Energy-Related Programs, Surcharges, and Taxes (Maryland Energy Savings Guarantee Act)

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1640*

HOUSE BILL 1640
C5, M5, Q7 6lr3717

By: Delegates Chisholm, M. Morgan, and Szeliga
Introduced and read first time: February 25, 2026
Assigned to: Rules and Executive Nominations

A BILL ENTITLED

AN ACT concerning 1

Energy–Related Programs, Surcharges, and Taxes 2
(Maryland Energy Savings Guarantee Act) 3

FOR the purpose of repealing certain provisions related to a certain environmental 4
surcharge, the electric universal service program, energy efficiency and conservation 5
plans, the renewable energy portfolio standard, building energy efficiency standards, 6
the Regional Greenhouse Gas Initiative, and the public service company franchise 7
tax; prohibiting public service companies from including certain taxes, surcharges, 8
riders, assessments, or certain other charges in a retail electric or gas bill; 9
prohibiting the Public Service Commission from approving certain tariffs that 10
include recovery of certain costs; requiring the Governor to withdraw the State from 11
participation in the Regional Greenhouse Gas Initiative; and generally relating to 12
energy–related programs, surcharges, and taxes. 13

BY repealing 14
Article – Environment 15
Section 2–1002(g), 2–1205, 2–1601, and 2–1602 16
Annotated Code of Maryland 17
(2013 Replacement Volume and 2025 Supplement) 18

BY repealing 19
Article – Public Utilities 20
Section 7–203, 7–207(a)(6), 7–220 through 7–228, 7–501(q), 7–512.1, 7–701 through 21
7–714, 7–1001(j) and (k), and 7–1225(c) 22
Annotated Code of Maryland 23
(2025 Replacement Volume and 2025 Supplement) 24

BY repealing 25
Article – State Government 26
Section 9–2017 27
Annotated Code of Maryland 28
2 HOUSE BILL 1640

(2021 Replacement Volume and 2025 Supplement) 1

BY repealing 2
Article – Tax – General 3
Section 8–401 through 8–417 4
Annotated Code of Maryland 5
(2022 Replacement Volume and 2025 Supplement) 6

BY repealing and reenacting, with amendments, 7
Article – Corporations and Associations 8
Section 5–637 9
Annotated Code of Maryland 10
(2025 Replacement Volume) 11

BY repealing and reenacting, without amendments, 12
Article – Economic Development 13
Section 10–801(a) 14
Annotated Code of Maryland 15
(2024 Replacement Volume and 2025 Supplement) 16

BY repealing and reenacting, with amendments, 17
Article – Economic Development 18
Section 10–801(c)(8) and 10–802(a)(2) 19
Annotated Code of Maryland 20
(2024 Replacement Volume and 2025 Supplement) 21

BY adding to 22
Article – Economic Development 23
Section 10–801(o–1) 24
Annotated Code of Maryland 25
(2024 Replacement Volume and 2025 Supplement) 26

BY repealing and reenacting, without amendments, 27
Article – Environment 28
Section 2–107(a) and 2–1001(a) 29
Annotated Code of Maryland 30
(2013 Replacement Volume and 2025 Supplement) 31

BY repealing and reenacting, with amendments, 32
Article – Environment 33
Section 2–107(b) and 2–1001(d) 34
Annotated Code of Maryland 35
(2013 Replacement Volume and 2025 Supplement) 36

BY repealing and reenacting, with amendments, 37
Article – Housing and Community Development 38
Section 2–102(a) and 6–401(c) 39
HOUSE BILL 1640 3

Annotated Code of Maryland 1
(2019 Replacement Volume and 2025 Supplement) 2

BY repealing and reenacting, without amendments, 3
Article – Housing and Community Development 4
Section 6–401(a) 5
Annotated Code of Maryland 6
(2019 Replacement Volume and 2025 Supplement) 7

BY repealing and reenacting, with amendments, 8
Article – Natural Resources 9
Section 3–302(a) and (b), 5–102(a)(9), and 5–307(g)(7) 10
Annotated Code of Maryland 11
(2023 Replacement Volume and 2025 Supplement) 12

BY repealing and reenacting, without amendments, 13
Article – Natural Resources 14
Section 5–307(a) 15
Annotated Code of Maryland 16
(2023 Replacement Volume and 2025 Supplement) 17

BY repealing and reenacting, without amendments, 18
Article – Public Utilities 19
Section 7–207(a)(1), 7–501(a), and 7–1001(a) 20
Annotated Code of Maryland 21
(2025 Replacement Volume and 2025 Supplement) 22

