Public Utilities - Solar Energy Generating Systems and Solar Renewable Energy Credits (Affordable Solar Act)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0345*

HOUSE BILL 345
C5, M5 6lr1519
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By: Delegates Charkoudian, Taveras, Acevero, Allen, Amprey, Behler, Boafo,
Ebersole, Embry, Foley, Guyton, Ivey, A. Johnson, Kaufman, J. Long,
Martinez, McCaskill, Rogers, Ruth, Stewart, Turner, and Vogel
Introduced and read first time: January 19, 2026
Assigned to: Environment and Transportation

A BILL ENTITLED

AN ACT concerning 1

Public Utilities – Solar Energy Generating Systems and Solar Renewable 2
Energy Credits 3
(Affordable Solar Act) 4

FOR the purpose of authorizing the purchase, installation, and use of a certain portable 5
solar energy generating system for certain purposes; altering the renewable energy 6
portfolio standard to include energy derived from certain solar energy generating 7
systems; authorizing an electric cooperative and a municipal electric utility to meet 8
their renewable energy portfolio standard for solar energy in a certain manner; 9
requiring that certain alternative compliance fees be paid into a certain escrow 10
account rather than into the Maryland Strategic Energy Investment Fund; requiring 11
the Public Service Commission to require electric companies to procure a certain 12
number of SRECs and SREC–IIs; requiring the Commission to issue solicitations for 13
the construction of distributed solar energy generating systems and utility –scale 14
solar energy generating systems; providing for the terms and conditions of 15
solicitations and procurement of certain solar energy generating systems; 16
establishing an escrow account for certain alternative compliance payments ; 17
requiring certain public service companies to file gross receipt tax information; 18
requiring a portion of the franchise tax revenue from certain customers to be placed 19
in a certain escrow account; and generally relating to solar energy generating 20
systems and solar renewable energy credits. 21

BY adding to 22
Article – Public Utilities 23
Section 7–321, 7–701(l–1), (l–2), (p–2), and (p–3), and 7–709.2; and 7–1232 through 24
7–1235 to be under the new part “Part V. Solar Energy” 25
Annotated Code of Maryland 26
(2025 Replacement Volume and 2025 Supplement) 27

2 HOUSE BILL 345

BY repealing and reenacting, without amendments, 1
Article – Public Utilities 2
Section 7–701(a) and 7–705(a) 3
Annotated Code of Maryland 4
(2025 Replacement Volume and 2025 Supplement) 5

BY repealing and reenacting, with amendments, 6
Article – Public Utilities 7
Section 7–703(a), (b)(23) through (25), and (e) and 7–705(b) and (b–1) 8
Annotated Code of Maryland 9
(2025 Replacement Volume and 2025 Supplement) 10

BY repealing and reenacting, with amendments, 11
Article – Tax – General 12
Section 8–404 and 8–408 13
Annotated Code of Maryland 14
(2022 Replacement Volume and 2025 Supplement) 15

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17

Article – Public Utilities 18

7–321. 19

(A) IN THIS SECTION , “PORTABLE SOLAR ENERGY GENERATING SYSTEM” 20
MEANS A MOVABLE PHOTOVOLTAIC SOLAR ENERGY GENERATION DEVICE THAT IS: 21

(1) DESIGNED TO BE CONNE CTED TO A BUILDING ’S ELECTRICAL 22
SYSTEM THROUGH A STANDARD ELECTRICAL OUTLET; 23

(2) PRIMARILY INTENDED T O OFFSET PART OF THE BUILDING’S 24
ELECTRICITY CONSUMPTION; 25

(3) LIMITED TO SUPPLYING A MAXIMUM POWER OUTP UT OF NO T 26
MORE THAN 1,200 WATTS BACK TO THE ELECTRIC SYSTEM; AND 27

(4) CERTIFIED BY UNDERWRITERS LABORATORY OR AN EQUIVALENT 28
NATIONALLY RECOGNIZED TESTING LABORATORY. 29

(B) A PERSON MAY PURCHASE AND INS TALL A PORTABLE SOLA R ENERGY 30
GENERATING SYSTEM FOR RESIDENTIAL USE ONLY. 31

(C) A PORTABLE SOLAR ENERGY GENERATING SYSTEM: 32

HOUSE BILL 345 3

(1) IS NOT SUBJECT TO THE REQUIREMENTS OF §§ 7–306 AND 7–306.1 1
OF THIS TITLE; 2

(2) IS NOT ELIGIBLE FOR INCLUSION IN MEETING THE RENEWABLE 3
ENERGY PORTFOLIO STANDARD; AND 4

(3) MAY NOT GENERATE RENEWABLE ENERGY CREDITS OF ANY TYPE. 5

(D) AN ELECTRIC COMPANY: 6

(1) MAY NOT REQUIRE A CU STOMER USING A PORTA BLE SOLAR 7
ENERGY GENERATING SYSTEM TO: 8

(I) OBTAIN THE ELECTRIC COMPANY’S APPROVAL BEFORE 9
INSTALLING OR USING THE PORTABLE SOLAR ENERGY GENERATING SYSTEM; 10

(II) PAY ANY FEE OR CHARG E RELATED TO THE PORTABLE 11
SOLAR ENERGY GENERATING SYSTEM’S ABILITY TO FEED ELECTRICITY BACK INTO 12
THE ELECTRIC SYSTEM; OR 13

(III) INSTALL ANY ADDITION AL CONTROLS OR EQUIP MENT 14
BEYOND WHAT IS INTEG RATED INTO THE PORTA BLE SOLAR ENERGY GENERATING 15
SYSTEM; AND 16

(2) IS NOT LIABLE FOR ANY DAMAGE CAUSED BY A PORTABLE SOLAR 17
ENERGY GENERATING SYSTEM. 18

7–701. 19

(a) In this subtitle the following words have the meanings indicated. 20

(L–1) “QUALIFYING DISTRIBUTE D SOLAR ENERGY GENER ATING S YSTEM” 21
MEANS A SOLAR PHOTOVOLTAIC SYSTEM THAT: 22

(1) HAS A GENERATING CAP ACITY OF 5 MEGAWATTS OR LESS , AS 23
MEASURED BY THE ALTE RNATING CURRENT RATING OF THE SYSTEM ’S INVERTER; 24
AND 25

(2) IS CERTIFIED TO GENERATE SREC–II CREDITS. 26

(L–2) “QUALIFYING UTILITY –SCALE SOLAR ENERGY G ENERATING SYSTEM ” 27
MEANS A SOLAR PHOTOVOLTAIC SYSTEM THAT: 28

(1) HAS A GENERATING CAP ACITY THAT IS GREATE R THAN 5 29
4 HOUSE BILL 345

MEGAWATTS, AS MEASURED BY THE A LTERNATING CURRENT R ATING OF THE 1
SYSTEM’S INVERTER; AND 2

(2) IS CERTIFIED TO GENERATE SREC–II CREDITS. 3

(P–2) “SOLAR RENEWABLE ENERGY CREDIT” OR “SREC” MEANS A 4
RENEWABLE ENERGY CRE DIT THAT IS DERIVED FROM A SOLAR ENERGY TIER 1 5
RENEWABLE SOURCE THAT: 6

(1) IS CONNECTED TO THE DISTRIBUTION SYSTEM IN THE STATE; AND 7

(2) IS NOT CERTIFIED TO RECEIVE SREC–II CREDITS. 8

(P–3) “SOLAR RENEWABLE ENERGY CREDIT II” OR “SREC–II” MEANS A 9
SOLAR RENEWABLE ENERGY CREDIT EQUAL TO THE GENERATION ATTRIBUTES OF 1 10
MEGAWATT–HOUR OF ELECTRICITY CONNECTED TO THE ELECTRIC TRANSMISSION 11
OR DISTRIBUTION SYSTEM SERVING THE STATE AND DERIVED FROM: 12

(1) A QUALIFYING DISTRIBUTED SOLAR ENERGY GENERAT ING 13
SYSTEM; OR 14

(2) A QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERAT ING 15
SYSTEM. 16

7–703. 17

(a) (1) (i) The Commission shall implement a renewable energy portfolio 18
standard that, except as provided under paragraphs [(2) and (3)] (2), (3), AND (4) of this 19
subsection, applies to all retail electricity sales in the State by electricity suppliers. 20

(ii) If th e standard becomes applicable to electricity sold to a 21
customer after the start of a calendar year, the standard does not apply to electricity sold 22
to the customer during that portion of the year before the standard became applicable. 23

(2) A renewable energy portfolio standard may not apply to electricity sales 24
at retail by any electricity supplier: 25

