Public Utilities - Energy Generation and Transmission

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1404*

HOUSE BILL 1404
C5, M5 6lr2565

By: Delegates Reilly, Arentz, Beauchamp, Hutchinson, McComas, Miller,
T. Morgan, Nkongolo, Rose, Schmidt, and Tomlinson
Introduced and read first time: February 13, 2026
Assigned to: Environment and Transportation

A BILL ENTITLED

AN ACT concerning 1

Public Utilities – Energy Generation and Transmission 2

FOR the purpose of stating the authority to construct, permit, and operate in the State an 3
energy generating system that produces energy from natural gas; authorizing 4
investor–owned electric companies and electricity suppliers in the State to construct, 5
acquire, or lease, and operate, their own generating facilities and construct, acquire, 6
or lease, and operate, certain transmission facilities; authorizing certain 7
investor–owned electric compan ies to recover certain investments and costs in a 8
certain manner; establishing that certain Public Service Commission orders may not 9
go into effect until certain conditions are met; stating the General Assembly’s 10
support for the development of additional nuclear energy in the State; stating that 11
the General Assembly encourages PJM Interconnection, LLC to provide an expedited 12
interconnection process for new thermal generation resources in the State; and 13
generally relating to energy generation and transmission in the State. 14

BY renumbering 15
Article – Public Utilities 16
Section 7–510(a) through (i) 17
to be Section 7–510(b) through (j), respectively 18
Annotated Code of Maryland 19
(2025 Replacement Volume and 2025 Supplement) 20

BY adding to 21
Article – Public Utilities 22
Section 7–219.1 and 7–510(a) 23
Annotated Code of Maryland 24
(2025 Replacement Volume and 2025 Supplement) 25

BY repealing and reenacting, with amendments, 26
Article – Public Utilities 27
2 HOUSE BILL 1404

Section 7–510(b)(1), (c)(2), and (d)(2)(ii)1., (6), and (9)(ii) 1
Annotated Code of Maryland 2
(2025 Replacement Volume and 2025 Supplement) 3
(As enacted by Section 1 of this Act) 4

SECTION 1. BE IT E NACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That Section(s) 7–510(a) through (i) of Article – Public Utilities of the Annotated Code of 6
Maryland be renumbered to be Section(s) 7–510(b) through (j), respectively. 7

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 8
as follows: 9

Article – Public Utilities 10

7–219.1. 11

(A) NOTWITHSTANDING ANY O THER PROVISION OF LA W AND SUBJECT TO 12
SUBSECTION (B) OF THIS SECTION, ENERGY GENERATING SYSTEMS THAT PRODUCE 13
ENERGY FROM NATURAL GAS MAY BE CONSTRUCTED, PERMITTED, AND OPERATED 14
IN THE STATE. 15

(B) A PERSON CONSTRUCTING AN ENERGY GENERATING SYSTEM UNDER 16
THIS SECTION SHALL COMPLY WITH THE PROVISIONS OF THIS SUBTITLE RELATING 17
TO REQUIREMENTS TO OBTAIN: 18

(1) A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY; OR 19

(2) COMMISSION APPROVAL F OR THE CONSTRUCTION OF THE 20
GENERATING SYSTEM. 21

7–510. 22

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 23
INDICATED. 24

(2) “PREMIER CREDIT RATING AGENCY” MEANS A NATIONALLY 25
RECOGNIZED STATISTICAL RATING ORGANIZATION THAT IS: 26

(I) APPROVED BY THE U.S. SECURITIES AND EXCHANGE 27
COMMISSION UNDER THE CREDIT RATING AGENCY REFORM ACT OF 2006; AND 28

(II) ONE OF THE TOP TWO N ATIONALLY RECOGNIZED 29
STATISTICAL RATING ORGANIZATIONS BY MARKET SHARE. 30

(3) “RATING ASSESSMENT” MEANS A WRITTEN ANALYSIS THAT: 31
HOUSE BILL 1404 3

(I) IS PERFORMED BY A PREMIER CREDIT RATING AGENCY; AND 1

(II) ASSESSES THE LIKELY IMPACT OF A TRANSACT ION OR 2
TRANSACTIONS ON AN I NVESTOR–OWNED ELECTRIC COMPA NY’S 3
CREDITWORTHINESS. 4

(b) (1) Subject to subsection [(b)] (C) of this section, the phased 5
implementation of customer choice shall be implemented as follows: 6

(i) on July 1, 2000, one–third of the residential class in the State of 7
each electric company shall have the opportunity for customer choice; 8

(ii) on January 1, 2001, the entire industrial class and the entire 9
commercial class in the State of each electric company shall have the opportunity for 10
customer choice; 11

(iii) on July 1, 2001, two –thirds of the residential class in the State 12
of each electric company shall have the opportunity for customer choice; 13

(iv) on July 1, 2002, all customers of each electric company shall have 14
the opportunity for customer choice; and 15

(v) by July 1, 2003, under a separate schedule adopted by the 16
Commission, all customers of each electric cooperative shall have the opportunity for 17
customer choice. 18

(c) For good cause shown and if the Commission finds the action to be in the 19
public interest, the Commission may: 20

(2) accelerate any of the other implementat ion dates and phase –in 21
percentages in subsection [(a)] (B) of this section. 22

(d) (2) (ii) A customer is considered to have chosen the standard offer 23
service if the customer: 24

