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State Energy Efficiency Policy Database

Maryland

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Summary

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.  This changed when the legislature enacted the EmPower Maryland Energy Efficiency Act of 2008, creating an EERS that sets a statewide goal of reducing per capita electricity use by 15% by 2015 with targeted reductions of 5% by 2011 (Order 82344).  Since then, electric utilities have significantly expanded their energy efficiency program portfolios.  Utilities must file their energy efficiency program plans with the Public Service Commission, which then must approve the plans. The PSC has allowed some utilities to decouple their profits from their sales.  Utilities do not have an option to earn shareholder performance incentives.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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.

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November 8, 2013


Customer Energy Efficiency Programs

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 with targeted reductions of 10% by 2013.

Electricity savings and demand reduction plans and cost recovery proposals were required to be filed with the PSC beginning on September 1, 2008 and every three years thereafter. On December 22, 2011, the PSC approved plans for the second three-year cycle (2012-2014) from Baltimore Gas & Electric (Case 9154, Order 84569), Delmarva Power and Light (Case 9156, Order 84569),  Potomac Electric Power Company (PEPCO) (Case 9155, Order 84569), Potomac Edison (PE) (Case 9153, Order 84569), and Southern Maryland Electric Cooperative (SMECO) (Case 9157, Order 84569).

In 2011, the Commission approved the implementation of smart meters for Baltimore Gas and Electric and PEPCO. Delmarva Power and Light received Commission approval to implement smart meters in 2012. Southern Maryland Electric Cooperative’s Automated Metering Infrastructure plan is currently awaiting Commission decision.

Funding sources for energy efficiency programs are primarily through each utility’s EmPOWER Maryland surcharge on customer bills. Additionally, revenue streams resulting from demand response and energy efficiency resources being bid into the PJM BRA are used to offset the costs of the efficiency programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Alternative Business Models

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)


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

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.


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August 9, 2013


Energy Efficiency as a Resource

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.


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August 7, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, SCT, RIM
  • Uses a deemed savings database: no

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 9153-9157 and 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 the California 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.

In Maryland, reported savings are evaluated by Navigant (the utilities' EM&V contractor) and verified by Itron (the PSC's independent evaluator). EM&V is done on an annual basis and results are filed with the Commission between March/April for evaluation and between May/June for verification.


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August 21, 2013


Energy Efficiency Resource Standards

Summary: 15% per-capita electricity use reduction goal by 2015 calculated against a 2007 baseline (10% by utilities, 5% achieved independently)

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 calculated against a 2007 baseline (Order 82344). The 15% goal is equivalent to approximately 8,303 GWh. 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. 

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) implement programs aimed toward achieving the remaining 5% of the overall 2015 electricity savings, although no specific legal requirement exists.

Though Maryland’s targets called for reductions beginning in 2009, it took several years for programs to receive approval from state legislators. This resulted in energy savings and demand reductions considerably below those targeted in utilities’ plans and EmPower Maryland 2011 and 2015 goals (see EmPower Maryland’s 2012 Report). The second EmPOWER Maryland program cycle began in 2012. For the first time since utilities began offering programs, the reported annual energy savings exceeded forecasts, while overall energy reductions have reached 41 percent of EmPOWER Maryland’s 2015 energy reduction goal (see EmPower Maryland’s 2013 Report).

The Maryland Energy Administration (MEA) and the Maryland Public Service Commission (PSC) are currently determining whether and how targets for EmPower Maryland should be set beyond 2015. In July 2013, MEA submitted a request for direction and proposal for EmPOWER planning to the PSC on energy efficiency and conservation programs beyond 2015.

Maryland has no Natural Gas EERS.


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August 21, 2013