(i) in excess of 300,000,000 kilowatt–hours of industrial process load 26
to a single customer in a year; 27

(ii) to residential customers in a region of th e State in which 28
electricity prices for residential customers are subject to a freeze or cap contained in a 29
settlement agreement entered into under § 7 –505 of this title until the freeze or cap has 30
expired; or 31

HOUSE BILL 345 5

(iii) to a customer served by an electric cooperative under an 1
electricity supplier purchase agreement that existed on October 1, 2004, until the 2
expiration of the agreement, as the agreement may be renewed or amended. 3

(3) The portion of a renewable energy portfolio standard that represents 4
offshore wind energy: 5

(i) applies only to the distribution sales of electric companies; and 6

(ii) may not apply to distribution sales by any electric company in 7
excess of: 8

1. 75,000,000 kilowatt–hours of industrial process load to a 9
single customer in a year; and 10

2. 3,000 kilowatt –hours of electricity in a month to a 11
customer who is an owner of agricultural land and files an Internal Revenue Service form 12
1040, schedule F. 13

(4) THE PORTION OF A RENE WABLE ENERGY PORTFOLIO STANDARD 14
THAT REPR ESENTS SOLAR ENERGY THAT IS DERIVED FROM QUALIFYING 15
DISTRIBUTED SOLAR ENERGY GENERAT ING S YSTEMS AND QUALIFYING 16
UTILITY–SCALE SOLAR ENERGY G ENERATING SYSTEMS AP PLIES ONLY TO THE 17
DISTRIBUTION SALES OF ELECTRIC COMPANIES. 18

(b) Except as provided in subsections (e) and (f) of this section, the renewable 19
energy portfolio standard shall be as follows: 20

(23) in 2028: 21

(i) AN AMOUNT EQUAL TO THE SUM OF: 22

1. 43% from Tier 1 renewable sources, including: 23

[1.] A. at least 11% derived from solar energy THAT IS NOT 24
GENERATED FROM SOURCES IDENTIFIED IN ITEM 2 OF THIS ITEM; 25

[2.] B. an amount set by the Commission under § 26
7–704.2(a) of this subtitle derived from offshore wind energy, including at least 800 27
megawatts of Round 2 offshore wind projects; and 28

[3.] C. at least 1% derived from post –2022 geothermal 29
systems; and 30

2. AN AMOUNT SET BY THE COMMISSION UNDER § 31
7–709.2 OF THIS SUBTITLE FOR RENEWABLE ENERGY CRE DITS DERIVED FROM 32
6 HOUSE BILL 345

SOLAR ENERGY THAT IS GENERATED FROM QUALIFYING DIST RIBUTED SOLAR 1
ENERGY GENERATING SY STEMS AND QUALIFYING UTILITY–SCALE SOLAR ENERGY 2
GENERATING SYSTEMS; AND 3

(ii) 2.5% from Tier 2 renewable sources; 4

(24) in 2029: 5

(i) AN AMOUNT EQUAL TO THE SUM OF: 6

1. 49.5% from Tier 1 renewable sources, including: 7

[1.] A. at least 12.5% derived from solar energy THAT IS 8
NOT GENERATED FROM SOURCES IDENTIFIED IN ITEM 2 OF THIS ITEM; 9

[2.] B. an amount set by the Commission under § 10
7–704.2(a) of this subtitle derived from offshore wind energy, incl uding at least 800 11
megawatts of Round 2 offshore wind projects; and 12

[3.] C. at least 1% derived from post –2022 geothermal 13
systems; and 14

2. AN AMOUNT SET BY THE COMMISSION UNDER § 15
7–709.2 OF THIS SUBTITLE FOR RENEWABLE ENERGY CRE DITS DERIVED FROM 16
SOLAR ENERGY THAT IS GENERATED FROM QUALIFYING DIST RIBUTED SOLAR 17
ENERGY GENERATING SY STEMS AND QUALIFYING UTILITY–SCALE SOLAR ENERGY 18
GENERATING SYSTEMS; AND 19

(ii) 2.5% from Tier 2 renewable sources; and 20

(25) in 2030 and later: 21

(i) AN AMOUNT EQUAL TO THE SUM OF: 22

1. 50% from Tier 1 renewable sources, including: 23

[1.] A. at least 14.5% derived from solar energy THAT IS 24
NOT GENERATED FROM SOURCES IDENTIFIED IN ITEM 2 OF THIS ITEM; 25

[2.] B. an amount set by the Commission under § 26
7–704.2(a) of this subtitle derived from offshore wind energy, including at least 1,200 27
megawatts of Round 2 offshore wind projects; and 28

[3.] C. at least 1% derived from post –2022 geothermal 29
systems; and 30
HOUSE BILL 345 7

2. AN AMOUNT SET BY THE COMMISSION UNDER § 1
7–709.2 OF THIS SUBTITLE FOR RENEWABLE ENERGY CRE DITS DERIVED FROM 2
SOLAR ENERGY THAT IS GENERATED FROM QUALIFYING DIST RIBUTED SOLAR 3
ENERGY GENERATING SY STEMS AND QUALIFYING UTILITY–SCALE SOLAR ENERGY 4
GENERATING SYSTEMS; AND 5

(ii) 2.5% from Tier 2 renewable sources. 6

(e) (1) (I) The required percentage of an electric cooperative’s renewable 7
energy portfolio standard derived from solar energy shall be 2.5% in 2020 and later. 8

(II) AN ELECTRIC COOPERATI VE MAY MEET ITS RENEWABLE 9
ENERGY PORTFOLIO STA NDARD FOR SOLAR ENERGY BY AUTHORIZING THE 10
PURCHASE OF SREC–IIS THROUGH A PROCUREMEN T PROCESS ESTABLISHE D BY 11
THE COMMISSION UNDER SUBTITLE 12, PART V OF THIS TITLE. 12

(III) AN ELECTRIC COOPERATI VE THAT AUTHORIZES THE 13
PURCHASE OF SREC–IIS THROUGH A PROCUREM ENT PROCESS ESTABLIS HED BY 14
THE COMMISSION UNDER SUBTITLE 12, PART V OF THIS TITLE MAY NOT RESCIND 15
THAT AUTHORIZATION. 16

(IV) BEGINNING JANUARY 1, 2028, AN ELECTRIC COOPERATIVE 17
THAT FAILS TO SATISF Y ITS SOLAR ENERGY R EQUIREMENTS UNDER TH IS 18
PARAGRAPH SHALL PAY A COMPLIAN CE FEE EQUAL TO THE WEIGHTED AVERAGE 19
DOLLAR PER KILOWATT–HOUR OF SREC–II CREDITS PROCURED UNDER SUBTITLE 20
12, PART V OF THIS TITLE FOR THE RELEVANT COMPLIANCE YEAR INSTEAD OF THE 21
COMPLIANCE FEE ESTABLISHED UNDER § 7–705 OF THIS SUBTITLE. 22

(2) (I) The required percentage of a municipal electric utility’s 23
renewable energy portfolio standard shall be[: 24

(i) in 2021: 25

1. 20.4% from Tier 1 renewable sources, including: 26

A. at least 1.95% derived from solar energy; and 27

B. an amount set by the Commission under § 7 –704.2(a) of 28
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 29

2. 2.5% from Tier 2 renewable sources; and 30

(ii) in 2022 and later, ] 20.4% from Tier 1 renewable sources, 31
including: 32
8 HOUSE BILL 345

1. at least 1.95% derived from solar energy; and 1

2. an amount set by the Commission under § 7 –704.2(a) of 2
this subtitle, not to exceed 2.5%, derived from offshore wind energy. 3

(II) A MUNICIPAL ELECTRIC U TILITY MAY MEET ITS 4
RENEWABLE ENERGY PORTFOLIO STANDARD FOR SOLAR ENERGY BY AUTHORIZING 5
THE PURCHASE OF SREC–IIS THROUGH A PROCUREMENT PROCESS ESTABLISHED 6
BY THE COMMISSION UNDER SUBTITLE 12, PART V OF THIS TITLE. 7

(III) A MUNICIPAL ELECTRIC U TILITY THAT AUTHORIZ ES THE 8
PURCHASE OF SREC–IIS THROUGH A PROCUREM ENT PROCESS ESTABLIS HED BY 9
THE COMMISSION UNDER SUBTITLE 12, PART V OF THIS TITLE MAY NOT RESCIND 10
THAT AUTHORIZATION. 11