1. is not allowed to choose an electricity supplier under the 25
phase in of customer choice in subsection [(a)] (B) of this section; 26

(6) (I) SUBJECT TO THE REQUIR EMENTS OF SUBTITLE 2 OF THIS 27
TITLE, AN INVESTOR–OWNED ELECTRIC COMPANY OR ELECTRICITY SUPPLIER MAY: 28

1. CONSTRUCT, ACQUIRE, OR LEASE, AND OPERATE, ITS 29
OWN GENERATING FACILITIES; AND 30

4 HOUSE BILL 1404

2. CONSTRUCT, ACQUIRE, OR LEASE, AND OPERATE, ITS 1
OWN TRANSMISSION FACILITIES NECESSARY TO INTERCONNECT THE GENERATING 2
FACILITIES WITH THE ELECTRIC SYSTEM. 3

(II) [In] IF THE COMMISSION DETERMINES THAT IT IS 4
NECESSARY IN order to me et long–term, anticipated demand in the State for standard 5
offer service and other electricity supply, the Commission may require or allow, SUBJECT 6
TO APPROPRIATE COST RECOVERY, an investor–owned electric company to: 7

1. construct, acquire, or lease, and operate, its own 8
generating facilities[,]; and 9

2. CONSTRUCT, ACQUIRE, OR LEASE, AND OPERATE, ITS 10
OWN transmission facilities necessary to interconnect the generating facilities with the 11
electric [grid, subject to appropriate cost recovery] SYSTEM. 12

(III) AN INVESTOR –OWNED ELECTRIC COMPA NY THAT IS 13
REQUIRED OR ALLOWED TO CONSTRUCT , ACQUIRE, OR LEASE , AND OPERATE , A 14
GENERATING FACILITY UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH MA Y 15
RECOVER ALL PRUDENTLY INCURRED GENERATION INVESTMENTS AND COSTS: 16

1. INCLUDING: 17

A. ACQUISITION, CAPITAL, CONSTRUCTION, OPERATION, 18
MAINTENANCE, FINANCING, FUEL, AND CARRYING COSTS; AND 19

B. ANY OTHER RELATED IN VESTMENTS AND COSTS , 20
INCLUDING INVESTMENTS AND COSTS THAT BECAME STRANDED FOR ANY REASON; 21
AND 22

2. THROUGH ELECTRIC RAT ES OR , SUBJECT TO 23
COMMISSION APPROVAL, A NONBYPASSABLE SURCHARGE. 24

(IV) AN INVESTOR –OWNED ELECTRIC COMPA NY THAT IS 25
REQUIRED OR ALLOWED TO CONSTRUCT, ACQUIRE, OR LEASE, AND OPERATE, ITS 26
OWN GENERATING FACILITY UNDER SUBPARAGRAPH (II) OF THIS PARAGRAPH AND 27
IS A MEMBER OF A REGIONAL TRANSMISSION ORGANIZATION MAY: 28

1. OPERATE A GENERATION ASSET IN THE MARKETS OF 29
THAT ORGANIZATION; AND 30

HOUSE BILL 1404 5

2. APPLY ANY NET REVENU ES EARNED FROM 1
PARTICIPATION IN THE MARKETS OF THAT ORGA NIZATION AGAINST THE 2
OPERATING COSTS OF THE ASSET. 3

(V) A COMMISSION ORDER REQU IRING OR ALLOWING AN 4
INVESTOR–OWNED ELECTRIC COMPANY TO CONSTRUCT, ACQUIRE, OR LEASE, AND 5
OPERATE, ITS OWN GENERATING FACILITY WITH A NAMEPLATE CAPACITY GREATER 6
THAN 2 MEGAWATTS MAY NOT GO INTO EFFECT UNTIL: 7

1. THE INVESTOR–OWNED ELECTRIC COMPANY: 8

A. IDENTIFIES A PREMIER CREDIT RATING AGENCY; 9

B. PROVIDES A COPY OF T HE ORDER, ALONG WITH ANY 10
TERMS, CONDITIONS, AND CONTINGENCIES, TO THE AGENCY; AND 11

C. SEEKS A RATING ASSESSMENT FROM THE AGENCY; 12
AND 13

2. THE PREMIER CREDIT R ATING AGENCY PROVIDE S A 14
RATING ASSESSMENT FINDING THAT THE TERMS OF THE COMMISSION’S ORDER ARE 15
UNLIKELY TO BE NEGAT IVE FOR THE CREDITWO RTHINESS OF THE 16
INVESTOR–OWNED ELECTRIC COMPANY AND ITS AFFILIATES. 17

(9) (ii) If an electric cooperative determines that total electric rates for 18
residential customers are anticipated to increase by more than 20% in a 12 –month period 19
resulting from an increase in the cost of generation, the electric cooperative shall survey its 20
membership to determine whether to make a request to the Commission to initiate a 21
proceeding under subsection [(a)] (B) of this section. 22

SECTION 3. AND BE IT FURTHER ENACTED, That: 23

(a) The General Assembly supports the development of additional nuclear energy 24
in the State, including small modular reactors and the combination of nuclear energy and 25
energy produced from natural gas, for reliable clean energy in the State. 26

(b) The General Assembly encourages PJM Interconnection, LLC to provide an 27
expedited interconnection process for new thermal generation resources in the State. 28

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
October 1, 2026. 30