Renewable Energy Portfolio Standard - Nuclear Energy and Renaming

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0970*

HOUSE BILL 970
M5, C5 6lr1865

By: Delegates T. Morgan, Adams, Anderson, Arentz, Beauchamp, Buckel,
Ciliberti, Griffith, Hartman, Hinebaugh, Howard, Hutchinson, Jacobs,
Kipke, R. Long, Mangione, Metzgar, Miller, Nkongolo, Pippy, Reilly, Rose,
Schmidt, Tomlinson, Valentine, and Wivell
Introduced and read first time: February 6, 2026
Assigned to: Environment and Transportation

A BILL ENTITLED

AN ACT concerning 1

Renewable Energy Portfolio Standard – Nuclear Energy and Renaming 2

FOR the purpose of renaming the “renewable energy portfolio standard” to be the “clean 3
energy portfolio standard”; renaming “renewable energy credits” to be “clean energy 4
credits”; adding energy generated from certain nuclear energy generating station s 5
as a T ier 2 renewable source eligible for inclusion in the clean energy portfolio 6
standard; applying this Act retroactively; and generally relating to the clean energy 7
portfolio standard and nuclear energy. 8

BY repealing 9
Article – Public Utilities 10
Section 7–701(m) and (n) 11
Annotated Code of Maryland 12
(2025 Replacement Volume and 2025 Supplement) 13

BY renumbering 14
Article – Public Utilities 15
Section 7–701(c) through (e–1), (f) through (g –1), (h) through (l), (o) through (p –1), 16
and (q) through (t) 17
to be Section 7–701(f) through (x), respectively 18
Annotated Code of Maryland 19
(2025 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, with amendments, 21
Article – Natural Resources 22
Section 5–102(a)(9) 23
Annotated Code of Maryland 24
(2023 Replacement Volume and 2025 Supplement) 25
2 HOUSE BILL 970

BY repealing and reenacting, with amendments, 1
Article – Public Utilities 2
Section 7–306(g)(5), 7–306.2(b)(1), 7–510.3(k)(1), 7–702, 7–703(a), (b), (d), (e), and 3
(f)(2), 7–704, 7–704.1(a)(4), (c)(4), (e)(1)(i) and (xiii), (f)(1)(iii) and (2), (g), (h), 4
(j)(3), (k)(2), and (l)(1), (2), (3)(i) and (iii), and (4), 7 –704.2(a), (b), and (c), 5
7–704.4(b)(1) and (c), 7 –705, 7–706(a) and (b), 7 –707(a), (c)(1), (d)(2)(iii) and 6
(3)(ii)3. and (iii), (e), (f)(2), and (g)(4), 7–708, 7–709, 7–709.1(a), (c), (d)(2), (e), 7
and (i), and 7–710 8
Annotated Code of Maryland 9
(2025 Replacement Volume and 2025 Supplement) 10

BY repealing and reenacting, without amendments, 11
Article – Public Utilities 12
Section 7–701(a) and 7–704.1(f)(3) 13
Annotated Code of Maryland 14
(2025 Replacement Volume and 2025 Supplement) 15

BY adding to 16
Article – Public Utilities 17
Section 7–701(c), (d), and (e) 18
Annotated Code of Maryland 19
(2025 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, with amendments, 21
Article – Public Utilities 22
Section 7–701(k) and (x) 23
Annotated Code of Maryland 24
(2025 Replacement Volume and 2025 Supplement) 25
(As enacted by Section 2 of this Act) 26

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 27
That Section(s) 7 –701(m) and (n) of Article – Public Utilities of the Annotated Code of 28
Maryland be repealed. 29

SECTION 2. AND BE IT FURTHER ENACTED, That Section(s) 7 –701(c) through 30
(e–1), (f) through (g –1), (h) through (l), (o) through (p –1), and (q) through (t) of Article – 31
Public Utilities of the Annotated Code of Maryland be renumbered to be Section(s) 7–701(f) 32
through (x), respectively. 33

SECTION 3. AND BE IT FURTHER ENACTED, That th e Laws of Maryland read 34
as follows: 35

Article – Natural Resources 36

5–102. 37

HOUSE BILL 970 3

(a) The General Assembly finds that: 1

(9) Forests are a renewable resource that help the State meet its renewable 2
energy goals that are consistent with the State’s: 3

(i) Green power goal for State facilities; 4

(ii) [Renewable] CLEAN Energy Portfolio Standard; 5

(iii) Healthy Air Act; and 6

(iv) Maryland Clean Energy Incentive Act of 2006; and 7

Article – Public Utilities 8

7–306. 9

(g) (5) An eligible customer –generator or the eligible customer –generator’s 10
assignee shall own and have title to all renewable energy attributes or [renewable] CLEAN 11
energy credits associated with any electricity produced by its electric generating system. 12

7–306.2. 13

(b) The General Assembly finds that: 14

(1) community solar energy generating systems: 15

(i) provide residents and businesses, including those that lease 16
property, increased access to local solar electricity while encouraging private investment in 17
solar resources; 18

(ii) enhance continued diversification of the State’s energy resource 19
mix to achieve the State’s [renewable] CLEAN energy portfolio standard and Greenhouse 20
Gas Emissions Reduction Act goals; and 21

(iii) provide electric companies and ratepayers the opportunity to 22
realize the many benefits associated with distributed energy; and 23

7–510.3. 24

(k) (1) Except for the purposes of meeting the requirements of the [renewable] 25
CLEAN energy portfolio standard under Subtitle 7 of this title, a community choice 26
aggregator may not be considered to be an electricity supplier under § 7 –507(a) of this 27
subtitle. 28

7–701. 29

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(a) In this subtitle the following words have the meanings indicated. 1

(C) “CLEAN ENERGY CREDIT” OR “CREDIT” MEANS A CREDIT EQUAL TO THE 2
GENERATION ATTRIBUTE S OF 1 MEGAWATT–HOUR OF ELECTRICITY THAT IS 3
DERIVED FROM A TIER 1 RENEWABLE SOURCE OR A TIER 2 RENEWABLE SOURCE 4
THAT IS: 5

(1) LOCATED IN THE PJM REGION; 6

(2) LOCATED OUTSIDE THE AREA DES CRIBED IN ITEM (1) OF THIS 7
SUBSECTION, BUT IN A CONTROL AREA THAT IS ADJACENT TO THE PJM REGION, IF 8
THE ELECTRICITY IS DELIVERED INTO THE PJM REGION; OR 9

(3) LOCATED ON THE OUTER CONTINENTAL SHELF OF THE ATLANTIC 10
OCEAN IN AN AREA THAT: 11

(I) THE UNITED STATES DEPARTMENT OF THE INTERIOR 12
DESIGNATES FOR LEASI NG AFTER COORDINATIO N AND CONSULTATION W ITH THE 13
STATE IN ACCORDANCE WITH § 388(A) OF THE ENERGY POLICY ACT OF 2005; AND 14

(II) IS BETWEEN 10 AND 80 MILES OFF THE COAST OF THE 15
STATE. 16

(D) “CLEAN ENERGY PORTFOLIO STANDARD” OR “STANDARD” MEANS THE 17
PERCENTAGE OF ELECTR ICITY SALES AT RETAI L IN THE STATE THAT IS TO BE 18
DERIVED FROM CLEAN ENERGY SOURCES IN ACCORDANCE WITH § 7–703(B) OF THIS 19
SUBTITLE. 20

(E) “CLEAN ENERGY SOURCE” MEANS: 21

(1) A TIER 1 RENEWABLE SOURCE; OR 22

(2) A TIER 2 RENEWABLE SOURCE. 23

(k) “Offshore wind [renewable] CLEAN energy credit” or [“OREC”] “OCEC” 24
means a [renewable] CLEAN energy credit equal to the generation attributes of 1 25
megawatt–hour of electricity that is derived from offshore wind energy. 26

(x) “Tier 2 renewable source” means: 27

(1) hydroelectric power other than pump storage generation; AND 28

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(2) POWER GENERATED BY A NUCLEAR ENERGY GENERATING 1
STATION, INCLUDING A SMALL MO DULAR REACTOR , CONNECTED WITH THE 2
ELECTRIC DISTRIBUTION SYSTEM SERVING THE STATE. 3

7–702. 4

(a) It is the intent of the General Assembly to: 5

(1) recognize the economic, environmental, fuel dive rsity, and security 6
benefits of [renewable] CLEAN energy resources; 7

(2) reduce greenhouse gas emissions and eliminate carbon –fueled 8
generation from the State’s electric grid by using these resources; 9

(3) establish a market for electricity from these resources in Maryland; and 10

(4) lower the cost to consumers of electricity produced from these resources. 11

(b) The General Assembly finds AND DECLARES that: 12

(1) the benefits of electricity from [renewable] CLEAN energy resources, 13
including long –term decreased emissions, a healthier environment, increased energy 14
security, and decreased reliance on and vulnerability from imported energy sources, accrue 15
to the public at large; 16