(IV) BEGINNING JANUARY 1, 2028, A MUNICIPAL ELECTRIC 12
UTILITY THAT FAILS TO SATISF Y ITS SO LAR ENERGY REQUIREME NTS UNDER THIS 13
SECTION SHALL PAY A COMPLIANCE FEE EQUAL TO THE WEIGHTED AVER AGE 14
DOLLAR PER KILOWATT–HOUR OF SREC–II CREDITS PROCURED UNDER SUBTITLE 15
12, PART V OF THIS TITLE FOR THE RELEVANT COMPLIANCE YEAR INSTEAD OF THE 16
COMPLIANCE FEE ESTABLISHED UNDER § 7–705 OF THIS SUBTITLE. 17

7–705. 18

(a) (1) Except as provided in paragraph (2) of this subsection, each electricity 19
supplier shall submit a report to the Commission each year in a form and by a date specified 20
by the Commission that: 21

(i) 1. demonstrates that the electricity supplier has complied 22
with the applicable renewable energy portfolio standard under § 7–703 of this subtitle and 23
includes the submission of the required amount of renewable energy credits; or 24

2. demonstrates the amount of electricity sales by which the 25
electricity supplier failed to meet the applicable renewable energy portfolio standard; 26

(ii) documents the level of participation of minority business 27
enterprises and minorities in the activities that support the creation of renewable energy 28
credits used to satisfy the standard under § 7 –703 of this subtitle, including development, 29
installation, and operation of generating facilities that create credits; 30

(iii) documents the amounts and types of generation associated with 31
renewable energy credits purchased in compliance with § 7 –707(c) of this subtitle during 32
the reporting period; and 33

(iv) documents the amount of renewable energy certificates that do 34
HOUSE BILL 345 9

not qualify as renewable energy credits as defined in § 7–701 of this subtitle, including, for 1
each certificate: 2

1. the energy source associated with the certificate, including 3
its location, when it was constructed, and which electric distribution system received the 4
energy; 5

2. whether the purchase of the certificate was bundled with 6
a power purchase agreement from the energy source associated with the certificate; 7

3. whether the certificate was purchased directly from the 8
operator of the energy source or through a third party; and 9

4. any other information required by the Commission. 10

(2) Paragraph (1)(iii) and (iv) of this subsection does not apply to: 11

(i) the Department of General Services’ sale of energy under § 12
7–704.4 of this subtitle; or 13

(ii) a community choice aggregator under § 7–510.3 of this title. 14

(b) (1) This subsection does not apply to a shortfall from: 15

(I) the required Tier 1 renewable sources that is to be derived from 16
post–2022 geothermal systems; OR 17

(II) THE REQUIRED SOLAR ENERGY TIER 1 RENEWABLE 18
SOURCES THAT IS TO BE DERIVED FROM QUALIFYING DISTRIBUTED SOLAR ENERGY 19
GENERATING SYSTEMS A ND QUALIFYING UTILIT Y–SCALE SOLAR ENERGY 20
GENERATING SYSTEMS. 21

(2) [If] BEGINNING OCTOBER 1, 2026, IF an electricity supplier OR 22
ELECTRIC COMPANY fails to comply with ITS OBLIGATION UNDER the renewable energy 23
portfolio standard for the applicable year, the electricity supplier OR ELECTRIC COMPANY 24
shall pay into the [Maryland Strategic Energy Investment Fund established under § 25
9–20B–05 of the State Government Article] ESCROW ACCOUNT ESTABLISHED UNDER § 26
7–1235 OF THIS TITLE: 27

(i) except as provided in item (ii) of this paragraph, a compliance fee 28
of: 29

1. the following amounts for each kilowatt –hour of shortfall 30
from required Tier 1 renewable sources other than the shortfall from the required Tier 1 31
renewable sources that is to be derived from solar energy CONNECTED TO THE 32
DISTRIBUTION SYSTEM IN THE STATE: 33
10 HOUSE BILL 345

A. 4 cents through 2016; 1

B. 3.75 cents in 2017 and 2018; 2

C. 3 cents in 2019 through 2023; 3

D. 2.75 cents in 2024; 4

E. 2.5 cents in 2025; 5

F. 2.475 cents in 2026; 6

G. 2.45 cents in 2027; 7

H. 2.25 cents in 2028 and 2029; and 8

I. 2.235 cents in 2030 and later; 9

2. EXCEPT AS PROVIDED U NDER PARAGRAPH (1)(II) OF 10
THIS SUBSECTION , the following amounts for each kilowatt –hour of shortfall from 11
required Tier 1 renewable sources that is to be derived from solar energy: 12

A. 45 cents in 2008; 13

B. 40 cents in 2009 through 2014; 14

C. 35 cents in 2015 and 2016; 15

D. 19.5 cents in 2017; 16

E. 17.5 cents in 2018; 17

F. 10 cents in 2019; 18

G. 10 cents in 2020; 19

H. 8 cents in 2021; 20

I. 6 cents in 2022; 21

J. 6 cents in 2023; 22

K. 6 cents in 2024; 23

L. 5.5 cents in 2025; 24

HOUSE BILL 345 11

M. 4.5 cents in 2026; 1

N. 3.5 cents in 2027; 2

O. 3.25 cents in 2028; 3

P. 2.5 cents in 2029; and 4

Q. 2.25 cents in 2030 and later; and 5

3. 1.5 cents for each kilowatt–hour of shortfall from required 6
Tier 2 renewable sources; or 7

(ii) for industrial process load: 8

1. for each kilowatt –hour of shortfall from required Tier 1 9
renewable sources, a compliance fee of: 10

A. 0.8 cents in 2006, 2007, and 2008; 11

B. 0.5 cents in 2009 and 2010; 12

C. 0.4 cents in 2011 and 2012; 13

D. 0.3 cents in 2013 and 2014; 14

E. 0.25 cents in 2015 and 2016; and 15

F. except as provided in paragraph (3) of this subsection, 0.2 16
cents in 2017 and later; and 17

2. nothing for any shortfall from required Tier 2 renewable 18
sources. 19

(3) For industrial process load, the compl iance fee for each kilowatt –hour 20
of shortfall from required Tier 1 renewable sources is nothing for the year following any 21
year during which, after final calculations, the net rate impact per megawatt –hour from 22
Round 1 offshore wind projects exceeded $1.65 in 2012 dollars. 23

(b–1) If an electricity supplier fails to comply with the renewable energy portfolio 24
standard that is required to be derived from post –2022 geothermal systems for the 25
applicable year, the electricity supplier shall pay into the [Maryland Strategic Energy 26
Investment Fund established under § 9–20B–05 of the State Government Article] ESCROW 27
ACCOUNT ESTABLISHED UNDER § 7–1235 OF THIS TITLE a compliance fee of the 28
following amounts for each kilowatt–hour of shortfall from required post–2022 geothermal 29
systems: 30

12 HOUSE BILL 345

(1) 10 cents in 2023 through 2025; 1

(2) 9 cents in 2026; 2

(3) 8 cents in 2027; and 3

(4) 6.5 cents in 2028 and later. 4

7–709.2. 5

(A) (1) ON OR BEFORE JANUARY 1, 2028, AND BEFORE EACH 6
PROCUREMENT ESTABLISHED UNDER § 7–1232 OF THIS TITLE , THE COMMISSION 7
SHALL DETERMINE: 8

(I) THE TOTAL NUMBER OF SRECS AND SREC–IIS 9
GENERATED BY SOLAR ENERGY GENERATING SYSTEMS IN THE STATE DURING THE 10
PREVIOUS YEAR; AND 11

(II) THE AMOUNT OF ADDITIONAL SOLAR ENERGY GENERATION 12
NEEDED, IF ANY , TO MEET THE SOLAR PO RTION OF THE RENEWAB LE ENERGY 13
PORTFOLIO STANDARD FOR THE CURRENT YEAR. 14

(2) AFTER MAKING THE DETERMINATIONS UNDER PARAGRAPH (1) OF 15
THIS SUBSECTION , THE COMMISSION SHALL REQU IRE ELECTRIC COMPANIES TO 16
PROCURE THE TOTAL NU MBER OF SRECS AND SREC–IIS GENERATED DURING 17
THAT COMPLIANCE YEAR ON A DATE , DETERMINED BY THE COMMISSION, THAT IS 18
AFTER THE DATE OF THE LAST MONTH IN WHICH SRECS AND SREC–IIS ARE 19
ISSUED FOR THE FINAL MONTH OF THAT COMPLIANCE YEAR. 20

(3) EACH YEAR T HE COMMISSION, IN CONSULTATION WITH THE 21
ADMINISTRATOR OF THE ESCROW ACCOUNT ESTABLISHED IN § 7–1235 OF THIS 22
TITLE, SHALL DETERMINE EACH ELECTRIC COMPAN Y’S SREC AND SREC–II 23
OBLIGATION BASED ON THE TOTAL RETAIL ELECTRICITY SALES IN THE ELECTRI C 24
COMPANY’S SERVICE TERRITORY DURING THE PREVIOUS YEAR. 25