BY repealing and reenacting, with amendments, 23
Article – Public Utilities 24
Section 7–207(b)(1), (d)(1) through (3), and (e)(1) through (3), 7–208(a), 7–306.2(b)(1) 25
and (f) (1)(iv), 7 –501(l), 7 –505(b) and (d), 7 –510.3(k)(1), 7–512(c), 7–1001(i), 26
7–1103(a)(1)(i), 7–1207(4), and 7–1220(c) 27
Annotated Code of Maryland 28
(2025 Replacement Volume and 2025 Supplement) 29

BY adding to 30
Article – Public Utilities 31
Section 7–321 32
Annotated Code of Maryland 33
(2025 Replacement Volume and 2025 Supplement) 34

BY repealing 35
Article – State Finance and Procurement 36
Section 13–217(f) 37
Annotated Code of Maryland 38
(2021 Replacement Volume and 2025 Supplement) 39

4 HOUSE BILL 1640

BY repealing and reenacting, with amendments, 1
Article – State Government 2
Section 9–2016(f), 9–20B–05, and 9–20C–03(g) 3
Annotated Code of Maryland 4
(2021 Replacement Volume and 2025 Supplement) 5

BY repealing and reenacting, with amendments, 6
Article – State Government 7
Section 9–20B–05 8
Annotated Code of Maryland 9
(2021 Replacement Volume and 2025 Supplement) 10
(As enacted by Section 5 of this Act) 11

Preamble 12

WHEREAS, Maryland ratepayers are subject to numerous State –imposed taxes, 13
fees, surcharges, riders, and mandatory assessments embedded in electric and gas utility 14
bills; and 15

WHEREAS, These charges increase energy costs beyond the actual cost of service; 16
and 17

WHEREAS, The cumulative burden of these mandates materially impacts 18
residential customers, small businesses, and commercial customers; and 19

WHEREAS, Energy policy objectives must not be financed through compulsory 20
utility bill surcharges absent direct legislative appropriations; now, therefore, 21

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That Section(s) 2–1205, 2–1601, and 2–1602 of Article – Environment of the Annotated 23
Code of Maryland be repealed. 24

SECTION 2. AND BE IT FURTHER ENACTED, That Section(s) 7–203, 7–220 25
through 7 –228, 7–512.1, and 7 –701 through 7 –714 of Article – Public Utilities of the 26
Annotated Code of Maryland be repealed. 27

SECTION 3. AND BE IT FURTHER ENACTED, That Section(s) 9–2017 of Article – 28
State Government of the Annotated Code of Maryland be repealed. 29

SECTION 4. AND BE IT FURTHER ENACTED, That Section(s) 8–401 through 30
8–417 of the Article – Tax – General of the Annotated Code of Maryland be repealed. 31

SECTION 5. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 32
as follows: 33

Article – Corporations and Associations 34

HOUSE BILL 1640 5

5–637. 1

(a) (1) Except as provided in paragraph (2) of this subsection, this subtitle 2
applies to the provision of broadband Internet service by a member–regulated cooperative. 3

(2) A member –regulated cooperative may not, for the sole purpose of 4
providing broadband Internet service, exercise the power of condemnation under § 5
5–607(a)(16) of this subtitle. 6

(b) A member–regulated cooperative is subject to the following provisions of the 7
Public Utilities Article: 8

(1) § 5–103; 9

(2) § 5–201; 10

(3) § 5–202; 11

(4) § 5–303; 12

(5) § 5–304; 13

(6) § 5–306; 14

(7) § 7–103; 15

(8) § 7–104; 16

(9) [§ 7–203; 17

(10)] § 7–207; 18

[(11) Title 7, Subtitle 2, Part II; 19

(12)] (10) § 7–302; 20

[(13)] (11) Title 7, Subtitle 5, Part I and Part II; 21

[(14) Title 7, Subtitle 7;] and 22

[(15)] (12) § 13–101. 23

Article – Economic Development 24

10–801. 25

6 HOUSE BILL 1640

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

(c) “Advanced clean energy” includes: 2

(8) other qualifying biomass [as defined in § 7 –701 of the Public Utilities 3
Article]; 4