(2) electricity suppliers and consum ers share an obligation to develop a 17
minimum level of these resources in the electricity supply portfolio of the State; and 18

(3) the State needs to increase its reliance on [renewable] CLEAN energy 19
in order to: 20

(i) reduce greenhouse gas emissions and meet the State’s 21
greenhouse gas emissions reduction goals under § 2–1205 of the Environment Article; and 22

(ii) provide opportunities for small, minority, women –owned, and 23
veteran–owned businesses to participate in and develop a highly skilled workforce for clean 24
energy industries in the State. 25

7–703. 26

(a) (1) (i) The Commission shall implement a [renewable] CLEAN energy 27
portfolio standard that, except as provided under paragraphs (2) and (3) of this subsection, 28
applies to all retail electricity sales in the State by electricity suppliers. 29

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(ii) If the standard becomes applicable to electricity sold to a 1
customer after the start of a calendar year, the standard does not apply to electricity sold 2
to the customer during that portion of the year before the standard became applicable. 3

(2) A [renewable] CLEAN energy portfolio standard may not apply to 4
electricity sales at retail by any electricity supplier: 5

(i) in excess of 300,000,000 kilowatt–hours of industrial process load 6
to a single customer in a year; 7

(ii) to residential customers in a region of the State in which 8
electricity prices for residential customers are subject to a freeze or cap contained in a 9
settlement agreement entered into under § 7 –505 of this title until the freeze or cap h as 10
expired; or 11

(iii) to a customer served by an electric cooperative under an 12
electricity supplier purchase agreement that existed on October 1, 2004, until the 13
expiration of the agreement, as the agreement may be renewed or amended. 14

(3) The portion of a [renewable] CLEAN energy portfolio standard that 15
represents offshore wind: 16

(i) applies only to the distribution sales of electric companies; and 17

(ii) may not apply to distribution sales by any electric company in 18
excess of: 19

1. 75,000,000 kilowatt–hours of industrial process load to a 20
single customer in a year; and 21

2. 3,000 kilowatt –hours of electricity in a month to a 22
customer who is an owner of agricultural land and files an Internal Revenue Service form 23
1040, schedule F. 24

(b) Except as provided in subsections (e) and (f) of this section, the [renewable] 25
CLEAN energy portfolio standard shall be as follows: 26

(1) in 2006, 1% from Tier 1 renewable sources and 2.5% from Tier 2 27
renewable sources; 28

(2) in 2007, 1% from Tier 1 renewable sources and 2.5% from Tier 2 29
renewable sources; 30

(3) in 2008, 2.005% from Tier 1 renewable sources, including at least 31
0.005% derived from solar energy, and 2.5% from Tier 2 renewable sources; 32

HOUSE BILL 970 7

(4) in 2009, 2.01% from Tier 1 renewable sources, including at least 0.01% 1
derived from solar energy, and 2.5% from Tier 2 renewable sources; 2

(5) in 2010, 3.025% from Tier 1 renewable sources, including at least 3
0.025% derived from solar energy, and 2.5% from Tier 2 renewable sources; 4

(6) in 2011, 5.0% from Tier 1 renewable sources, including at least 0.05% 5
derived from solar energy, and 2.5% from Tier 2 renewable sources; 6

(7) in 2012, 6.5% from Tier 1 renewable sources, including at least 0.1% 7
derived from solar energy, and 2.5% from Tier 2 renewable sources; 8

(8) in 2013, 8.2% from Tier 1 renewable sources, including at least 0.25% 9
derived from solar energy, and 2.5% from Tier 2 renewable sources; 10

(9) in 2014, 10.3% from Tier 1 renewable sources, including at least 0.35% 11
derived from solar energy, and 2.5% from Tier 2 renewable sources; 12

(10) in 2015, 10.5% from Tier 1 renewable sources, including at least 0.5% 13
derived from solar energy, and 2.5% from Tier 2 renewable sources; 14

(11) in 2016, 12.7% from Tier 1 renewable sources, inc luding at least 0.7% 15
derived from solar energy, and 2.5% from Tier 2 renewable sources; 16

(12) in 2017: 17

(i) 13.1% from Tier 1 renewable sources, including: 18

1. at least 1.15% derived from solar energy; and 19

2. an amount set by the Commission u nder § 7 –704.2(a) of 20
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 21

(ii) 2.5% from Tier 2 renewable sources; 22

(13) in 2018: 23

(i) 15.8% from Tier 1 renewable sources, including: 24

1. at least 1.5% derived from solar energy; and 25

2. an amount set by the Commission under § 7 –704.2(a) of 26
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 27

(ii) 2.5% from Tier 2 renewable sources; 28

(14) in 2019: 29
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(i) 20.7% from Tier 1 renewable sources, including: 1

1. at least 5.5% derived from solar energy; and 2

2. an amount set by the Commission under § 7 –704.2(a) of 3
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 4

(ii) 2.5% from Tier 2 renewable sources; 5

(15) in 2020: 6

(i) 28% from Tier 1 renewable sources, including: 7

1. at least 6% derived from solar energy; and 8

2. an amount set by the Commission under § 7 –704.2(a) of 9
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 10

(ii) 2.5% from Tier 2 renewable sources; 11

(16) in 2021: 12

(i) 30.8% from Tier 1 renewable sources, including: 13

1. at least 7.5% derived from solar energy; and 14

2. an amount set by the Commission under § 7 –704.2(a) of 15
this subtitle derived from offshore wind energy; and 16

(ii) 2.5% from Tier 2 renewable sources; 17

(17) in 2022: 18

(i) 30.1% from Tier 1 renewable sources, including: 19

1. at least 5.5% derived from solar energy; and 20

2. an amount set by the Commission under § 7 –704.2(a) of 21
this subtitle derived from offshore wind energy; and 22

(ii) 2.5% from Tier 2 renewable sources; 23

(18) in 2023: 24

(i) 31.9% from Tier 1 renewable sources, including: 25

HOUSE BILL 970 9

1. at least 6% derived from solar energy; 1

2. an amount set by the Commis sion under § 7 –704.2(a) of 2
this subtitle derived from offshore wind energy; and 3

3. at least 0.05% derived from post –2022 geothermal 4
systems; and 5

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

(19) in 2024: 7

(i) 33.7% from Tier 1 renewable sources, including: 8

1. at least 6.5% derived from solar energy; 9

2. an amount set by the Commission under § 7 –704.2(a) of 10
this subtitle derived from offshore wind energy; and 11

3. at least 0.15% derived from post –2022 geothermal 12
systems; and 13

(ii) 2.5% from Tier 2 renewable sources; 14

(20) in 2025: 15

(i) 35.5% from Tier 1 renewable sources, including: 16

1. at least 7% derived from solar energy; 17

2. an amount set by the Commission under § 7 –704.2(a) of 18
this subtitle, not to exceed 10%, derived from offshore wind energy; and 19

3. at least 0.25% derived from post –2022 geothermal 20
systems; and 21

(ii) 2.5% from Tier 2 renewable sources; 22

(21) in 2026: 23

(i) 38% from Tier 1 renewable sources, including: 24

1. at least 8% derived from solar energy; 25

2. an amount set by the Commission under § 7 –704.2(a) of 26
this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 27
2 offshore wind projects; and 28
10 HOUSE BILL 970

3. at least 0.5% derived from post–2022 geothermal systems; 1
and 2

(ii) 2.5% from Tier 2 renewable sources; 3

(22) in 2027: 4

(i) 41.5% from Tier 1 renewable sources, including: 5

1. at least 9.5% derived from solar energy; 6

2. an amount set by the Commission under § 7 –704.2(a) of 7
this subtitle derived from offshore wind energy, including at least 400 megawatts of Round 8
2 offshore wind projects; and 9

3. at least 0.75% derived from post –2022 geothermal 10
systems; and 11

(ii) 2.5% from Tier 2 renewable sources; 12

(23) in 2028: 13

(i) 43% from Tier 1 renewable sources, including: 14

1. at least 11% derived from solar energy; 15

2. an amount set by the Commission under § 7 –704.2(a) of 16
this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 17
2 offshore wind projects; and 18

3. at least 1% derived from post –2022 geothermal systems; 19
and 20

(ii) 2.5% from Tier 2 renewable sources; 21

(24) in 2029: 22

(i) 49.5% from Tier 1 renewable sources, including: 23

1. at least 12.5% derived from solar energy; 24

2. an amount set by the Commission under § 7 –704.2(a) of 25
this subtitle derived from offshore wind energy, including at least 800 megawatts of Round 26
2 offshore wind projects; and 27