(B) (1) THIS SUBSECTION APPLI ES ONLY TO THE PROCU REMENT OF 26
SRECS AND SREC–IIS GENERATED BY SOLAR ENERGY GENERATING SY STEMS 27
THAT BEGAN OPERATION BEFORE JANUARY 1, 2028. 28

(2) THE COMMISSION SHALL ESTA BLISH AN ANNUAL PROCESS FOR 29
THE PROCUREMENT OF ALL AVAILABLE SRECS AND SREC–IIS FROM SOLAR 30
ENERGY GENERATING SYSTEMS THAT BEGAN OPERATION BEFORE JANUARY 1, 2028. 31

(3) THE PROCESS SHALL: 32
HOUSE BILL 345 13

(I) DETERMINE THE AMOUNT OF SRECS AND SREC–IIS 1
NEEDED TO BE PROCURED IN EACH PROCUREMENT; 2

(II) OCCUR FOLLOWING THE LAST MONTH IN WHICH SRECS 3
AND SREC–IIS ARE GENERATED FOR THAT YEAR; AND 4

(III) ENSURE THAT THE SRECS AND SREC–IIS PROCURED ARE 5
EQUAL TO THE TOTAL SRECS AND SREC–IIS GENERATED IN THAT YEAR. 6

(4) THE PRICE FOR AN SREC OR SREC–II PROCURED THROUGH THE 7
PROCESS REQUIRED IN PARAGRAPH (2) OF THIS SUBSECTION SHALL BE EQUAL TO 8
THE ALTERNATIVE COMPLIANCE PAYMENT FOR SOLAR ENERGY UNDER § 7–705 OF 9
THIS SUBTITLE FOR THE RELEVANT REN EWABLE ENERGY PORTFOLIO STANDARD 10
COMPLIANCE YEAR. 11

7–1230. RESERVED. 12

7–1231. RESERVED. 13

PART V. SOLAR ENERGY. 14

7–1232. 15

(A) (1) BEGINNING JANUARY 1, 2028, AND AT INTERVALS OF NOT MORE 16
THAN 18 MONTHS UNTIL JANUARY 1, 2036, IN ACCORDANCE WITH THE PROGRAMS 17
ESTABLISHED IN §§ 7–1233 AND 7–1234 OF THIS SUBTITLE , THE COMMISSION, BY 18
ORDER OR REGULATION, SHALL ISSUE A SOLICITATION FOR APPLICATIONS FOR THE 19
CONSTRUCTION OF SOLAR ENERGY GENERAT ING SYSTEMS ELIGIBLE FOR 20
INCLUSION IN THE RENEWABLE ENERGY PORTFOLIO STANDARD THAT, IN TOTAL, 21
WILL INCREASE THE GENERAT ION OF SOLAR ENERGY IN THE STATE BY 4,000 22
MEGAWATTS OF GENERATING CAPACITY IN ADDITION TO THE TOTAL GENERATING 23
CAPACITY OF THE SOLA R GENERATING SYSTEMS IN OPERATION IN THE STATE ON 24
JANUARY 1, 2028, WITH THE ADDITIONAL GENERATION CAPACITY TO CONSIST OF: 25

(I) 2,000 MEGAWATTS FROM QUALIFYING DISTRIBUTED SOLAR 26
ENERGY GENERATING SYSTEMS; AND 27

(II) 2,000 MEGAWATTS FROM QUALI FYING UTILITY–SCALE 28
SOLAR ENERGY GENERATING SYSTEMS. 29

(2) THE COMMISSION, BY ORDER OR REGULATION, SHALL ESTABLISH 30
A PROCESS BY WHICH THE NUMBER OF SRECS ELECTRIC COMPANIES MUST 31
14 HOUSE BILL 345

PROCURE UNDER § 7–709.2 OF THIS TITLE MAY BE REDUCED: 1

(I) BY AN AMOUNT EQUAL TO THE NUMBER OF SRECS 2
PROCURED DURING THE 2027 COMPLIANCE YEAR; AND 3

(II) BASED ON A METHOD DETERMINED BY THE COMMISSION. 4

(B) THE COMMISSION, BY ORDER OR REGULATI ON, SHALL ESTABLISH A 5
PROCESS TO ADJUST THE RENEWABLE ENERGY PORTFOLIO STANDARD FOR SOLAR 6
ENERGY EACH YEAR TO ACCOUNT FOR THE P ROJECTED NUMBER OF SRECS AND 7
SREC–IIS ANTICIPATED TO BE PR OCURED UNDER § 7–709.2 OF THIS TITLE , AND 8
ANY OTHER ADJUSTMENTS THE COMMISSION CONSIDERS NECESSARY. 9

(C) THE COMMISSION MAY CONTRA CT FOR THE SERVICES OF 10
INDEPENDENT CONSULTA NTS OR EXPERTS IN THE IMPLEMENTATION OF THE 11
PROVISIONS OF THIS PART. 12

(D) A DEBT, AN OBLIGATION , OR A LIABILITY OF AN Y SOLAR ENERGY 13
GENERATING SYSTEMS CONSTRUCTED UNDER TH IS SUBTITLE MAY NOT BE 14
CONSIDERED A DEBT, AN OBLIGATION, OR A LIABILITY OF THE STATE. 15

7–1233. 16

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 17
INDICATED. 18

(2) “ADMINISTRATIVELY DETE RMINED INCENTIVE ” MEANS THE 19
MONETARY VALUE OF AN SREC–II GENERATED BY A QUAL IFYING DISTRIBUTED 20
SOLAR ENERGY GENERATING SYSTEM UNDER THE PROGRAM. 21

(3) “CAPACITY BLOCK ” MEANS THE MAXIMUM AM OUNT OF 22
GENERATING CAPACITY , MEASURED IN MEGAWATT S OF ALTERNATING CUR RENT, 23
THAT THE COMMISSION DETERMINES MAY BE AL LOTTED TO A SPECIFIC MARKET 24
SEGMENT FOR ANY GIVEN INCENTIVE YEAR. 25

(4) “COMMUNITY SOLAR ENERG Y GENERATING SYSTEM ” HAS THE 26
MEANING STATED IN § 7–306.2 OF THIS TITLE. 27

(5) “ELIGIBLE CUSTOMER–GENERATOR” HAS THE MEANING STAT ED 28
IN § 7–306 OF THIS TITLE. 29

(6) “MARKET SEGMENT ” MEANS THE GROUP CLAS SIFICATION FOR 30
QUALIFYING DISTRIBUTED SOLAR EN ERGY GENERATING SYST EMS UNDER THE 31
HOUSE BILL 345 15

PROGRAM. 1

(7) “PROGRAM” MEANS THE DISTRIBUTED SOLAR FACILITIES 2
INCENTIVE PROGRAM. 3

(8) “PROJECT OFF –TAKER” MEANS THE END USER O F SREC–IIS 4
THAT ARE GENERATED B Y A QUALIF YING DISTRIBUTED SOLAR EN ERGY 5
GENERATING SYSTEM. 6

(9) “QUALIFYING DISTRIBUTED SOLAR EN ERGY GENERATING 7
SYSTEM” HAS THE MEANING STATED IN § 7–701(L–1) OF THIS TITLE. 8

(B) (1) THERE IS A DISTRIBUTED SOLAR FACILITIES INCENTIVE 9
PROGRAM. 10

(2) THE COMMISSION SHALL ADMINISTER THE PROGRAM. 11

(3) ON OR BEFORE JANUARY 1, 2028, IN ACCORDANCE WITH § 12
7–1232, THE PROGRAM SHALL BEGIN ACCEPTING APPLICATIONS FROM QUALIFYING 13
DISTRIBUTED SOLAR ENERGY GENERATING SYSTEMS WITHIN A CAPACITY BLOCK ON 14
A FIRST–COME, FIRST–SERVED BASIS. 15

(C) ON OR BEFORE JANUARY 1, 2035, THE PROGRAM SHALL PROVIDE 16
INCENTIVES FOR THE DEVELOPMENT OF NEW GENERATION CAPACITY OF AT LEAST 17
2,000 MEGAWATTS OF SOLAR ENERGY FROM OWNERS OF QUALIFYING DISTRIBUTED 18
SOLAR ENERGY GENERATING SYSTEMS. 19