(O–1) “QUALIFYING BIOMASS ” MEANS A NONHAZARDOUS, ORGANIC 5
MATERIAL THAT IS AVA ILABLE ON A RENEWABL E OR RECURRING BASIS , AND IS 6
WASTE MATERIAL THAT IS SEGREGATED FROM INORGANIC WASTE MATERIAL AND IS 7
DERIVED FROM SOURCES, INCLUDING: 8

(1) EXCEPT FOR OLD GROWT H TIMBER , ANY OF THE FOLLOWING 9
FOREST–RELATED RESOURCES: 10

(I) MILL RESIDUE, EXCEPT SAWDUST AND WOOD SHAVINGS; 11

(II) PRECOMMERCIAL SOFT WOOD THINNING; 12

(III) SLASH; 13

(IV) BRUSH; OR 14

(V) YARD WASTE; 15

(2) A PALLET, CRATE, OR DUNNAGE; 16

(3) AGRICULTURAL AND SILVICULTURAL SOURCES, INCLUDING TREE 17
CROPS, VINEYARD MATERIALS , GRAIN, LEGUMES, SUGAR, AND OTHER CROP 18
BY–PRODUCTS OR RESIDUE; OR 19

(4) GAS PRODUCED FROM TH E ANAEROBIC DECOMPOS ITION OF 20
ANIMAL WASTE OR POULTRY WASTE. 21

Article – Environment 22

2–1001. 23

(a) In this subtitle the following words have the meanings indicated. 24

(d) “PJM Region” [has the meaning stated under § 7 –701 of the Public Utilities 25
Article] MEANS THE CONTROL AREA ADM INISTERED BY THE PJM 26
INTERCONNECTION, INC. AS THE AREA MAY CHANGE FROM TIME TO TIME. 27

HOUSE BILL 1640 7

Article – Housing and Community Development 1

2–102. 2

(a) The Department shall: 3

(1) encourage and assist political subdivisions and public and private 4
community organizations to develop mutual and cooperative solutions to their common 5
problems; 6

(2) serve as a clearinghouse for information and materials that may be 7
pertinent to sound community assistance, including information on available federal, State, 8
and private financial assistance and technical assistance; 9

(3) implement model or demonstration programs and projects or otherwise 10
provide a program of practical research in community assistance; 11

(4) provide grants and loans for energy co nservation and the use of solar 12
energy in commercial and residential buildings; 13

(5) provide advisory, consultative, training, and educational services, and 14
technical assistance to any political subdivision, local public agency, or nonprofit 15
organization for community assistance purposes; 16

(6) contract for and accept a gift, grant, contribution, or loan of money, 17
property, or other aid for community assistance from a governmental unit, the federal 18
government, or another source and comply with the terms and conditions of that aid; 19

(7) attach terms and conditions to financial assistance as the Secretary 20
determines; 21

(8) participate with political subdivisions, regional governments, 22
organizations, and the federal government in developing, financing, an d implementing a 23
program to build the management capabilities of municipal corporations by supplying 24
needed managerial expertise through circuit riding managers; AND 25

(9) administer federal programs relating to community assistance[; and 26

(10) develop and implement a weatherization program in accordance with 27
Title 4 of this article and administer the low –income weatherization component of the 28
electric universal service program in accordance with § 7 –512.1 of the Public Utilities 29
Article]. 30

6–401. 31

(a) In this subtitle the following words have the meanings indicated. 32

8 HOUSE BILL 1640

(c) “Business entity” means a person that conducts a trade or business in the 1
State and is subject to: 2

(1) the State income tax on individuals or corporations; OR 3

(2) [the public service company franchise tax; or 4

(3)] the insurance premiums tax. 5

Article – Natural Resources 6

3–302. 7

(a) [(1)] There is an Environmental Trust Fund. 8

[(2) (i) For the purpose of this subtitle, there is established as an added 9
cost of electricity distributed to retail electric customers within the State, an environmental 10
surcharge per kilowatt hour of electric energy distributed in the State to be paid by any 11
electric company as defined in § 1–101 of the Public Utilities Article. 12

(ii) The Public Service Commission shall impose the surcharge per 13
kilowatt hour of electric energy distributed to retail electric customers within the State and 14
shall authorize the electric companies to add the full amount of the surcharge to retail 15
electric customers’ bills. 16

(iii) To the extent that the surcharge is not collected from retail 17
electric customers, the surcharge shall be deemed a cost of distribution and shall be allowed 18
and computed as such, together with other allowable expenses, for rate–making purposes. 19

(iv) Revenues from the surcharge shall be collected by the 20
Comptroller and placed in the Fund.] 21