HOUSE BILL 970 11

3. at least 1% derived from post –2022 geothermal systems; 1
and 2

(ii) 2.5% from Tier 2 renewable sources; and 3

(25) in 2030 and later: 4

(i) 50% from Tier 1 renewable sources, including: 5

1. at least 14.5% derived from solar energy; 6

2. an amount set by the Commission under § 7 –704.2(a) of 7
this subtitle derived from o ffshore wind energy, including at least 1,200 megawatts of 8
Round 2 offshore wind projects; and 9

3. at least 1% derived from post –2022 geothermal systems; 10
and 11

(ii) 2.5% from Tier 2 renewable sources. 12

(d) (1) Subject to subsections (a) and (c) of this section, an electricity supplier 13
shall meet the [renewable] CLEAN energy portfolio standard for all Tier 1 and Tier 2 14
renewable sources except offshore wind by accumulating the equivalent amount of 15
[renewable] CLEAN energy credits that equal the percentages required under this section. 16

(2) An electric company shall meet the [renewable] CLEAN energy portfolio 17
standard for offshore wind in accordance with § 7–704.2 of this subtitle. 18

(e) (1) The required percentage of an electric cooperative’s [renewable] CLEAN 19
energy portfolio standard derived from solar energy shall be 2.5% in 2020 and later. 20

(2) The required percentage of a municipal electric utility’s [renewable] 21
CLEAN energy portfolio standard shall be: 22

(i) in 2021: 23

1. 20.4% from Tier 1 renewable sources, including: 24

A. at least 1.95% derived from solar energy; and 25

B. an amount set by the Commission under § 7 –704.2(a) of 26
this subtitle, not to exceed 2.5%, derived from offshore wind energy; and 27

2. 2.5% from Tier 2 renewable sources; and 28

12 HOUSE BILL 970

(ii) in 2022 and later, 20.4% from Tier 1 renewable sources, 1
including: 2

1. at least 1.95% derived from solar energy; and 3

2. an amount set by the Commission under § 7 –704.2(a) of 4
this subtitle, not to exceed 2.5%, derived from offshore wind energy. 5

(f) (2) At least 25% of the required percentage of the [renewable] CLEAN 6
energy portfolio STANDARD for each year as set forth in subsection (b) of this section 7
derived from p ost–2022 geothermal systems shall be derived from systems that were 8
installed: 9

(i) at single or multifamily housing units that qualified as low or 10
moderate income housing on the date the system was installed on the property; or 11

(ii) at institutions that primarily serve low and moderate income 12
individuals and families, including: 13

1. schools with a majority of students who are eligible for free 14
and reduced price meals; 15

2. hospitals with a majority of patients eligible for financial 16
assistance or who are enrolled in Medicaid; and 17

3. other institutions that serve individuals and families 18
where the majority of those served are eligible based on income for federal or State safety 19
net programs. 20

7–704. 21

(a) (1) Energy from a Tier 1 renewable source: 22

(i) is eligible for inclusion in meeting the [renewable] CLEAN 23
energy portfolio standard regardless of when the generating system or facility was placed 24
in service; and 25

(ii) may be applied to the percentage requirements of the standard 26
for either Tier 1 renewable sources or Tier 2 renewable sources. 27

(2) (i) Energy from a Tier 1 renewable source under [§ 7–701(s)(1), (5), 28
or (9)] § 7–701(W)(1), (5), OR (9) of this subtitle is eligible for inclusion in meeting the 29
[renewable] CLEAN energy portfolio standard only if the source is connected with the 30
electric distribution [grid] SYSTEM serving Maryland. 31

HOUSE BILL 970 13

(ii) Energy from a Tier 1 renewable source under [§ 7–701(s)(11)] § 1
7–701(W)(11) of this subtitle is eligible for inclusion in mee ting the [renewable] CLEAN 2
energy portfolio standard only if the source: 3

1. is connected with the electric distribution [grid] SYSTEM 4
serving Maryland; or 5

2. processes wastewater from Maryland residents. 6

(iii) If the owner of a solar generating system in this State chooses to 7
sell solar [renewable] CLEAN energy credits from that system, the owner must first offer 8
the credits for sale to an electricity supplier or electric company that shall apply them 9
toward compliance with the [renewable] CLEAN energy portfolio standard under § 7 –703 10
of this subtitle. 11

(3) Energy from a Tier 1 renewable source under [§ 7 –701(s)(8)] § 12
7–701(W)(8) of this subtitle is eligible for inclusion in meeting the [renewable] CLEAN 13
energy portfolio standard if it is generated at a dam that existed as of January 1, 2004, 14
even if a system or facility that is capable of generating electricity did not exist on that 15
date. 16

(4) Energy from a Tier 2 renewable source under [§ 7 –701(t)] § 17
7–701(X) of this subtitle is eligible for inclusion in meeting the [renewable] CLEAN energy 18
portfolio standard if it is generated at a system or facility that existed and was operational 19
as of January 1, 2004, even if the facility or system was not capable of generating electricity 20
on that date. 21

(b) On or after January 1, 2004, an electricity supplier may: 22

(1) receive [renewable] CLEAN energy credits; and 23

(2) accumulate [renewable] CLEAN energy credits under this subtitle. 24

(c) (1) This subsection applies only to a generating facility that is placed in 25
service on or after January 1, 2004. 26

(2) (i) On or before December 31, 2005, an electricity supplier shall 27
receive 120% credit toward meeting the [renewable] CLEAN energy portfolio standard for 28
energy derived from wind. 29

(ii) After December 31, 2005, and on or before December 31, 2008, 30
an electricity supplier shall receive 110% credit toward meeting the [renewable] CLEAN 31
energy portfolio standard for energy derived from wind. 32

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(3) On or before December 31, 2008, an electricity supplier shall receive 1
110% credit toward meeting the [renewable] CLEAN energy portfolio standard for energy 2
derived from methane under [§ 7–701(r)(4)] § 7–701(V)(4) of this subtitle. 3

(d) An electricity supplier shall re ceive credit toward meeting the [renewable] 4
CLEAN energy portfolio standard for electricity derived from the biomass fraction of 5
biomass co–fired with other fuels. 6

(e) (1) In this subsection, “customer” means: 7

(i) an industrial electric customer that is not on standard offer 8
service; or 9

(ii) a renewable on–site generator. 10

(2) This subsection does not apply to offshore wind [renewable] CLEAN 11
energy credits. 12

(3) (i) A customer may independently acquire [renewable] CLEAN 13
energy credits to satisfy the standards applicable to the customer’s load, including credits 14
created by a renewable on–site generator. 15

(ii) Credits that a customer transfers to its electricity supplier to 16
meet the standard and that the electricity supplier relies on in submitting its compliance 17
report may not be resold or retransferred by the customer or by the electricity supplier. 18

(4) A renewable on–site generator may retain or transfer at its sole option 19
any credits created by the renewable on–site generator, including credits for the portion of 20
its on–site generation from a Tier 1 renewable source or a Tier 2 renewable source that 21
displaces the purchase of electricity by the renewable on–site generator from the grid. 22

(5) A customer that satisfies the standard applicable to the customer’s load 23
under this subsection may not be required to contribute to a compliance fee recovered under 24
§ 7–706 of this subtitle. 25

(6) The Commission shall adopt regulations governing the application and 26
transfer of credits under this subsection consistent with federal law. 27

(f) (1) In order to create a [renewable] CLEAN energy credit, a Tier 1 28
renewable source or Tier 2 renewable source must substantially comply with all applicable 29
environmental and administrative requirements, including air quality, water quality, solid 30
waste, and right–to–know provisions, permit conditions, and administrative orders. 31

(2) (i) This paragraph applies to Tier 1 renewable sources that 32
incinerate solid waste. 33

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(ii) At least 80% of the solid waste incinerated at a Tier 1 renewable 1
source facility shall be collected from: 2

1. for areas in Maryland, jurisdictions that achieve the 3
recycling rates required under § 9–505 of the Environment Article; and 4

2. for other states, jurisdictions for which the electricity 5
supplier demonstrates recycling substantially comparable to that required under § 9 –505 6
of the Environment Article, in accordance with regulations of the Commission. 7

(iii) An electricity supplier may report credits received under this 8
paragraph based on compliance by the facility with the percentage requirement of 9
subparagraph (ii) of this paragraph during the year immediately preceding the year in 10
which the electricity supplier receives the credit to apply to the standard. 11

(g) (1) Energy from a solar water heating system is eligible for inclusion in 12
meeting the [renewable] CLEAN energy portfolio standard. 13

(2) A person that owns and operates a solar water heating system shall 14
receive a [renewable] CLEAN energy credit equal to the amount of energy, converted from 15
BTUs to kilowatt –hours, that is generated by the system that is used by the person for 16
water heating. 17