(D) (1) THE COMMISSION SHALL ESTABLISH ELIGIBILITY CRITERIA AND 20
AN APPLICATION PROCE SS FOR OWNERS OF DIS TRIBUTED SOLAR ENERG Y 21
GENERATING SYSTEMS TO BE QUALIFIED UNDER THE PROGRAM. 22

(2) IN ADDITION TO ANY QU ALIFICATION REQUIREM ENTS 23
ESTABLISHED BY THE COMMISSION, A QUALIFYING DISTRIBUTED SOLAR EN ERGY 24
GENERATING SYSTEM SHALL: 25

(I) BE CONNECTED TO THE ELECTRIC DISTRIBUTION SYSTEM 26
SERVING MARYLAND; 27

(II) BE ELIGIBLE FOR INCL USION IN THE RENEWABLE ENERGY 28
PORTFOLIO STANDARD; 29

(III) BE PLACED IN SERVICE AFTER DECEMBER 31, 2027; AND 30

16 HOUSE BILL 345

(IV) CONTRIBUTE TOWARD TH E STATE’S ENERGY SUPPLY 1
NEEDS. 2

(E) (1) ON OR BEFORE OCTOBER 1, 2027, AND EVERY 3 YEARS 3
THEREAFTER, THE COMMISSION SHALL ESTA BLISH AN ADMINISTRAT IVELY 4
DETERMINED INCENTIVE AND ANNUAL CAPACITY BLOCK FOR EACH OF TH E 5
FOLLOWING MARKET SEGMENTS UNDER THE PROGRAM: 6

(I) BEHIND–THE–METER RESIDENTIAL; 7

(II) BEHIND–THE–METER NONRESIDENTIAL; 8

(III) COMMUNITY SOLAR; AND 9

(IV) ANY OTHER MARKET SEG MENT DETERMINED BY T HE 10
COMMISSION. 11

(2) THE COMMISSION MAY ADJUST THE ADMINISTRATIVELY 12
DETERMINED INCENTIVE AND CAPACI TY BLOCKS NOT EARLIER THAN 90 DAYS 13
AFTER PROVIDING PUBLIC NOTICE OF THE ACTION: 14

(I) IF THE COMMISSION FINDS THAT AN ADJUST MENT IS 15
NECESSARY; OR 16

(II) TO ADDRESS CHANGES IN LAW OR POLICY. 17

(3) IN ADDITION TO THE REQUIREMENTS OF PARAGRAPH (1) OF THIS 18
SUBSECTION, THE COMMISSION MAY REVIEW AND ADJUST THE ADMINISTRATIVELY 19
DETERMINED INCENTIVE WITHIN 6 MONTHS AFTER MISSING A CAPACITY BLOCK. 20

(4) SUBJECT TO THE PROVISIONS OF PARAGRAPHS (1) THROUGH (3) 21
OF THIS SUBSECTION, THE ADMINISTRATIVELY DETERMINED INCENTIVE FOR A 22
QUALIFYING DISTRIBUTED SOLAR ENER GY GENERATING SYSTEM SHALL BE FIXED 23
FOR A PERIOD OF 15 YEARS AT THE AMOUNT THAT WAS ESTABLISHED FOR THE 24
CAPACITY BLOCK IN THE YEAR THAT THE QUALIFYING DISTRIBUTED SOLAR ENERGY 25
GENERATING SYSTEM APPLIED FOR THE CAPACITY BLOCK. 26

(5) (I) IN ESTABLISHING THE A DMINISTRATIVELY DETE RMINED 27
INCENTIVE AND ANNUAL CAPACITY BLOCK UNDER THE PROGRAM, THE 28
COMMISSION SHALL BALANCE THE NEED FOR CONTINUED MARKET DEVELOPMENT 29
FOR EACH MARKET SEGMENT WHILE LIMITING THE NET RESIDENTIAL RATEPAYER 30
COST TO NOT MORE THAN 5% OF THE AVERAGE ANNUAL ELECTRIC BILL OVER THE 31
DURATION OF THE PROGRAM. 32
HOUSE BILL 345 17

(II) IN CALCULATING THE NET RESIDENTIAL RATEPAYER COST, 1
THE COMMISSION SHALL TAKE INTO ACCOUNT: 2

1. THE COST OF ANY ADMI NISTRATIVELY DETERMINED 3
INCENTIVE SREC–IIS REQUIRED TO BE PURCHASED BY ELECTRIC COMPANIES; AND 4

2. THE BENEFITS ATTRIBUTABLE TO THE PROGRAM, AS 5
DETERMINED BY THE COMMISSION, INCLUDING: 6

A. ENERGY GENERATED; 7

B. THE VALUE OF ANY RED UCTION IN CAPACITY 8
PURCHASES BY LOAD –SERVING ENTITIES IN THE STATE THAT RESULT FRO M THE 9
QUALIFYING DISTRIBUTED SOLAR EN ERGY GENERATIN G SYSTEMS AUTHORIZED 10
UNDER THE PROGRAM; 11

C. AVOIDED TRANSMISSION AND DISTRIBUTION LIN E 12
AND CAPACITY AUCTION COSTS; AND 13

D. SOCIETAL COSTS AND BENEFITS. 14

(F) IN DETERMININ G THE ADMINISTRATIVE LY DETERMINED INCENT IVE 15
FOR EACH MARKET SEGMENT, THE COMMISSION: 16

(1) MAY CONSIDER PRICE DIFFERENTIALS BASED ON: 17

(I) FEDERAL POLICIES AND PROGRAMS RELATING TO SOLAR 18
ENERGY GENERATING SYSTEMS; 19

(II) THE COST TO CONSTRUCT AN D FINANCE A SOLAR ENER GY 20
GENERATING SYSTEM; AND 21

(III) ANY OTHER CRITERIA DETERMINED BY THE COMMISSION; 22

(2) SHALL ESTABLISH MONE TARY VALUES THAT ENC OURAGE 23
MARKET DEVELOPMENT WHILE BALANCING RATEPAYER COSTS; AND 24

(3) SHALL STRIVE TO ACHIEVE MARKET DIVERSITY. 25

(G) IN ESTABLISHING THE C APACITY BLOCK FOR EA CH MARKET SEGMENT 26
UNDER SUBSECTION (E)(1) OF THIS SECTION, THE COMMISSION SHALL: 27

18 HOUSE BILL 345

(1) ENABLE MEANINGFUL AND CONTINUED MARKET GRO WTH FOR 1
EACH MARKET SEGMENT; 2

(2) CONSIDER THE VALUE OF REDUCING ELECTRICITY DEMAND AND 3
THE COST OF INSTALLI NG GENERATION CAPACI TY ON THE TRANSMISSI ON AND 4
DISTRIBUTION SYSTEMS; AND 5

(3) FOR EACH MARKET SEGMENT: 6

(I) ENSURE THAT THE NEXT CAPACITY BLOCK IS ESTABLISHED 7
AS SOON AS REASONABL Y POSSIBLE AFTER THE CURRENT CAPACITY BLOCK IS 8
FULLY RESERVED; AND 9

(II) MAINTAIN A CAPACITY BLOCK WAITLIST UNTIL THE NEXT 10
CAPACITY BLOCK IS ESTABLISHED AND ALLOW THE WAITLISTED PROJECTS TO HAVE 11
PRIORITY IN THE SUBSEQUENT CAPACITY BLOCK. 12

(H) (1) A QUALIFYING DISTRIBUT ED SOLAR ENERGY GENERATING 13
SYSTEM THAT GENERATES SREC–IIS UNDER THIS SECTION MAY NOT RECEIVE ANY 14
OTHER EQUIVALENT SOLAR ENERGY CREDITS. 15

(2) EXCEPT AS OTHERWISE P ROVIDED IN THIS SECT ION, THE 16
PROVISIONS OF § 7–703 OF THIS TITLE APPLY TO ENERGY GENERATED BY A 17
QUALIFYING DISTRIBUTED SO LAR ENERGY GENERATING SYSTEM UNDER THE 18
PROGRAM. 19

(3) AN SREC–II GENERATED BY A QUALIFYING DISTRIBUTED SOLAR 20
ENERGY GENERATING SYSTEM UN DER THE PROGRAM MAY BE INCLUDED IN 21
MEETING THE RENEWABLE ENERGY PORTFOLIO STANDARD ONLY FOR THE YEAR IN 22
WHICH THE SREC–II IS GENERATED OR THE FOLLOWING YEAR, AS DETERMINED BY 23
THE COMMISSION. 24

7–1234. 25

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 26
INDICATED. 27

(2) “PROGRAM” MEANS THE UTILITY–SCALE SREC–II PROGRAM. 28

(3) “QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING 29
SYSTEM” HAS THE MEANING STATED IN § 7–701(L–2) OF THIS TITLE. 30

