Maryland Gov. Wes Moore this week proposed a bipartisan legislative package to lower energy bills, including a $100 million bidding program for distributed energy.
The auction would leverage alternative compliance payments (ACP)—money paid by utilities when they fail to meet the renewable portfolio standard. Renewable distributed energy developers would vie for $100 million in financing and support.
Selected through a low-bid competition, winners would need to help the state meet its renewable portfolio standard, which requires that renewable energy account for about 40% of electric retail sales.
First proposed by Senators Brian Feldman and Bill Ferguson, the auctions would be held annually beginning Jan. 1, 2027.
The legislation calls for the Maryland Energy Administration to create the auction program in conjunction with the state Public Service Commission.
Update: More details on competitive DER auction
Here are more details we’ve learned about the auction proposal.
The state will set a capacity target each year for the auction based on renewable energy credit (REC) shortfalls from the prior year, renewable energy growth forecasts, projected ACP revenues, expected energy clearing prices, and renewable energy trends in Maryland.
- The goal is to meet or exceed the number of RECs the state fell short on the previous year.
- The auction might set a minimum megawatt level for specific renewable energy sources or simply establish a collective threshold.
- Eligible bidders must specify a price per megawatt and the actual amount of megawatts to be generated by the project
It’s a reverse auction. Developers who submit the lowest bids will be awarded funds to build their projects.
The state will set development milestones. If a developer fails to reach them because of interconnection or permitting delays, the state may grant an extension.
Note: The state has a carve-out for customer-sited solar program, which provides grants to low-income customers.
The wide-ranging Utility RELIEF Act also includes a host of initiatives to generate more energy and increase efficiency, with the aim of cutting consumer energy bills by $150 annually.
According to Moore’s office, they include:
- Energy Bill Relief: $100 million from the Strategic Energy Investment Fund to refund Maryland ratepayers to offset utility fees and lower energy bills.
- Grid Modernization: Utilities would prioritize advanced transmission and grid-enhancing technologies to increase the capacity and efficiency of existing transmission lines
- Holding Utilities Accountable: Greater oversight of federally approved projects with $3.5 billion in actual and projected spending, and caps the amount utilities can recover for supervisor pay. The legislation also eliminates the current 0.5% Regional Transmission Organization (RTO) participation incentive, which allows utilities to collect additional profits, and mandates that utility companies join Maryland’s RTO, PJM Interconnection.
- Data Center Guardrails: Data centers would pay for their own energy infrastructure upgrades
- Protecting Working Families: Streamlines existing energy assistance programs to cut red tape for working families who urgently need state support, while helping fund the Public Service Commission’s new Limited Income Discounted Rate program, which will save eligible customers up to $1,400 per year.