to meet the 2011 or 2015 EmPOWER Maryland goals. Maryland’s two largest utilities, Baltimore Gas and Electric (BGE) and Potomac Electric Power Company (PEPCO) set interim goals that fall 40% and 30% short of the EmPOWER Maryland goals for 2015. MEA plans to save 73 GWh for programs in FY11, ramping up from the 64 GWh it saved between 2009 and 2010 (MEA EmPOWERing Maryland Clean Energy Programs FY2011). As of the end of December 2010, MEA was achieving 97 GWh.
In its 2010 Energy Outlook report, the MEA projects that its programs combined with the approved PSC programs would reduce statewide energy consumption by approximately 4,866 GWh by 2015, which is less than half the overall goal of 11,206 GWh. Nonetheless, this projection would result in around 7% cumulative savings by 2015, or an average of about 1% annual savings, a significant achievement.
Maryland has no Natural Gas EERS.
The Public Service Commission 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 monthly. Natural gas decoupling has been in place for Washington Gas Light since 2005. (Sources: 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)
Senate Bill 205 allows the Public Service Commission 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.
Since July 2008, utilities are required to consult with the Maryland Energy Administration (MEA) every three years regarding their plans to achieve the required energy savings and demand reduction goals. The utilities must also submit annual updates to the PSC and MEA.
The evaluation of ratepayer-funded energy efficiency programs in Maryland relies on both legislative mandates (Empower Statute Public Utilities 7-211)and regulatory orders (Orders in case numbers 9153-9157and Order 82869). The order follows the legislation. Evaluations are administered by both the utilities and the Maryland Public Service Commission. Maryland has established formal rules and procedures for evaluation, which are stated in the Maryland Strategic Evaluation Plan. Evaluations are conducted statewide and for each of the utilities. Maryland uses all of the five classic benefit-cost tests identified in theCalifornia Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in Public Utilities 7-211and Orders in case numbers 9153-9157. Maryland specifies the TRC to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio, total program, and customer project level screening, with exceptions for low-income programs, pilots, and new technologies.