(3) The total amount of energy generated and consumed for a 18
nonresidential or commercial solar water heating system sh all be measured by an on–site 19
meter that meets the required performance standards of the International Organization of 20
Legal Metrology. 21

(4) The total amount of energy generated and consumed by a residential 22
solar water heating system shall be: 23

(i) measured by a meter that meets the required standards of the 24
International Organization of Legal Metrology; or 25

(ii) 1. measured by the Solar Ratings and Certification 26
Corporation’s OG –300 thermal performance rating for the system or an equivalent 27
certification that the Commission approves in consultation with the Administration; and 28

2. certified to the OG–300 standard of the Solar Ratings and 29
Certification Corporation or an equivalent certification body that the Commission approves 30
in consultation with the Administration. 31

(5) A residential solar water heating system shall be installed in 32
accordance with applicable State and local plumbing codes. 33

(6) A residential solar water heating system may not produce more than 34
five solar [renewable] CLEAN energy credits in any 1 year. 35
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(h) (1) Except as provided in paragraph (6) of this subsection, energy from a 1
geothermal heating and cooling system, including energy from a legacy geothermal system 2
and energy from a post –2022 geothermal system, is eligible for inclusion in meeting the 3
[renewable] CLEAN energy portfolio standard. 4

(2) A person shall receive a [renewable] CLEAN energy credit equal to the 5
amount of energy, converted from BTUs to kilowatt –hours, that is generated by a 6
geothermal heating and c ooling system for space heating and cooling or water heating if 7
the person: 8

(i) owns and operates the system; 9

(ii) leases and operates the system; or 10

(iii) contracts with a third party who owns and operates the portion 11
of the system that consists of: 12

1. a closed loop or a series of closed loop systems in which 13
fluid is permanently confined within a pipe or tubing and does not come in contact with the 14
outside environment; or 15

2. an open loop system in which ground or surface water is 16
circulated in an environmentally safe manner directly into the facility and returned to the 17
same aquifer or surface water source. 18

(3) To determine the energy savings of a geothermal heating and cooling 19
system for a residence, the Commission shall: 20

(i) identify available energy consumption calculators developed by 21
the geothermal heating and cooling industry; 22

(ii) collect the following data provided in the [renewable] CLEAN 23
energy credit application that: 24

1. describes the name of the applican t and the address at 25
which the geothermal heating and cooling system is installed; and 26

2. provides the annual BTU energy savings attributable to 27
home heating, cooling, and water heating; and 28

(iii) in determining the annual amount of [renewable] CLEAN energy 29
credits awarded for the geothermal heating and cooling system, convert the annual BTUs 30
into annual megawatt–hours. 31

(4) To determine the energy savings of a nonresidential geothermal 32
heating and cooling system, the Commission shall: 33
HOUSE BILL 970 17

(i) use the geothermal heating and cooling engineering technical 1
system designs provided with the [renewable] CLEAN energy credit application; and 2

(ii) in determining the annual amount of [renewable] CLEAN energy 3
credits awarded for the geothermal heating an d cooling system, convert the annual BTUs 4
into annual megawatt–hours. 5

(5) A geothermal heating and cooling system shall be installed in 6
accordance with applicable State well construction and local building code standards. 7

(6) (i) A post–2022 geothermal system with a 360,000 BTU capacity is 8
eligible for inclusion in meeting the [renewable] CLEAN energy portfolio standard only if 9
the company installing the system provides for its employees: 10

1. family–sustaining wages; 11

2. employer–provided health care with affordable 12
deductibles and co–pays; 13

3. career advancement training, as provided in 14
subparagraph (ii) of this paragraph; 15

4. fair scheduling; 16

5. employer–paid workers’ compensation and unemployment 17
insurance; 18

6. a retirement plan; 19

7. paid time off; and 20

8. the right to bargain collectively for wages and benefits. 21

(ii) As part of the career advancement training the installation 22
company provides, the company shall ensure that a minimum of 10% of the emplo yees 23
working on the installation are enrolled in an apprenticeship program approved by and 24
registered with the State or the federal government. 25

(iii) Compliance with this paragraph shall be regulated and enforced 26
by the Maryland Department of Labor. 27

(i) (1) Energy from a thermal biomass system is eligible for inclusion in 28
meeting the [renewable] CLEAN energy portfolio standard. 29

(2) (i) A person that owns and operates a thermal biomass system that 30
uses anaerobic digestion is eligible to receive a [renewable] CLEAN energy credit. 31
18 HOUSE BILL 970

(ii) A person that owns and operates a thermal biomass system that 1
uses a thermochemical process is eligible to receive a [renewable] CLEAN energy credit if 2
the person demonstrates to the Maryland Department of the Enviro nment that the 3
operation of the thermal biomass system: 4

1. is not significantly contributing to local or regional air 5
quality impairments; and 6

2. will substantially decrease emissions of oxides of nitrogen 7
beyond that achieved by a direct burn co mbustion unit through the use of precombustion 8
techniques, combustion techniques, or postcombustion techniques. 9

(3) A person that is eligible to receive a [renewable] CLEAN energy credit 10
under paragraph (2) of this subsection shall receive a [renewable] CLEAN energy credit 11
equal to the amount of energy, converted from BTUs to kilowatt –hours, that is generated 12
by the thermal biomass system and used on site. 13

(4) The total amount of energy generated and consumed for a residential, 14
nonresidential, or commercial thermal biomass system shall be measured by an on –site 15
meter that meets the required performance standards established by the Commission. 16

(5) The Commission shall adopt regulations for the metering, verification, 17
and reporting of the output of thermal biomass systems. 18

(j) (1) Energy from a wastewater heating or cooling system is eligible for 19
inclusion in meeting the [renewable] CLEAN energy portfolio standard. 20

(2) A person shall receive a [renewable] CLEAN energy credit equal to the 21
amount of energy, converted from BTUs to kilowatt –hours, that is generated by a 22
wastewater heating or cooling system for space heating or cooling, industrial heating or 23
cooling, or another useful thermal purpose, if the person: 24

(i) owns and operates the system; 25

(ii) leases and operates the system; or 26

(iii) contracts with a third party who owns and operates the system. 27

(3) To determine the energy savings of a wastewater heating or cooling 28
system, the Commission shall: 29

(i) use the wastewater hea ting or cooling engineering technical 30
system designs provided with the [renewable] CLEAN energy credit application; and 31

HOUSE BILL 970 19

(ii) in determining the annual amount of [renewable] CLEAN energy 1
credits awarded for the wastewater heating or cooling system, conv ert the annual BTUs 2
into annual megawatt–hours. 3

(4) The Commission shall adopt regulations for the metering, verification, 4
and reporting of the output of wastewater heating or cooling systems. 5

7–704.1. 6

(a) (4) The Commission shall provide additional application periods 7
beginning, respectively: 8

(i) January 1, 2020, for consideration of Round 2 offshore wind 9
projects to begin creating [ORECs] OCECS not later than 2026; 10

(ii) January 1, 2021, for consideration of Round 2 offshore wind 11
projects to begin creating [ORECs] OCECS not later than 2028; and 12

(iii) January 1, 2022, for consideration of Round 2 offshore wind 13
projects to begin creating [ORECs] OCECS not later than 2030. 14

(c) An application shall include: 15

(4) a proposed [OREC] OCEC pricing schedule for the offshore wind 16
project that shall specify a price for the generation attributes, including the energy, 17
capacity, ancillary services, and environmental attributes; 18

(e) (1) The Commission shall use the following criteria to evaluate and 19
compare proposed offshore wind projects submitted during an application period: 20

(i) lowest cost impact on ratepayers of the price set under a proposed 21
[OREC] OCEC pricing schedule; 22

(xiii) estimated ability to assist in meeting the [renewable] CLEAN 23
energy portfolio standard under § 7–703 of this subtitle; and 24

(f) (1) (iii) The Commission may not approve an applicant’s proposed 25
offshore wind project unless: 26

1. for a Round 1 offshore wind project application: 27

A. the projected net rat e impact for an average residential 28
customer, based on annual consumption of 12,000 kilowatt –hours, combined with the 29
projected net rate impact of other Round 1 offshore wind projects, does not exceed $1.50 per 30
month in 2012 dollars, over the duration of the proposed [OREC] OCEC pricing schedule; 31

20 HOUSE BILL 970

B. the projected net rate impact for all nonresidential 1
customers considered as a blended average, combined with the projected net rate impact of 2
other Round 1 offshore wind projects, does not exceed 1.5% of n onresidential customers’ 3
total annual electric bills, over the duration of the proposed [OREC] OCEC pricing 4
schedule; and 5

C. the price specified in the proposed [OREC] OCEC pricing 6
schedule does not exceed $190 per megawatt–hour in 2012 dollars; and 7