(b) [(1) (i)] The Secretary, in consultation with the Director of the Maryland 22
Energy Administration, annually shall coordinate the preparation of a budget required to 23
carry out the provisions of this subtitle. 24

[(ii) On approval of the budget by the General Assembly, the Public 25
Service Commission shall establish the amount of the surcharge per kilowatt hour for the 26
fiscal year beginning July 1, 1972, and for each subsequent fiscal year. 27

(2) Notwithstanding any other provisions of this subtitle, the amount of the 28
surcharge for each account for each retail electric customer may not exceed the lesser of 29
0.15 mill per kilowatt hour or $1,000 per month and the surcharge may not continue beyond 30
fiscal year 2030. 31

(3) (i) The Comptroller shall maintain the method of collection of the 32
HOUSE BILL 1640 9

surcharge from the companies and the collections shall accrue to the Fund. 1

(ii) The Department shall credit against the amount required to be 2
paid into the Environmental Trust Fund by each electric company an amount equal to 3
0.75% of the total surcharge attributed to each company on the basis of the electricity 4
distributed within Maryland.] 5

5–102. 6

(a) The General Assembly finds that: 7

(9) Forests are a renewable resource that help the State meet its renewable 8
energy goals that are consistent with the State’s: 9

(i) Green power goal for State facilities; 10

(ii) [Renewable Energy Portfolio Standard; 11

(iii)] Healthy Air Act; and 12

[(iv)] (III) Maryland Clean Energy Incentive Act of 2006; and 13

Article – Public Utilities 14

7–207. 15

(a) (1) In this section the following words have the meanings indicated. 16

[(6) “Qualified generator lead line” means an overhead transmission line 17
that is designed to carry a voltage in excess of 69,000 volts and would allow an out–of–state 18
Tier 1 or Tier 2 renewable source to interconnect with a portion of the electric system in 19
Maryland that is owned by an electric company.] 20

(b) (1) (i) Except as provided in subparagraph (ii) of this paragraph, unless 21
a certificate of public convenience and necessity for the construction is first obtained from 22
the Commission, a person may not begin construction in the State of: 23

1. a generating station; OR 24

2. [a qualified generator lead line; or 25

3.] an energy storage device that is part of a proposal 26
approved by the Commission under § 7–1206 of this title. 27

(ii) A person is not required to obtain a certificate of public 28
convenience and necessity under this section if the person obtains: 29
10 HOUSE BILL 1640

1. Commission approval for construction under § 7 –207.1 of 1
this subtitle; or 2

2. a distributed generation certificate of public convenience 3
and necessity under § 7–207.4 of this subtitle. 4

[(iii) Notwithstanding subparagraph (i) of this paragraph, a person 5
may not apply to obtain a certificate of public convenience and necessity for construction of 6
a qualified generator lead line unless: 7

1. at least 90 days before the filing of an application for a 8
certificate of public convenience and necessity, the person had in good faith offered the 9
electric company that owns that portion of the electric grid in Maryland to which the 10
qualified generator lead line would interconnect a full and fair opportunity for the electric 11
company to construct the qualified generator lead line; and 12

2. at any time at least 10 days before the filing of an 13
application for a certificate of public convenience and necessity, the electric company: 14

A. did not accept from the person a proposal or a negotiated 15
version of the proposal under which the electric company would construct the qualified 16
generator lead line; or 17

B. stated in writing that the electric company did not intend 18
to construct the qualified generator lead line. 19

(iv)] (III) Notwithstanding any other provision of this section, a 20
certificate of public convenience and necessity for the construction of a generating station 21
that is part of a proposal approved by the Commission under § 7–1206 of this title shall be 22
issued in accordance with § 7–207.4 of this subtitle. 23

[(v)] (IV) When a person applies for a certificate of public 24
convenience and necessity for the construction of a generating station under this section, 25
the application sh all state whether the proposed generating station or the proposed 26
modification is part of a proposal approved by the Commission under § 7–1206 of this title. 27

[(vi)] (V) 1. The Commission may prioritize the review of an 28
application for a certificate of public convenience and necessity under § 7 –207.4 of this 29
subtitle over the review of an application for a certificate of public convenience and 30
necessity under this section. 31