(B) (1) THERE IS A UTILITY–SCALE SREC–II PROGRAM. 31
HOUSE BILL 345 19

(2) THE COMMISSION SHALL ADMINISTER THE PROGRAM. 1

(C) BY JANUARY 1, 2035, THE PROGRAM SHALL PROVIDE INCENTIVES FOR 2
THE DEVELOPMENT OF A T LEAST 2,000 MEGAWATTS OF SOLAR ENERGY 3
GENERATING CAPACITY BY QUALI FYING UTILITY –SCALE SOLAR ENERGY 4
GENERATING SYSTEMS. 5

(D) A QUALIFYING UTILITY –SCALE SOLAR ENERGY GENERATING SYSTEM 6
UNDER THE PROGRAM SHALL: 7

(1) HAVE A GENERATING CA PACITY THAT IS GREAT ER THAN 5 8
MEGAWATTS, AS MEASURED IN DIREC T CURRENT , OR ANOTHER GENERATING 9
CAPACITY AS SPECIFIED BY THE COMMISSION BUT AT LEAST 5 MEGAWATTS; 10

(2) BE CONNECTED TO THE ELECTRIC TRANSMISSIO N SYSTEM 11
SERVING MARYLAND; 12

(3) BE ELIGIBLE FOR INCL USION IN THE RENEWAB LE ENERGY 13
PORTFOLIO STANDARD; 14

(4) BE NEWLY CONSTRUCTED OR RECONSTRUCTED; AND 15

(5) MEET ANY OTHER CRITERIA DEVELOPED BY THE COMMISSION. 16

(E) (1) BY REGULATION OR ORDER, THE COMMISSION SHALL ESTABLISH 17
A COMPETITIVE SOLICI TATION PROCESS FOR T HE SELECTION OF PROJ ECTS FOR 18
THE CONSTRUCTION OF QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING 19
SYSTEMS UNDER THE PROGRAM. 20

(2) THE SOLICITATION PROC ESS SHALL REQUIRE TH AT 21
APPLICATIONS FOR THE CONSTRUCTION OF QUAL IFYING UTILITY –SCALE SOLAR 22
ENERGY GENERATING SYSTEMS INCLUDE: 23

(I) A PROPOSED SREC–II PRICING SCHEDULE THA T 24
SPECIFIES: 25

1. A FIXED RATE OR RATE SCHEDULE; AND 26

2. A FIXED PRICE FOR T HE ENVIRONMENTAL 27
ATTRIBUTES OF THE ENERGY GENERATED BY THE SYSTEM; AND 28

(II) A CERTIFICATION THAT , IF SELECTED UNDER TH E 29
20 HOUSE BILL 345

PROGRAM, THE CONSTRUCTION OF THE QUALIFYING UTILI TY–SCALE SOLAR 1
ENERGY GENERATING SYSTEM SHALL INCLUDE A COMMUNITY BENEFIT AGREEMENT 2
AS ESTABLISHED UNDER § 7–1202 OF THIS SUBTITLE. 3

(F) THE COMMISSION SHALL: 4

(1) IN ACCORDANCE WITH § 7–1232 OF THIS SUBTITLE, DETERMINE A 5
SCHEDULE FOR THE PRO CUREMENT OF QUALIFYING UTILITY–SCALE SOLAR 6
ENERGY GENERATING SYSTEMS UNDER THE PROGRAM THAT MEETS THE JANUARY 7
1, 2035, GOAL WHILE BALANCING RATEPAYER COSTS; AND 8

(2) ADOPT REGULATIONS TO IMPLEMENT THE PROGRAM, INCLUDING 9
REQUIREMENTS FOR: 10

(I) CERTIFICATION AS A Q UALIFYING UTILITY–SCALE SOLAR 11
ENERGY GENERATING SYSTEM; AND 12

(II) ANY MONEY TO BE HELD IN ESCROW DURING THE BIDDING 13
PROCESS. 14

(G) (1) BEGINNING JANUARY 1, 2027, AND EVERY 18 MONTHS 15
THEREAFTER, THE COMMISSION SHALL COMM ENCE SOLICITATIONS FOR THE 16
AWARD OF PROJECTS UNDER THE PROGRAM. 17

(2) THE SOLICITATION SHALL: 18

(I) AWARD CONTRACTS FOR THE CONSTRUCTION OF 19
QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING SYSTEMS FOR NOT LESS 20
THAN 205 MEGAWATTS PER YEAR FOR 8 YEARS AFTER THE FIRST CONTRACTS ARE 21
AWARDED; 22

(II) AWARD CONTRACTS WITH IN 6 MONTHS AFTER EACH 23
SOLICITATION; 24

(III) ENSURE AWARDED PROJE CTS RECEIVE A RENEWA BLE 25
ENERGY INCENTIVE PAY MENT, IN THE FORM OF AN SREC–II VALUE PER 26
MEGAWATT–HOUR FOR THE ENVIRON MENTAL ATTRIBUTE PRO DUCED BY THE 27
QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING SYSTEM, AND ANY OTHER 28
BENEFITS TO THE STATE PROVIDED BY THE SYSTEM, AS DETERMINED BY THE 29
COMMISSION; 30

(IV) ENSURE THAT THE LENGTH OF AN AWARD IS SUFFICIENT TO 31
ENCOURAGE LOW FINANC ING RATES , PROVIDE REASONABLE RISKS TO 32
HOUSE BILL 345 21

RATEPAYERS, AND ENABLE THE DEVEL OPMENT OF AFFORDABLE RENEWABLE 1
ENERGY; 2

(V) MITIGATE PRICE AND DELIVERY RISKS FOR CONSUMERS; 3

(VI) INCLUDE REQUIREMENTS DESIGNED TO ENSURE 4
SUCCESSFUL COMPLETIO N OF PROJECTS , INCLUDING THE IMPOSI TION OF 5
APPROPRIATE ESCROW F EES, BID MATURITY REQUIRE MENTS, REQUIRED 6
INTERCONNECTION MILESTONES, AND COMMERCIAL OPERATION MILESTONES; 7

(VII) ENSURE THE RECOGNITI ON OF THE ENVIRONMEN TAL AND 8
PUBLIC HEALTH BENEFIT S OF PROJECTS LOCATE D ON BROWNFIELDS OR 9
CONTAMINATED SITES; 10

(VIII) BE OPEN ON A NONDISC RIMINATORY BASIS TO ANY 11
PROJECT MEETING THE CRITERIA OF THIS SUBTITLE; AND 12

(IX) INCLUDE ANY OTHER REQUIREMENTS DEVELOPED BY THE 13
COMMISSION. 14

(3) THE COMMISSION MAY: 15

(I) ESTABLISH CONFIDENTIAL HIGH – AND LOW–APPLICATION 16
THRESHOLDS BEFORE CONDUCTING A SOLICIT ATION, PROVIDED THAT THE 17
THRESHOLDS PROMOTE FISCAL RESPONSIBILITY AND ENSURE THE LIKELIHOOD OF 18
SUCCESSFUL PROJECTS, AS DETERMINED BY THE COMMISSION; 19

(II) MAY INCLUDE A CAP ON THE RENEWABLE ENERGY 20
INCENTIVE UNDER PARAGRAPH (2)(III) OF THIS SUBSECTION; AND 21

(III) PROCURE MORE THAN TH E MINIMUM QUANTITY O F SOLAR 22
ENERGY REQUIRED UNDE R THE PROGRAM IF APPLICATIONS ARE BELOW THE 23
LOW–APPLICATION THRESHOLD ESTABLISHED IN ITEM (I) OF THIS PARAGRAPH. 24

(4) BEFORE ISSUING A SOLICITATI ON FOR PROJECTS UNDER THIS 25
SECTION, THE COMMISSION SHALL REQUEST THE COMMISSIONER OF LABOR AND 26
INDUSTRY TO DETERMINE THE PREVAILING WAGE RATE FOR EACH CLASSIFICATION 27
OF WORKER REQUIRED TO PERFORM WORK ON THE PROJECT IN ORDER TO INCLUDE 28
THAT DETERMINATION IN THE BIDDING PROCESS. 29