2. for a Round 2 offshore wind project application: 8

A. the projected incremental net rate impact for an average 9
residential customer, based on annual consumption of 12 megawatt–hours, combined with 10
the projected incremental net rate impact of other Round 2 offshore wind projects, does not 11
exceed 88 cents per m onth in 2018 dollars, over the duration of the proposed [OREC] 12
OCEC pricing schedule; 13

B. the projected incremental net rate impact for all 14
nonresidential customers considered as a blended average, combined with the projected net 15
rate impact of other Round 2 offshore wind projects, does not exceed 0.9% of nonresidential 16
customers’ total annual electric bills during any year of the proposed [OREC] OCEC 17
pricing schedule; and 18

C. the project is subject to a community benefit agreement. 19

(2) (i) When calculating the net benefits to the State under paragraph 20
(1)(ii) of this subsection, the Commission shall contract for the services of independent 21
consultants and experts. 22

(ii) When calculating the projected net average rate impacts for 23
Round 1 offshore wind projects under paragraph (1)(iii)1A and B of this subsection and for 24
Round 2 offshore wind projects under paragraph (1)(iii)2A and B of this subsection, the 25
Commission shall apply the same net [OREC] OCEC cost per megawatt –hour to 26
residential and nonresidential customers. 27

(3) An agreement required under paragraph (1)(i)2B of this subsection 28
shall: 29

(i) guarantee against strikes, lockouts, and similar disruptions; 30

(ii) ensure that all work on the project fully conforms to all relevant 31
State and federal laws, rules, and regulations; 32

(iii) create mutually binding procedures for resolving labor disputes 33
arising during the term of the project; 34

HOUSE BILL 970 21

(iv) set forth other mechanisms for labor –management cooperation 1
on matters of mutual interest and concern, including productivity, quality of work, safety, 2
and health; and 3

(v) bind all contractors and subcontractors to the terms of the 4
agreement through the inclusion of appropriate provisions in all relevant solicitation and 5
contract documents. 6

(g) (1) An order the Commission issues approving a proposed offshore wind 7
project shall: 8

(i) specify the [OREC] OCEC pricing schedule, which may not 9
authorize an [OREC] OCEC price greater than, for a Round 1 offshore wind project, $190 10
per megawatt–hour in 2012 dollars; 11

(ii) specify the duration of the [OREC] OCEC pricing schedule, not 12
to exceed 20 years; 13

(iii) specify the number of [ORECs] OCECS the offshore wind 14
project may sell each year; 15

(iv) provide that: 16

1. a payment may not be made for an [OREC] OCEC until 17
electricity supply is generated by the offshore wind project; and 18

2. ratepayers, purchasers of [ORECs] OCECS, and the 19
State shall be held harmless for any cost overruns associated with the offshore wind project; 20
and 21

(v) require that any debt instrument issued in connection with a 22
qualified offshore wind project include language specifying that the debt instrument does 23
not establish a debt, obligation, or liability of the State. 24

(2) An order approving a proposed offshore wind project vests the owner of 25
the qualified offshore wind project with the right to receive payments for [ORECs] OCECS 26
according to the terms in the order. 27

(3) On or before March 1 each year, the Commission shall report to the 28
Governor and, in accordance with § 2–1257 of the State Government Article, to the Senate 29
Committee on Education, Energy, and the Environment and the House Economic Matters 30
Committee on: 31

(i) compliance by applicants with the minority business enterprise 32
participation goals under subsection (e)(4) of this section; and 33

22 HOUSE BILL 970

(ii) with respect to the community benefit agreement under 1
subsection (f)(1) of this section: 2

1. the availability and use of opportunities for local 3
businesses and small, minority, women–owned, and veteran–owned businesses; 4

2. the success of efforts to promote career training 5
opportunities in the manufacturing, maintenance, and construction industrie s for local 6
residents, veterans, women, and minorities; and 7

3. compliance with the minority workforce goal under 8
subsection (f)(1)(i)5 of this section. 9

(h) For Round 2 offshore wind project applications, the Commission shall approve 10
[OREC] OCEC orders representing a minimum of 400 megawatts of nameplate capacity 11
proposed during each application period unless: 12

(1) not enough Round 2 offshore wind project applications are submitted to 13
meet the net benefit test under subsection (c)(3) of this section; or 14

(2) the cumulative net ratepayer impact exceeds the maximums provided 15
in subsection (f)(1)(ii)2 of this section. 16

(j) (3) (i) On or before 6 months after the issuance of an order approving 17
an [OREC] OCEC application, the Governor’s Office of Small, Minority, and Women 18
Business Affairs, in consultation with the Office of the Attorney General and an approved 19
applicant, shall establish a clear plan for setting reasonable and appropriate minority 20
business enterprise participation goals and procedu res for each phase of the qualified 21
offshore wind project. 22

(ii) To the extent practicable, the goals and procedures specified in 23
subparagraph (i) of this paragraph shall be based on the requirements of Title 14, Subtitle 24
3 of the State Finance and Proc urement Article and the regulations implementing that 25
subtitle. 26

(iii) Every 6 months following the issuance of an order approving an 27
[OREC] OCEC application, an approved applicant shall submit a report on its progress 28
establishing and implementing mino rity business enterprise goals and procedures to the 29
Commission. 30

(k) (2) A developer seeking an exemption under paragraph (1) of this 31
subsection shall certify that the exemption is required to fulfill the developer’s obligations 32
under an approved [OREC] OCEC order. 33

(l) (1) In this subsection, “revised Round 2 offshore wind project” means a 34
Round 2 offshore wind project that has filed an application with the Commission for revised 35
HOUSE BILL 970 23

project schedules, sizes, or pricing, including [OREC] OCEC pricing, under this 1
subsection. 2

(2) This subsection applies to Round 1 offshore wind projects and Round 2 3
offshore wind projects that: 4

(i) are to be located in a wind energy area authorized by the Bureau 5
of Ocean Energy Management; and 6

(ii) possess [ORECs] OCECS, or are subject to a Commission order 7
approving an [OREC] OCEC price schedule, as of June 1, 2024. 8

(3) (i) On June 1, 2024, the Commission shall open a revised Round 2 9
offshore wind project proceeding that is limited to evaluating revised project sc hedules, 10
sizes, or pricing, including [OREC] OCEC pricing, for a previously approved Round 2 11
offshore wind project. 12

(iii) An application for a revised Round 2 offshore wind project shall 13
be limited to addressing revised project schedules, sizes, or pri cing, including [OREC] 14
OCEC pricing. 15

(4) (i) In order to maximize the amount of renewable energy generated 16
by a Round 1 offshore wind project, any Round 1 offshore wind project may seek approval 17
from the Commission to amend its previously approved Round 1 offshore wind project order 18
to: 19

1. increase the maximum amount of [ORECs] OCECS sold 20
under the previous order, consistent with the Round 1 offshore wind project ratepayer 21
protections under this section; and 22

2. modify its project schedule. 23

(ii) The Commission may approve a request for an increased amount 24
of [ORECs] OCECS sold under a previously approved Round 1 offshore wind project order 25
on a showing that: 26

1. the unit pricing of the additional [OREC] OCEC does not 27
exceed the pricing under the previously approved Round 1 offshore wind project order; and 28

2. the Round 1 offshore wind project is in compliance with 29
the ratepayer protection provisions required for Round 1 offshore wind projects, taking into 30
consideration changes in economic conditions since the original Round 1 offshore wind 31
project awards. 32

7–704.2. 33

24 HOUSE BILL 970

(a) (1) The Commission shall determine the offshore wind energy component 1
of the [renewable] CLEAN energy portfolio standard under § 7 –703(b)(12) through (25) of 2
this subtitle based on the projected annual creation of [ORECs] OCECS by qualified 3
offshore wind projects. 4

(2) The Commission shall establish the [renewable] CLEAN energy 5
portfolio standard obligation for [ORECs] OCECS on a forward –looking basis that 6
includes a surplus to accommodate reasonable forecasting error in estimating overall 7
electricity sales in the State. 8

(3) Any positive adjustment to the [renewable] CLEAN energy portfolio 9
standard shall be on a forward–looking basis and sufficiently in advance to allow an electric 10
company to reflect [OREC] OCEC costs as a nonbypassable surcharge to distribution 11
customers. 12

(4) The Commission shall adopt regulations that establish: 13

(i) the offshore wind purchase oblig ation sufficiently in advance to 14
allow an electric company to reflect [OREC] OCEC costs as a nonbypassable surcharge 15
paid by all distribution customers of the electric company; 16

(ii) a mechanism to adjust the [renewable] CLEAN energy portfolio 17
standard obligation in a given year to accommodate a shortfall of [ORECs] OCECS in one 18
or more earlier years that is the result of the variation between the quantity of [ORECs] 19
OCECS calculated from the [renewable] CLEAN energy portfolio standard obligation and 20
the quantity of [ORECs] OCECS approved in the Commission order for the same years; 21
and 22