2. The Commission may extend the time for the review of an 32
application for a certificate of public convenience and necessity under this section if, in 33
accordance with subsubparagraph 1 of this subparagraph, the Commission has prioritized 34
the review of an application for a certificate of public convenience and necessity under § 35
7–207.4 of this subtitle over the review of the application for a certificate of public 36
HOUSE BILL 1640 11

convenience and necessity under this section. 1

(d) (1) (i) The Commission shall provide an opportunity for public 2
comment and hold a public hearing on the application for a certificate of public convenience 3
and necessity in each county and municipal corporation in which any portion of the 4
construction of a generating station[,] OR an overhead transmission line designed to carry 5
a voltage in excess of 69,000 volts [, or a qualified generator lead line ] is proposed to be 6
located. 7

(ii) The Commission may hold the public hearing virtually rather 8
than in person if the Commission provides a comparable opportunity for public comment 9
and participation in the hearing. 10

(2) The Commission shall hold the public hearing jointly with the 11
governing body of the county or municipal corporation in which any portion of the 12
construction of the generating station [,] OR overhead transmission line [, or qualified 13
generator lead line ] is pr oposed to be located, unless the governing body declines to 14
participate in the hearing. 15

(3) (i) Once in each of the 4 successive weeks immediately before the 16
hearing date, the Commission shall provide weekly notice of the public hearing and an 17
opportunity for public comment: 18

1. by advertisement in a newspaper of general circulation in 19
the county or municipal corporation affected by the application; 20

2. on two types of social media; and 21

3. on the Commission’s website. 22

(ii) Before a publi c hearing, the Commission shall coordinate with 23
the governing body of the county or municipal corporation in which any portion of the 24
construction of the generating station [,] OR overhead transmission line [, or qualified 25
generator lead line] is proposed to be located to identify additional options for providing, in 26
an efficient and cost–effective manner, notice of the public hearing through other types of 27
media that are familiar to the residents of the county or municipal corporation. 28

(e) The Commission s hall take final action on an application for a certificate of 29
public convenience and necessity only after due consideration of: 30

(1) the recommendation of the governing body of each county or municipal 31
corporation in which any portion of the construction of the generating station [,] OR 32
overhead transmission line[, or qualified generator lead line] is proposed to be located; 33

(2) the effect of the generating [station,] STATION OR overhead 34
transmission line[, or qualified generator lead line] on: 35
12 HOUSE BILL 1640

(i) the stability and reliability of the electric system; 1

(ii) economics; 2

(iii) esthetics; 3

(iv) historic sites; 4

(v) aviation safety as determined by the Maryland Aviation 5
Administration and the administrator of the Federal Aviation Administration; 6

(vi) when applicable, air quality and water pollution; and 7

(vii) the availability of means for the required timely disposal of 8
wastes produced by any generating station; 9

(3) the effect of climate change on the generating [station,] STATION OR 10
overhead transmission line[, or qualified generator lead line ] based on the best available 11
scientific information recognized by the Intergovernmental Panel on Climate Change; 12

7–208. 13

(a) (1) In this section the following words have the meanings indicated. 14

(2) “Construction” has the meaning stated in § 7–207 of this subtitle. 15

(3) “Generating station” does not include: 16

(i) a generating unit or facility that: 17

1. is used for the production of electricity for the purpose of: 18

A. onsite emergency backup at a facility when service from 19
the electric company is interrupted due to electric distribution or transmission system 20
failure or when there is equipment failure at a site where critical infrastructure is located; 21
and 22

B. test and maintenance operations necessary to ensure 23
functionality of the generating unit or facility in the event of an interruption of service from 24
the electric company due to electric distribution or transmission system failure or when 25
there is equipment failure at a site where critical infrastructure is located; 26

2. is installed with equipment that prevents the flow of 27
electricity to the electric grid; 28

3. is subject to a permit to construct issued by the 29
HOUSE BILL 1640 13

Department of the Environment; and 1

4. is installed at a facility that is part of critical 2
infrastructure if the facility complies with all applicable regulations regarding noise level 3
and testing hours; or 4

(ii) a combination of two or more generating units or facilities that 5
satisfy item (i) of this paragraph. 6

(4) [“Qualified offshore wind project” has the meaning stated in § 7–701 of 7
this title. 8

(5)] “Qualified submerged renewable energy line” means[: 9

(i) a line carrying electricity supply and connecting a qualified 10
offshore wind project to the transmission system; and 11

(ii)] a line in which the portions of the line crossing any submerged 12
lands or any part of a beach erosion control district are buried or submerged. 13

7–306.2. 14

(b) The General Assembly finds that: 15

(1) community solar energy generating systems: 16

(i) provide residents and businesses, including those that lease 17
property, increased access to local solar electricity while encouraging private investment in 18
solar resources; AND 19