(5) THE COMMISSION, AT THE END OF THE SOLICITATION PROCESS, 30
SHALL: 31

22 HOUSE BILL 345

(I) RANK ALL APPLICATIONS RECEIVED BASED ON TH E 1
ESTIMATED COST OF THE PROJECT OR ESTIMATED COST BY CATEGORY; 2

(II) SELECT ONE OR MORE PROJECTS IN RANKED ORDER, UP TO 3
THE LIMIT ESTABLISHED BY THE COMMISSION; AND 4

(III) ADJUST THE NUMBER OF PROJEC TS SELECTED IF THE 5
COSTS ARE ABOVE OR BELOW T HE CONFIDENTIAL PRED ETERMINED THRESHOLDS 6
ESTABLISHED UNDER PARAGRAPH (3) OF THIS SUBSECTION. 7

(H) (1) THE COMMISSION, BY ORDER, SHALL APPROVE, CONDITIONALLY 8
APPROVE, OR DENY ONE OR MORE PROJECTS UNDER THIS SECTION W ITHIN 6 9
MONTHS AFTER THE CLOSE OF THE SOLICITATION PERIOD. 10

(2) AN ORDER APPROVING A PROJECT UNDER THIS SECTION SHALL: 11

(I) SPECIFY THE SREC–II FIXED PRICING SCHEDU LE FOR 12
ENERGY GENERATED BY THE PROJECT; 13

(II) SPECIFY THE DURATION OF THE SREC–II FIXED PRICING 14
SCHEDULE, NOT TO EXCEED 15 YEARS; 15

(III) SPECIFY THE TOTAL NUMBER OF SREC–IIS THAT MAY BE 16
SOLD EACH YEAR FROM THE Q UALIFYING UTI LITY–SCALE SOLAR ENERGY 17
GENERATING SYSTEM; 18

(IV) PROVIDE THAT NO PAYM ENT MAY BE MADE FOR AN 19
SREC–II UNTIL THE QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING 20
SYSTEM IS OPERATIONAL AND GENERATING ENERGY; AND 21

(V) PROVIDE THAT THE STATE SHALL BE HELD HARMLESS FOR 22
ANY COST OVERRUNS AS SOCIATED WITH THE CO NSTRUCTION AND OPERA TION OF 23
THE QUALIFYING UTILITY–SCALE SOLAR ENERGY GENERATING SYSTEM. 24

(3) A PROJECT APPROVED UNDER THIS SECTION SHALL REQUIRE: 25

(I) COMPLIANCE WITH THE APPLICABLE PREVA ILING WAGE 26
RATES DETERMINED UNDER THIS SECTION; 27

(II) COMPLIANCE WITH THE REQUIREMENTS OF §§ 17–219 28
THROUGH 17–221 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; AND 29

(III) THE CONTRACTORS AND SUBCONTRACTORS TO INCLUDE 30
HOUSE BILL 345 23

THE REQUIREMENTS OF THIS SECTION IN ANY CONTRACTS FOR AN Y OTHER 1
SUBCONTRACTORS BELOW THE PRIME CONTRACTORS OR SUBCONTRACTORS. 2

(4) THE COMMISSION, IN CONSULTATION WITH THE COMMISSIONER 3
OF LABOR AND INDUSTRY, SHALL ADOPT REGULATIONS TO CARRY OUT THIS 4
SUBSECTION, INCLUDING: 5

(I) PROVISIONS RELATING TO THE RE PORTING OF 6
NONCOMPLIANCE OR VIOLATIONS OF THE PREVAILING WAGE REQUIREMENTS; 7

(II) PROVISIONS ALLOWING THE USAGE OF THE ESC ROW 8
ACCOUNT UNDER THIS SUBTITLE TO ISSUE BACKPAY TO WORKERS; AND 9

(III) PROVISIONS ESTABLISH ING LIQUIDATED D AMAGES 10
EQUIVALENT TO THE PROVISIONS IN §§ 17–220 AND 17–222 OF THE STATE FINANCE 11
AND PROCUREMENT ARTICLE. 12

(I) (1) UNDER THE PROGRAM, A QUALIFYING UTILITY –SCALE SOLAR 13
ENERGY GENERATING SYSTEM SHALL GENERATE ONLY SREC–IIS. 14

(2) A QUALIFYING UTILITY –SCALE SOLAR ENERGY G ENERATING 15
SYSTEM THAT GENERATES SREC–IIS UNDER THE PROGRAM MAY NOT RECEIVE ANY 16
EQUIVALENT RENEWABLE ENERGY CREDITS OF ANY TYPE. 17

(3) EXCEPT AS OTHERWISE P ROVIDED UNDER THIS S ECTION, THE 18
PROVISIONS OF § 7–703 OF THIS TITLE APPLY TO SREC–IIS GENERATED UNDER 19
THE PROGRAM. 20

(4) UNDER THE PROGRAM: 21

(I) AN SREC–II GENERATED BY A QUALIFYING UTILITY–SCALE 22
SOLAR ENERGY GENERATING SYSTEM MAY BE APPLIED ONLY TOWARD MEETING THE 23
RENEWABLE ENERGY POR TFOLIO STANDARD FOR THE YEAR IN WHICH TH E 24
SREC–II IS GENERATED OR THE FOLLOWING YEAR, ON DETERMINATION BY THE 25
COMMISSION; AND 26

(II) AN OWNER OF A QUALIF YING UTILITY–SCALE SOLAR 27
ENERGY GENERATING SYSTEM PRODUCING SREC–IIS MAY NOT SELL, ALIENATE, 28
OR DISPOSE OF ANY OF THE ENVIRONMENTAL ATTRIBUTES ASSOCIATED WITH THE 29
ENERGY GENERATED BY THE SYSTEM. 30

(J) (1) AN APPLICATION FOR A QUALIFYING UTILITY –SCALE SOLAR 31
ENERGY GENERATING SY STEM UNDER THIS SECT ION SHALL BE SUBJECT TO A 32
24 HOUSE BILL 345

COMMUNITY BENEFIT AGREEMENT. 1

(2) A COMMUNITY BENEFIT AGREEMENT SHALL: 2

(I) PROMOTE INCREASED OPPORTUNITIES FOR LOCAL, SMALL, 3
MINORITY, WOMEN–OWNED, AND VETERAN –OWNED BUSINESSES IN THE CLEAN 4
ENERGY INDUSTRY; 5

(II) ENSURE THE TIMELY , SAFE, AND EFFICIENT COMPLE TION 6
OF THE PROJECT BY FACILITATING THE HIRING OF HIGHLY SKILLED WORKERS WHO 7
SHALL BE PAID NOT LE SS THAN THE PREVAILI NG WAGE, AS DETERMINED BY THE 8
COMMISSIONER OF LABOR AND INDUSTRY UNDER TITLE 17, SUBTITLE 2 OF THE 9
STATE FINANCE AND PROCUREMENT ARTICLE; 10

(III) GUARANTEE THAT THE CONSTRUCTION WORK ASSOCIATED 11
WITH THE PROJECT IS SUBJECT TO AN AGREEMENT THAT: 12

1. ESTABLISHES THE TERM S AND CONDITIONS OF 13
EMPLOYMENT AT THE CONSTRUCTION SITE; 14

2. GUARANTEES AGAINST S TRIKES, LOCKOUTS, OR 15
SIMILAR DISRUPTIONS; 16

3. ENSURES THAT ALL WOR K PERFORMED ON THE 17
PROJECT CONFORMS TO ALL RELEVANT FEDERAL AND STATE LAWS, RULES, AND 18
REGULATIONS; 19

4. CREATES MUTUALLY BIN DING PROCEDURES FOR 20
RESOLVING LABOR DISPUTES ARISING DURING THE TERM OF THE PROJECT; 21

5. SETS FORTH MECHANISMS FOR LABOR–MANAGEMENT 22
COOPERATION ON MATTE RS OF MUTUAL INTERES T, INCLUDING PRODUCTIVI TY, 23
QUALITY OF WORK, SAFETY, AND HEALTH; AND 24

6. BINDS ALL CONTRACTORS AND SUBCONTRACTORS TO 25
THE TERMS OF THE AGR EEMENT THROUGH THE INCLUSIO N OF APPROPRIATE 26
PROVISIONS IN ALL RELEVANT SOLICITATION AND CONTRACT DOCUMENTS; 27

(IV) PROMOTE SAFE COMPLET ION OF THE PROJECT B Y 28
ENSURING THAT AT LEAST 80 PERCENT OF THE CRAFT WORKERS HAVE COMPLETED 29
AN OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION’S 10–HOUR SAFETY 30
COURSE; 31

HOUSE BILL 345 25

(V) PROMOTE CAREER TRAIN ING OPPORTUNITIES IN THE 1
CONSTRUCTION INDUSTR Y FOR LOCAL RESIDENTS , VETERANS, WOMEN, 2
MINORITIES, AND FORMERLY INCARCERATED INDIVIDUALS; 3