(iii) a nonbypassable surcharge that allows an electric company to 23
recover all costs associated with the purchase of [ORECs] OCECS from all distribution 24
customers of the electric company. 25

(b) The Commission shall adopt regulations: 26

(1) establishing an escrow account under Commission supervision; and 27

(2) defining rules that facilitate and ensure the secure and transparent 28
transfer of revenues and [ORECs] OCECS among the parties. 29

(c) (1) Each electric company shall purchase from the escrow account 30
established under this section the number of [ORECs] OCECS required to satisfy the 31
offshore wind energy component of the [renewable] CLEAN energy portfolio standard under 32
§ 7–703(b)(12) through (25) of this subtitle. 33

HOUSE BILL 970 25

(2) (i) Subject to any escrow account reserve requirement the 1
Commission establishes, if there are insufficient [ORECs] OCECS available to satisfy the 2
electric companies’ [OREC] OCEC obligation, the overpayment shall be distributed to 3
electric companies to be refunded or credited to each distribution customer based on the 4
customer’s consumption of electricity supply that is subject to the [renewable] CLEAN 5
energy portfolio standard. 6

(ii) Subject to any escrow account reserve requirement the 7
Commission establishes, the calculation of an electric company’s [OREC] OCEC purchase 8
obligation shall be based on final electricity sales data as reported by the PJM 9
Interconnection as measured at the customer meter. 10

(3) For each [OREC] OCEC for which a qualified offshore wind project 11
receives payment, a qualified offshore wind project shall: 12

(i) sell all energy, capacity, and ancillary services associated with 13
the creation of [ORECs] OCECS into the markets operated by PJM Interconnection; and 14

(ii) distribute the proceeds received from the sales to PJM 15
Interconnection markets, under item (i) of this paragraph to electric companies to be 16
refunded or credited to each distribution customer based on the customer’s consumption of 17
electricity supply that is subject to the [renewable] CLEAN energy portfolio standard. 18

(4) Notwithstanding § 7 –709 of this subtitle, the Commission shall adopt 19
regulations regarding the transfer and expiration of [ORECs] OCECS created by a 20
qualified offshore wind project in excess of the [OREC] OCEC pricing schedule. 21

7–704.4. 22

(b) (1) The Department of General Services, in consultation with the Public 23
Service Commission, shall issue a competitive sealed procurement solicitation and may 24
enter into at least one contract for a po wer purchase agreement to procure offshore wind 25
energy and associated [renewable] CLEAN energy credits from one or more qualified 26
offshore wind projects. 27

(c) (1) The Department of General Services shall identify the amount of 28
energy necessary to meet the State’s energy needs. 29

(2) (i) The State shall use the energy procured under subsection (b) of 30
this section to meet the State’s energy needs and retire the associated [renewable] CLEAN 31
energy credits to meet its obligations under the [renewable] CLEAN energy portfolio 32
standard and Chapter 38 of the Acts of the General Assembly of 2022. 33

(ii) The State shall be exempted from the [renewable] CLEAN energy 34
portfolio standard requirements under § 7–703 of this subtitle if the Department of General 35
26 HOUSE BILL 970

Services procures 100% of the State’s energy needs from the power purchase agreement 1
required under subsection (b) of this section. 2

(3) The State shall offer for sale any energy or [renewable] CLEAN energy 3
credits remaining after the requirements under paragraph (2) of this subsection have been 4
met on the competitive wholesale power market operated by PJM Interconnection, through 5
bilateral sales to credit –worthy counterparties, or into [renewable] CLEAN energy credit 6
markets. 7

7–705. 8

(a) (1) Except as provided in paragraph (2) of this subsection, each electricity 9
supplier shall submit a report to the Commission each year in a form and by a date specified 10
by the Commission that: 11

(i) 1. demonstrates that the electricity supplier has complied 12
with the applicable [renewable] CLEAN energy portfolio standard under § 7 –703 of this 13
subtitle and includes the submission of the required amount of [renewable] CLEAN energy 14
credits; or 15

2. demonstrates the amount of electricity sales by which the 16
electricity s upplier failed to meet the applicable [renewable] CLEAN energy portfolio 17
standard; 18

(ii) documents the level of participation of minority business 19
enterprises and minorities in the activities that support the creation of [renewable] CLEAN 20
energy credits used to satisfy the standard under § 7 –703 of this subtitle, including 21
development, installation, and operation of generating facilities that create credits; 22

(iii) documents the amounts and types of generation associated with 23
[renewable] CLEAN energy credits purchased in compliance with § 7–707(c) of this subtitle 24
during the reporting period; and 25

(iv) documents the amount of [renewable] CLEAN energy certificates 26
that do not qualify as [renewable] CLEAN energy credits as defined in § 7 –701 of this 27
subtitle, including, for each certificate: 28

1. the energy source associated with the certificate, including 29
its location, when it was constructed, and which electric distribution system received the 30
energy; 31

2. whether the purchase of the certifica te was bundled with 32
a power purchase agreement from the energy source associated with the certificate; 33

3. whether the certificate was purchased directly from the 34
operator of the energy source or through a third party; and 35
HOUSE BILL 970 27

4. any other information required by the Commission. 1

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

(i) the Department of General Services’ sale of energy under § 3
7–704.4 of this subtitle; or 4

(ii) a community choice aggregator under § 7–510.3 of this title. 5

(b) (1) This subsection does not apply to a shortfall from the required Tier 1 6
renewable sources that is to be derived from post–2022 geothermal systems. 7

(2) If an electricity supplier fails to comply with the [renewable] CLEAN 8
energy portfolio standard for the applicable year, the electricity supplier shall pay into the 9
Maryland Strategic Energy Investment Fund established under § 9 –20B–05 of the State 10
Government Article: 11

(i) except as provided in item (ii) of this paragraph, a compliance fee 12
of: 13

1. the following amounts for each kilowatt –hour of shortfall 14
from required Tier 1 renewable sources other than the shortfall from the required Tier 1 15
renewable sources that is to be derived from solar energy: 16

A. 4 cents through 2016; 17

B. 3.75 cents in 2017 and 2018; 18

C. 3 cents in 2019 through 2023; 19

D. 2.75 cents in 2024; 20

E. 2.5 cents in 2025; 21

F. 2.475 cents in 2026; 22

G. 2.45 cents in 2027; 23

H. 2.25 cents in 2028 and 2029; and 24

I. 2.235 cents in 2030 and later; 25

2. the following amounts for each kilowatt –hour of shortfall 26
from required Tier 1 renewable sources that is to be derived from solar energy: 27

A. 45 cents in 2008; 28
28 HOUSE BILL 970

B. 40 cents in 2009 through 2014; 1

C. 35 cents in 2015 and 2016; 2

D. 19.5 cents in 2017; 3

E. 17.5 cents in 2018; 4

F. 10 cents in 2019; 5

G. 10 cents in 2020; 6

H. 8 cents in 2021; 7

I. 6 cents in 2022; 8

J. 6 cents in 2023; 9

K. 6 cents in 2024; 10

L. 5.5 cents in 2025; 11

M. 4.5 cents in 2026; 12

N. 3.5 cents in 2027; 13

O. 3.25 cents in 2028; 14

P. 2.5 cents in 2029; and 15

Q. 2.25 cents in 2030 and later; and 16

3. 1.5 cents for each kilowatt–hour of shortfall from required 17
Tier 2 renewable sources; or 18

(ii) for industrial process load: 19

1. for each kilowatt –hour of shortfall from required Tier 1 20
renewable sources, a compliance fee of: 21

A. 0.8 cents in 2006, 2007, and 2008; 22

B. 0.5 cents in 2009 and 2010; 23

C. 0.4 cents in 2011 and 2012; 24

HOUSE BILL 970 29

D. 0.3 cents in 2013 and 2014; 1

E. 0.25 cents in 2015 and 2016; and 2

F. except as provided in paragraph (3) of this subsection, 0.2 3
cents in 2017 and later; and 4

2. nothing for any shortfall from required Tier 2 renewable 5
sources. 6

(3) For industrial process load, the compliance fee for each kilowatt –hour 7
of shortfall from required Tier 1 renewable sources is nothing for the year following any 8
year during which, after final calculations, the net rate impact per megawatt –hour from 9
Round 1 offshore wind projects exceeded $1.65 in 2012 dollars. 10

[(b–1)] (C) If an electricity supplier fails to comply with the [renewable] CLEAN 11
energy portfolio standard that is required to be derived from post–2022 geothermal systems 12
for the applicable year, the electricity supplier shall pay into the Maryland Strategic 13
Energy Investment Fund established under § 9–20B–05 of the State Government Article a 14
compliance fee of the following amounts for each kilowatt –hour of shortfall from required 15
post–2022 geothermal systems: 16