(ii) [enhance continued diversification of the State’s energy resource 20
mix to achieve the State’s renewable energy portfolio standard and Greenhouse Gas 21
Emissions Reduction Act goals; and 22

(iii)] provide electric companies and ratepayers the opportunity to 23
realize the many benefits associated with distributed energy; and 24

(f) (1) Subject to subsection (h) of this section, to implement the Program, the 25
Commission shall, on or before January 1, 2025, adopt revisions to the regulations adopted 26
under subsection (e) of this section for the pilot program, including revisions that: 27

(iv) allow a subscriber organization or subscription coordinator to 28
verify the income of a prospective subscriber for eligibility as an LMI subscriber under the 29
Program by using one of the following methods: 30

1. self–attestation by the prospective subscriber that does 31
14 HOUSE BILL 1640

not need to be under oath or penalty of perjury; 1

2. requiring the prospective subscriber to provide evidence of 2
eligibility for or enrollment in at least one of the following government assistance programs: 3

A. the Maryland Energy Assistance Program; 4

B. the Supplemental Nutrition Assistance Program; 5

C. Medicaid; 6

D. Head Start; 7

E. free and reduced price school meals; 8

F. the federal Low Income Home Energy Assistance 9
Program; 10

G. [EmPOWER Maryland low – or moderate –income 11
incentives; 12

H.] telephone lifeline service; 13

[I.] H. the Fuel Fund of Maryland; or 14

[J.] I. any additional federal, State, or local assistance 15
program that the Commission determines will further the purposes of the Program; 16

3. pay stubs; 17

4. income tax documents; 18

5. proof of residence in an affordable housing facility; 19

6. proof of residence within a census tract that is: 20

A. an overburdened community; and 21

B. an underserved community; 22

7. any verification method that was available under the pilot 23
program; or 24

8. any additional methods approved by the Commission to 25
verify income; 26

7–321. 27
HOUSE BILL 1640 15

(A) A PUBLIC SERVICE COMPA NY MAY NOT INCLUDE I N ANY RETAIL 1
ELECTRIC OR GAS BILL ANY STATE–MANDATED TAX , SURCHARGE, RIDER, 2
ASSESSMENT, OR OTHER CHARGE THAT IS NOT DIRECTLY ATTR IBUTABLE TO THE 3
UTILITY’S COST OF PROVIDING DISTRIBUTION, TRANSMISSION, ENERGY 4
GENERATION PROCUREMENT, OR ELECTRIC OR GAS SUPPLY SERVICE. 5

(B) THE COMMISSION MAY NOT AP PROVE ANY TARIFF THA T INCLUDES 6
RECOVERY OF A STATE–IMPOSED POLICY MANDATE. 7

(C) ANY STATE PROGRAM RELATED TO ENERGY SHALL BE F INANCED 8
SOLELY THROUGH DIREC T LEGISLATIVE APPROP RIATION FROM THE GENERAL 9
FUND OF THE STATE. 10

7–501. 11

(a) In this subtitle the following words have the meanings indicated. 12

(l) (1) “Public purpose program” means a program implemented with the 13
intention of furthering a public purpose. 14

(2) “Public purpose program” includes: 15

(i) [a universal service program; 16

(ii)] a program encouraging renewable energy resources; 17

[(iii)] (II) a demand side management or other energy efficiency or 18
conservation program; and 19

[(iv)] (III) a consumer education program. 20

[(q) (1) “Universal service prog ram” means a program that helps low –income 21
customers maintain electric service. 22

(2) “Universal service program” includes customer bill assistance and 23
payment programs, termination of service protection, and policies and services that help 24
low–income cus tomers to reduce or manage energy consumption in a cost –effective 25
manner.] 26

7–505. 27

(b) (1) The Commission shall issue the orders or adopt the regulations 28
required under this subsection before the implementation of customer choice. 29

16 HOUSE BILL 1640

[(2) The Commission shall order a universal service program, to be made 1
available on a statewide basis, to benefit low –income customers, in accordance with § 2
7–512.1 of this subtitle.] 3

[(3)] (2) The Commission shall order an electric company to adopt policies 4
and practices reasonably designed to prevent: 5

(i) discrimination against a person, locality, or particular class of 6
service or giving undue or unreasonable preference in favor of the electric company’s own 7
electricity supply, other services, divisions, or affiliates, if any; and 8