(VI) INCLUDE PROVISIONS F OR LOCAL HIRING AND HIRING 4
HISTORICALLY DISADVANTAGED INDIVIDUALS; AND 5

(VII) ENSURE A STEADY SUPP LY OF LABOR AND PROM OTE 6
WORKFORCE DEVELOPMENT BY REQUIRING THE U SE OF APPRENTICES EN ROLLED 7
IN REGISTERED APPRENTICESHIP PROGRAMS, AS DEFINED IN TITLE 11, SUBTITLE 8
4 OF THE LABOR AND EMPLOYMENT ARTICLE. 9

(K) ANY MISREPRESENTATION OR OMISSION INCLUDED IN THE REPORTING 10
REQUIRED BY A CONTRA CT AWARDED UNDER THI S SECTION SHALL CONS TITUTE A 11
FALSE RECORD OR STATEMENT MATERIAL TO A FALSE OR FRAUDULENT CLAIM FOR 12
PURPOSES OF § 8–102 OF THE GENERAL PROVISIONS ARTICLE. 13

7–1235. 14

(A) THE COMMISSION, BY REGULATION OR ORDER, SHALL: 15

(1) DIRECT ELECTRIC ITY SUPPLIERS , IN CONSULTATION WITH THE 16
COMMISSION, TO JOINTLY SELECT AN ESCROW ADMINISTRATOR; 17

(2) ESTABLISH AN ESCROW ACCOUNT, UNDER THE SUPERVISIO N OF 18
THE ESCROW ADMINISTR ATOR, TO ENSURE THE SECURE AND TRANSPARENT 19
TRANSFER OF REVENUES AND SRECS, REGARDLESS OF TYPE , PROCURED UNDER 20
THIS SUBTITLE; 21

(3) ESTABLISH A NONBYPAS SABLE SURCHARGE THAT ALLOWS AN 22
ELECTRIC COMPANY TO RECOVER ALL COSTS ASSOCIATED WITH THE PURCHASE OF 23
SRECS AND SREC–IIS FROM CUSTOMERS IN THE SERVICE TERRITOR Y OF THE 24
ELECTRIC COMPANY THAT IS ADDED TO THE SUPPLY RATE ON A CUS TOMER’S 25
UTILITY BILL; AND 26

(4) ESTABLISH A MECHANISM THAT ANNUALLY: 27

(I) DETERMINES EACH ELEC TRIC COMPANY’S SREC AND 28
SREC–II PURCHASE OBLIGATION S UNDER THIS SUBTITL E FOR THE FOLLOWING 29
COMPLIANCE YEAR FOR SRECS AND SREC–IIS GENERATED BY SOLAR ENERGY 30
GENERATING SYSTEMS THAT BEGIN OPERATION AFTER JANUARY 1, 2028; 31

(II) ADJUSTS THE RENEWABLE ENERGY PORTFOLIO STANDARD 32
26 HOUSE BILL 345

OBLIGATION TO ACCOMMODATE A SHORTFALL OR EXCESS IN EARLIER YEARS THAT 1
RESULTS FROM THE VAR IATION BETWEEN THE QUANTITY OF SRECS AND 2
SREC–IIS, CALCULATED FOR THE RENEWABLE ENERGY PORTFOLIO STANDARD 3
OBLIGATION AND THE QUANTITY OF SRECS AND SREC–IIS SOLD UNDER THIS 4
SUBTITLE; AND 5

(III) ADJUSTS THE NONBYPAS SABLE SURCHARGE FOR 6
PROJECTED AND PAST PURCHASE OBLIGATIONS. 7

(B) (1) EACH ELECTRIC COMPANY SHALL PROCURE FROM T HE ESCROW 8
ACCOUNT UNDER THIS S ECTION THE NUMBER OF SRECS AND SREC–IIS TO 9
SATISFY THE ELECTRIC COMPANY ’S OBLIGATIONS UNDER THIS SUBTITLE AND § 10
7–709.2 OF THIS TITLE. 11

(2) SUBJECT TO ANY ESCROW ACCOUNT RESERVE REQU IREMENT 12
ESTABLISHED BY THE COMMISSION, IF THERE ARE INSUFFI CIENT SRECS A ND 13
SREC–IIS UNDER THIS SUBTITLE AVAILABLE FOR PURCHASE, ANY OVERPAYMENT 14
SHALL BE DISTRIBUTED BACK TO THE ELECTRIC COMPANY TO BE REFUNDED OR 15
CREDITED TO EACH CUSTO MER BASED ON THE CUS TOMER’S CONSUMPTION OF 16
ELECTRICITY THAT IS SUBJECT TO T HE RENEWABLE ENERGY PORTFOLIO 17
STANDARD. 18

(3) THE CALCULATION OF AN ELECTRIC COMPANY’S SREC AND 19
SREC–II PURCHASE OBLIGATION S UNDER THIS SUBTITLE FOR SRECS AND 20
SREC–IIS GENERATED BY SOLAR E NERGY GENERATING SYS TEMS THAT BEGIN 21
OPERATION AFTER JANUARY 1, 2028, SHALL BE BASED ON FI NAL ELECTRICITY 22
SALES, AS DETERMINED BY THE COMMISSION. 23

(4) ANY INTEREST EARNED IN THE ESCROW ACCOUNT SHALL REMAIN 24
IN THE ACCOUNT AND MAY NOT BE REDIRECTED TO ANY OTHER FUND. 25

(C) SUBJECT TO ANY ESCROW ACCOUNT RESERVE REQU IREMENT 26
ESTABLISHED BY THE COMMISSION, COMPLIANCE FEES PAID INTO THE ESCROW 27
ACCOUNT ESTABLISHED IN THIS SECTION SHAL L BE DISTRIBUTED TO ELECTRIC 28
COMPANIES TO PAY FOR F UTURE SRECS AND SREC–IIS PROCURED UNDER THIS 29
SUBTITLE. 30

Article – Tax – General 31

8–404. 32

(a) Each public service company that, in a calendar year, has gross receipts 33
derived from business in the State or delivers electricity or natural gas for final 34
HOUSE BILL 345 27

consumption in the State shall complete, under oath, and file with the Department a public 1
service company franchise tax return, on or before April 15th of the next year. 2

(b) (1) Each public service company that reasonably expects its public service 3
company franchise tax for a year to exceed $1,000 shall complete, under oath, and file with 4
the Department a declaration of estimated tax, on or before April 15 of that year. 5

(2) A public service company required under paragraph (1) of this 6
subsection to file a declaration of estimated tax for a taxable year shall complete and file 7
with the Department a quarterly estimated tax return on or before June 15, September 15, 8
and December 15 of that year. 9

(c) A public service company shall file with the return an attachment that states 10
any information that the Department requires to determine gross receipts derived from 11
business in the State or kilowatt hours or therms of natural gas delivered for final 12
consumption in the State. 13

(D) A PUBLIC SERVICE COMPANY THAT IS ENGAGED IN THE TRANSMISSION, 14
DISTRIBUTION, OR DELIVERY OF ELECTRICITY IN THE STATE SHALL FILE WITH THE 15
RETURN THE GROSS RECEIPTS DERIVED FROM CUSTOMERS IN THE STATE THAT USE 16
MORE THAN 100 MEGAWATTS OF ELECTRICITY. 17

8–408. 18

The Department shall: 19

(1) administer the laws that relate to the public service company franchise 20
tax; 21

(2) adopt reasonable regulations to administer the provisions of laws that 22
relate to the public service company franchise tax; 23

(3) design the returns and forms that, on completion, provide the 24
information required for the administration of the public service company franchise tax 25
laws; 26

(4) collect the public service company franchise tax revenue, including 27
penalties and interest; 28

(5) ALLOCATE 75% OF THE PUBLIC SERVI CE COMPANY FRANCHISE 29
TAX REVENUES ATTRIBUTED TO CUSTOM ERS THAT USE MORE TH AN 100 30
MEGAWATTS OF ELECTRI CITY THAT IS COLLECT ED FROM PUBLIC SERVI CE 31
COMPANIES THAT ARE E NGAGED IN THE TRANSM ISSION, DISTRIBUTION, OR 32
DELIVERY OF ELECTRICITY IN THE STATE TO THE ESCROW ACCOUNT ESTABLISHED 33
UNDER § 7–1235 OF THE PUBLIC UTILITIES ARTICLE; 34

28 HOUSE BILL 345

(6) EXCEPT AS PROVIDED I N ITEM (5) OF THIS SECTION , pay that 1
revenue into the General Fund of the State; and 2

[(6)] (7) certify to the Comptroller that revenue. 3

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 4
October 1, 2026. 5