(1) 10 cents in 2023 through 2025; 17

(2) 9 cents in 2026; 18

(3) 8 cents in 2027; and 19

(4) 6.5 cents in 2028 and later. 20

[(c)] (D) The Commission may allow an electricity supplier to submit the report 21
required under § 7–505(b)(4) of this title to demonstrate compliance with the [renewable] 22
CLEAN energy portfolio standard. 23

[(d)] (E) An aggregator or broker who assists an electricity customer in 24
purchasing electricity but who does not supply the electricity or take title to or ownership 25
of the electricity may require the electricity supplier who supplies the electricity to 26
demonstrate compliance with this subtitle. 27

[(e)] (F) (1) Notwithstanding the requirements of § 7–703(b) of this subtitle, 28
if the actual or projected dollar –for–dollar cost incurred or to be incurred by an electricity 29
supplier solely for the purchase of Tier 1 [renewable] CLEAN energy credits derived from 30
solar energy in any 1 year is greater than or equal to, or is anticipated to be greater than 31
or equal to, 6.0% of the electricity supplier’s total annual electricity sales revenues in 32
Maryland, the electricity supplier may request that the Commission: 33

30 HOUSE BILL 970

(i) delay by 1 year each of the scheduled percentages for solar energy 1
under § 7–703(b) of this subtitle that would apply to the electricity supplier; and 2

(ii) allow the [renewable] CLEAN energy portfolio standard for solar 3
energy for that year to continue to apply to the electricity supplier for the following year. 4

(2) In making its determination under paragraph (1) of this subsection, the 5
Commission shall consider the actual or projec ted dollar –for–dollar compliance costs of 6
other electricity suppliers. 7

(3) If an electricity supplier makes a request under paragraph (1) of this 8
subsection based on projected costs, the electricity supplier shall provide verifiable evidence 9
of the projections to the Commission at the time of the request. 10

(4) If the Commission allows a delay under paragraph (1) of this 11
subsection: 12

(i) the [renewable] CLEAN energy portfolio standard for solar 13
energy applicable to the electricity supplier under the delay continues for each subsequent 14
consecutive year that the actual or projected dollar –for–dollar costs incurred, or to be 15
incurred, by the electricity supplier solely for the purchase of solar [renewable] CLEAN 16
energy credits is greater than or equa l to, or is anticipated to be greater than or equal to, 17
6.0% of the electricity supplier’s total annual retail electricity sales revenues in Maryland; 18
and 19

(ii) the [renewable] CLEAN energy portfolio standard for solar 20
energy applicable to the electrici ty supplier under the delay is increased to the next 21
scheduled percentage increase under § 7–703(b) of this subtitle for each year in which the 22
actual or projected dollar –for–dollar costs incurred, or to be incurred, by the electricity 23
supplier solely for the purchase of solar [renewable] CLEAN energy credits is less than, or 24
is anticipated to be less than, 6.0% of the electricity supplier’s total annual retail electricity 25
sales revenues in Maryland. 26

7–706. 27

(a) (1) Except as provided in paragraph (2) of this subsection, in accordance 28
with the obligation to provide standard offer service through the bid process created under 29
§ 7–510 of this title, the Commission shall allow an electricity supplier to recover actual 30
dollar–for–dollar costs incurred, including a compliance fee under § 7 –705 of this subtitle, 31
in complying with a State–mandated [renewable] CLEAN energy portfolio standard. 32

(2) In accordance with the Phase II settlement agreement approved by the 33
Commission in Order No. 78710 in Case No. 8908 o n September 30, 2003, for any 34
full–service agreement executed before the [renewable] CLEAN energy PORTFOLIO 35
standard under this subtitle applies to an electric company, the electric company and its 36
wholesale electricity suppliers may pass through their commercially reasonable additional 37
HOUSE BILL 970 31

costs, if any, associated with complying with the standard, through the end of the year of 1
standard offer service in which the requirement took effect. 2

(b) An electricity supplier may recover a compliance fee if: 3

(1) the payment of a compliance fee is the least–cost measure to customers 4
as compared to the purchase of Tier 1 renewable sources to comply with a [renewable] 5
CLEAN energy portfolio standard; 6

(2) there are insufficient Tier 1 renewable sources available for the 7
electricity supplier to comply with a [renewable] CLEAN energy portfolio standard; or 8

(3) a wholesale electricity supplier defaults or otherwise fails to deliver 9
[renewable] CLEAN energy credits under a supply contract approved by the Commission. 10

7–707. 11

(a) In this section, “green power” means energy sources or [renewable] CLEAN 12
energy credits that are marketed as clean, green, eco–friendly, environmentally friendly or 13
responsible, carbon–free, renewable, 100% renewable, 100% wind, 100% hydro, 100% solar, 14
100% emission–free, or similar claims. 15

(c) An electricity supplier that supplies electricity to residential retail electric 16
customers may not market electricity as green power unless: 17

(1) the percentage of the electricity being offered, or the equivalent number 18
of [renewable] CLEAN energy credits associated with the electricity being marketed as 19
green power, that is eligible for inclusion in meeting the [renewable] CLEAN energy 20
portfolio standard equals or exceeds the greater of: 21

(i) 51%; or 22

(ii) 1% higher than the [renewable] CLEAN energy portfolio 23
standard for the year the electricity is provided to the customer; 24

(d) (2) (iii) During a proceeding held under subpara graph (i) of this 25
paragraph, the Commission: 26

1. shall consider: 27

A. the price of the energy purchased, including the total cost 28
of the [renewable] CLEAN energy credits; 29

B. the amount of electricity that is eligible for inclusion in 30
meeting the [renewable] CLEAN energy portfolio standard; 31

32 HOUSE BILL 970

C. the state in which the electricity was generated; and 1

D. applicable market data; and 2

2. may consider whether the purchase of [renewable] CLEAN 3
energy credits was bundled with a power purchase agreement from the energy sources 4
associated with the credit. 5

(3) (ii) Subject to paragraph (4) of this subsection, at a proceeding held 6
under this paragraph the Commission may set a price per megawatt –hour that is higher 7
than the price determined in the proceeding held under paragraph (2) of this subsection for 8
an electricity supplier if: 9

3. the electricity supplier demonstrates to the Commission’s 10
satisfaction that the electricity supplier has a significant long –term investment in 11
renewable energy that meets the [renewable] CLEAN energy portfolio standard under § 12
7–703 of this subtitle. 13

(iii) During a proceeding held under this paragraph, the Commission 14
shall consider: 15

1. whether the purchase of [renewable] CLEAN energy 16
credits was bundled with a power purchase agreement from the energy sources associated 17
with the credit; 18

2. the price of the energy purchased, including the total cost 19
of the [renewable] CLEAN energy credits or power purchase agreements; 20

3. the amount of electricity that is eligible for inclusion in 21
meeting the [renewable] CLEAN energy portfolio standard; 22

4. the state in which the electricity was generated; and 23

5. applicable market data. 24

(e) (1) On and after January 1, 2025, an electricity supplier shall purchase 25
[renewable] CLEAN energy credits for each year the electricity supplier offers green power 26
for sale to residential retail electric customers. 27

(2) A [renewable] CLEAN energy credit an electricity supplier purchases 28
under paragraph (1) of this subsection shall be retired in a PJM Environmental Information 29
Services, Inc., generation attribut e tracking system reserve subaccount accessible by the 30
Commission. 31

(f) (2) An electricity supplier that claims in the electricity supplier’s 32
marketing of electricity to residential retail electric customers that the customer will be 33
HOUSE BILL 970 33

purchasing green powe r shall include the following disclosure or a similar disclosure 1
approved by the Commission: 2

“We deliver energy through the purchase of [Renewable] CLEAN Energy Credits 3
[(RECs)] (CECS). A [REC] CEC represents the social good that accompanies 1 4
megawatt–hour of renewable electricity generation. [RECs] CECS may be sold separately 5
from renewable electricity itself. Renewable electricity and [RECs] CECS may be sold to 6
different entities. The purchase of a [REC] CEC does not indicate that renewable 7
electricity itself has been purchased by the entity that purchased the [REC] CEC.”. 8

(g) In addition to the disclosure required under subsection (f) of this section, the 9
Commission shall adopt regulations that require an electricity supplier, other than th e 10
Department of General Services when the Department of General Services sells energy 11
under § 7–704.4 of this subtitle or a community choice aggregator under § 7 –510.3 of this 12
title, that offers green power for sale to residential retail customers to inclu de in the 13
electricity supplier’s marketing materials a disclosure, written in plain language, that 14
explains: 15

(4) the percentage of electricity that would be provided by the electricity 16
supplier that is eligible for inclusion in meeting the [renewable] CLEAN energy portfolio 17
standard; and 18