(ii) any other forms of self –dealing or practices that could result in 9
noncompetitive electricity prices to customers. 10

[(4)] (3) (i) The Commission shall, by regulation or order, require each 11
electric company and electricity supplier to provide adequate and accurate information to 12
each customer on the available electric services of the electric company or electricity 13
supplier, including disclosure, every 6 months, of a uniform common set of information 14
about: 15

1. the fuel mix of the electricity purchased by customers, 16
including categories of electricity from coal, natural gas, nuclear, oil, hydroelectric, solar, 17
biomass, wind, and other resources, or disclosure of a regional fuel mix average; and 18

2. the emission s, on a pound per megawatt –hour basis, of 19
pollutants identified by the Commission, or disclosure of a regional fuel mix average. 20

(ii) The Commission may require an electric company or an 21
electricity supplier to provide documentation supporting the disc losures required under 22
subparagraph (i) of this paragraph. 23

[(5)] (4) (i) The Commission shall, by regulation or order, require the 24
unbundling of electric company rates, charges, and services into standardized categories 25
determined by the Commission. 26

(ii) The Commission shall, by regulation or order, require that 27
customers’ bills for electricity service indicate charges for: 28

1. distribution and transmission; 29

2. transition charge or credit; 30

3. [universal service program charges; 31

4.] customer charges; 32

HOUSE BILL 1640 17

[5.] 4. taxes; and 1

[6.] 5. other charges identified by the Commission. 2

[(6)] (5) The Commission shall issue orders or regulations to prevent an 3
electric company and an electricity supplier from disclosing a retail electric c ustomer’s 4
billing, payment, and credit information without the retail electric customer’s consent, 5
except as allowed by the Commission for bill collection or credit rating reporting purposes. 6

[(7)] (6) An electricity supplier may not engage in marketing, advertising, 7
or trade practices that are unfair, false, misleading, or deceptive. 8

[(8)] (7) The Commission shall determine the terms, conditions, and rates 9
of standard offer service in accordance with: 10

(i) Title 4 of this article; or 11

(ii) as applicable, § 7–510(c)(4) of this subtitle. 12

[(9)] (8) In connection with § 7–513 of this subtitle, the Commission may 13
not require an electric company to divest itself of a generation asset or prohibit an electric 14
company from divesting itself voluntarily of a generation asset. 15

[(10)] (9) (i) On or before July 1, 2000, the Commission shall issue 16
orders or adopt regulations reasonably designed to ensure the creation of competitive 17
electricity supply and electricity supply services markets, with appropria te customer 18
safeguards. 19

(ii) On or before July 1, 2000, the Commission shall require: 20

1. an appropriate code of conduct between the electric 21
company and an affiliate providing electricity supply and electricity supply services in the 22
State; 23

2. access by electricity suppliers and customers to the electric 24
company’s transmission and distribution system on a nondiscriminatory basis; 25

3. appropriate complaint and enforcement procedures; and 26

4. any other safeguards deemed necessary by the 27
Commission to ensure the creation and maintenance of a competitive electricity supply and 28
electricity supply services market. 29

(iii) On or before July 1, 2000, the Commission shall require, among 30
other factors, functional, operational, structural, or le gal separation between the electric 31
company’s regulated businesses and its nonregulated businesses or nonregulated affiliates. 32
18 HOUSE BILL 1640

[(11)] (10) Nothing in this title may be construed as preventing the 1
application of State and federal consumer protection and antitrust laws to electric 2
companies and their affiliates, and to electricity suppliers. 3

[(12)] (11) The Commission, in consultation with the Department of the 4
Environment, shall adopt appropriate measures to maintain environmental standards, 5
adapt existing programs, and develop new programs as appropriate to ensure compliance 6
with federal and State environmental protection standards. 7

[(13)] (12) (i) An electric company shall comply with all requirements of 8
the Commission in conducting regulated operations in compliance with this division. 9

(ii) The Commission shall require each electric company to adopt a 10
code of conduct to be approved by the Commission by a date to be determined by the 11
Commission to prevent regulated service customers from su bsidizing the services of 12
unregulated businesses or affiliates of the electric company. 13

(d) (1) The Commission shall cap, for 4 years after initial implementation of 14
customer choice in the electric company’s distribution territory, the total of the rates of an 15
electric company charged to a retail electric customer at the actual level of the rates in 16
effect or authorized by the Commission on the date immediately preceding the initial 17
implementation of customer choice in the electric company’s distribution territory. 18