7–708. 19

(a) (1) The Commission shall establish and maintain a market –based 20
renewable electricity trading system to facilitate the creation and transfer of [renewable] 21
CLEAN energy credits. 22

(2) To the extent practicable, the trading system shall be consistent with 23
and operate in conjunction with the trading system developed by PJM Interconnection, Inc., 24
if available. 25

(3) The Commission may contract with a for–profit or a nonprofit entity to 26
assist in the administration of the electricity trading system required under paragraph (1) 27
of this subsection. 28

(b) (1) The system shall include a registry of pertinent information regarding 29
all: 30

(i) available [renewable] CLEAN energy credits; and 31

(ii) [renewable] CLEAN energy credit transactions among electricity 32
suppliers in the State, including: 33

1. the creation and application of [renewable] CLEAN energy 34
credits; 35
34 HOUSE BILL 970

2. the number of [renewable] CLEAN energy credits sold or 1
transferred; and 2

3. the price paid for the sale or transfer of [renewable] 3
CLEAN energy credits. 4

(2) (i) The registry shall provide current information to electricity 5
suppliers and the public on the status of [renewable] CLEAN energy credits created, sold, 6
or transferred in the State. 7

(ii) Registry information shall be available by computer network 8
access through the Internet. 9

7–709. 10

(a) An electricity supplier may use accumulated [renewable] CLEAN energy 11
credits to meet the [renewable] CLEAN energy portfolio standard, including credits created 12
by a renewable on–site generator. 13

(b) A [renewable] CLEAN energy credit may be sold or otherwise transferred. 14

(c) (1) (i) If an electricity supplier purchases solar [renewable] CLEAN 15
energy credits directly from a renewable on–site generator with a capacity that exceeds 10 16
kilowatts to meet the solar component of the Tier 1 [renewable] CLEAN energy portfolio 17
standard, the duration of the contract term for the solar [renewable] CLEAN energy credits 18
may not be less than 15 years. 19

(ii) The minimum required term under subparagraph (i) of this 20
paragraph does not affect the ability of the parties to negotiate a price for a solar 21
[renewable] CLEAN energy credit that varies over time in any manner. 22

(2) (i) An electricity supplier that purchases solar [renewable] CLEAN 23
energy credits from a renewable on –site generator with a capacity not exceeding 10 24
kilowatts shall purchase the credits with a single initial payment representing the full 25
estimated production of the system for the life of the contract. 26

(ii) The Commission shall: 27

1. develop a method for estimating annual production from 28
the type of system described in subparagraph (i) of this paragraph and allocating the credits 29
to the electricity supplier in a manner that is consistent with the duration of the contract; 30
and 31

2. determine the rate for a payment made to a renewable 32
on–site generator under subparagraph (i) of this paragraph. 33
HOUSE BILL 970 35

(d) (1) Except as authorized under par agraph (2) of this subsection, a 1
[renewable] CLEAN energy credit shall exist for 5 years from the date created. 2

(2) A [renewable] CLEAN energy credit may be diminished or extinguished 3
before the expiration of 5 years by: 4

(i) the electricity supplier that received the credit; 5

(ii) a nonaffiliated entity of the electricity supplier: 6

1. that purchased the credit from the electricity supplier 7
receiving the credit; or 8

2. to whom the electricity supplier otherwise transferred the 9
credit; or 10

(iii) demonstrated noncompliance by the generating facility with the 11
requirements of § 7–704(f) of this subtitle. 12

(e) Notwithstanding subsection (d)(2)(iii) of this section, and only if the 13
demonstrated noncompliance does not result in environmental d egradation, an electricity 14
supplier that reasonably includes in its annual report under § 7 –705 of this subtitle a 15
[renewable] CLEAN energy credit that is extinguished for noncompliance with § 7–704(f)(1) 16
or (2) of this subtitle: 17

(1) may continue to rely on that credit for that year; but 18

(2) for later years must: 19

(i) demonstrate a return to compliance of the generating facility 20
under § 7–704(f) of this subtitle; or 21

(ii) replace the credit with a [renewable] CLEAN energy credit from 22
another source. 23

(f) The Commission by regulation shall establish requirements for 24
documentation and verification of [renewable] CLEAN energy credits by licensed electricity 25
suppliers and other generators that create and receive credits for compliance with the 26
standards for Tier 1 renewable sources and Tier 2 renewable sources. 27

7–709.1. 28

(a) (1) In this section the following words have the meanings indicated. 29

(2) “Brownfield” has the meaning stated in § 7–207 of this title. 30

36 HOUSE BILL 970

(3) “Certified [SREC”] SCEC” means a solar [renewable] CLEAN energy 1
credit generated by a certified system. 2

(4) “Certified system” means a solar energy generating system certified by 3
the Commission under the Program to generate certified [SRECs] SCECS with the 4
compliance value specified in subsection (c) of this section. 5

(5) “Program” means the Small Solar Energy Generating System Incentive 6
Program. 7

(c) (1) Under the Program, a certified system shall generate certified [SRECs] 8
SCECS. 9

(2) Except as provided in paragraph (3) of this subsection, the provisions of 10
this subtitle relating to [renewable] CLEAN energy credits shall apply to certified [SRECs] 11
SCECS. 12

(3) A certified [SREC] SCEC shall have a compliance value of 150% for 13
electricity suppliers to put toward meeting the [renewable] CLEAN energy portfolio 14
standard for energy derived from solar energy under § 7–703 of this subtitle. 15

(d) To be eligible for certification under the Prog ram, a solar energy generating 16
system shall: 17

(2) be eligible for inclusion in meeting the [renewable] CLEAN energy 18
portfolio standard; 19

(e) Except as provided in subsection (f) of this section, the Commission, at the 20
time of certifying a solar energy g enerating system as a Tier 1 renewable source, shall 21
certify the system as eligible to generate certified [SRECs] SCECS in accordance with 22
subsection (c) of this section if the applicant submits with its application for certification as 23
a Tier 1 renewable source: 24

(1) a form requesting to be certified to receive certified [SRECs] SCECS 25
with the value specified in subsection (c) of this section; 26

(2) a copy of the interconnection agreement between the applicant and the 27
applicant’s electric company indicating that the size of the system is eligible; 28

(3) if seeking certification as a system located on or over an area specified 29
under subsection (d)(5)(iii) of this section, a copy of the final approval of the local building 30
permit; 31

(4) if seeking certif ication as a system located on a brownfield, 32
documentation demonstrating that the system is located on a brownfield; 33

HOUSE BILL 970 37

(5) if seeking certification based on aggregated net metering, a copy of the 1
aggregated net energy metering rider submitted with the interconnection agreement; and 2

(6) any other information required by the Commission. 3

(i) (1) A certified system shall continue to be eligible to generate certified 4
[SRECs] SCECS for 15 years after the date of certification by the Commission, or January 5
1, 2025, whichever is later, after which the system shall be eligible to generate noncertified 6
solar [renewable] CLEAN energy credits as long as the system meets the requirements as 7
a Tier 1 renewable source under this subtitle. 8

(2) The Commission shall: 9

(i) on or before January 1, 2025, begin determining eligibility of 10
solar energy generating systems to be certified under the Program; and 11

(ii) on or before July 1, 2026, implement a revised system to review 12
and ensure compliance with the [renewable] CLEAN energy portfolio standard. 13

(3) An electricity supplier may apply the certified SRECs generated in 14
accordance with this section toward the [renewable] CLEAN energy portfolio standard 15
starting with the 2025 compliance year. 16

(4) Notwithstanding any other law, the Commission shall allow electricity 17
suppliers to demonstrate compliance with the [renewable] CLEAN energy portfolio 18
standard for the 2025 compliance year by submitting information between July 1, 2026, 19
and December 31, 2026, using the revised system developed in accordance with paragraph 20
(2)(ii) of this subsection. 21

7–710. 22

The Commission may impose an administrative fee on a [renewable] CLEAN energy 23
credit transaction, but the amount of the fee may not exceed the Commission’s actual direct 24
cost of processing the transaction. 25

SECTION 4. AND BE IT FURTHER ENACTED, That the publisher of the 26
Annotated Code of Maryland, in consul tation with and subject to the approval of the 27
Department of Legislative Services, shall correct, with no further action required by the 28
General Assembly, cross –references and terminology rendered incorrect by this Act. The 29
publisher shall adequately describe any correction that is made in an editor’s note following 30
the section affected. 31

SECTION 5. AND BE IT FURTHER ENACTED, That a presently existing obligation 32
or contract right may not be impaired in any way by this Act. 33

38 HOUSE BILL 970

SECTION 6. AND BE IT FURTHER ENACTED, That this Act shall be construed to 1
apply retroactively and shall be applied to and interpreted to affect all clean energy 2
portfolio standard compliance years that begin on or after January 1, 2026. 3

SECTION 7. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2026. 5