(2) (i) Except as provided in subparagraph (ii) of this paragraph, the 19
cap required under paragraph (1) of this subsection does not apply to the recovery of costs 20
added after January 1, 2000, in accordance with § 7–512(c) of this subtitle. 21

(ii) The cap required under paragraph (1) of this subsection applies 22
to the recovery of: 23

1. any transition costs under § 7–513 of this subtitle; AND 24

2. any costs included in rates on January 1, 2000, in 25
accordance with § 7–512(c) of this subtitle[; and 26

3. costs for the universal service program established under 27
§ 7–512.1 of this subtitle]. 28

(3) As part of a settlement, the Commission may approve a cap for a 29
different time period or an alternative price protection plan that the Commission 30
determines is equally protective of ratepayers. 31

(4) (i) 1. Subject to the provisions of paragraph (5) of this 32
subsection, the Commission shall reduce residential rates for each investor–owned electric 33
company by an amount between 3% and 7.5% of base rates, as measured on June 30, 1999. 34
HOUSE BILL 1640 19

2. The reduction required under subsubparagraph 1 of this 1
subparagraph shall begin on the initial implementation date and remain in effect for 4 2
years. 3

3. The Commission shall determine the allocation of the rate 4
reduction among the generation, transmission, and distribution residential rate 5
components. 6

(ii) In achieving the rate reduction required under subparagraph (i) 7
of this paragraph, the Commission shall consider: 8

1. the expiration of any surcharge; 9

2. changes in the electric company’s tax liability; 10

3. cost of service determinations ordered by the Commission; 11

4. net transition costs or benefits; 12

5. the effect on the competitive electricity supply market; 13

6. whether the ra te reduction and rate cap will unduly 14
impair the electric company’s financial condition; AND 15

7. [the costs associated with the universal service program; 16
and 17

8.] the interests of the public, including shareholders of the 18
electric company. 19

(iii) The Commission may, within the parameters provided in 20
subparagraph (i) of this paragraph, increase or decrease the actual rate reduction required. 21

(iv) The Commission may allow the recovery of any extraordinary 22
costs based on the circumstances of an individual electric company if the Commission 23
determines that the action is necessary and in the public interest. 24

(v) In determining the rate reduction required under subparagraph 25
(i) of this paragraph, the Commission may not increase rates for nonresidential customers. 26

(5) The requirements of paragraph (4) of this subsection do not apply to an 27
electric company if the Commission approves or has in effect a settlement that the 28
Commission determines is equally protective of ratepayers. 29

7–510.3. 30

20 HOUSE BILL 1640

(k) (1) [Except for the purposes of meeting the requirements of the renewable 1
energy portfolio standard under Subtitle 7 of this title, a ] A community choice aggregator 2
may not be considered to be an electricity supplier under § 7–507(a) of this subtitle. 3

7–512. 4

(c) (1) An electric company shall be provided a fair opportunity to recover fully 5
all costs that have been or will be incurred by the electric company under public purpose 6
programs established by law or ordered by the Commission. 7

(2) [(i)] Except as provided in paragraph (3) of this subsection, the costs 8
subject to this subsection shall be funded by a surcharge or other cost recovery mechanism 9
collected on a statewide basis that: 10

[1.] (I) fully recovers from customers the costs of the plans 11
and programs; and 12

[2.] (II) subject to subparagraph (ii) of this paragraph, with 13
respect to any of these costs not included in rates on January 1, 2000, is not subject to any 14
otherwise applicable cap. 15

[(ii) The recovery by an electric company of co sts for a universal 16
service program is subject to any applicable cap regardless of when the costs are included 17
in rates.] 18

(3) During the fiscal year ending June 30, 2000, an electric company may 19
not, under paragraph (2) of this subsection, recover costs of a consumer education program 20
established by law, regulation, or order. 21

7–1001. 22

(a) In this subtitle the following words have the meanings indicated. 23

(i) (1) “Renewable on –site generating system” means an energy system 24
located on a customer’s premises that: 25

(i) generates or stores electricity from a [Tier 1 renewable source or 26
a Tier 2 renewable] source that does not release greenhouse gases; 27

(ii) is capable of providing electricity to: 28

1. a home, business, or other structure serviced by an electric 29
company; and 30

2. the electric distribution system; 31

HOUSE BILL 1640 21

(iii) is paired with an energy storage device that is configured to 1
charge from: 2

1. the renewable source; and 3

2. the electric distribution system unless, for the purpos e of 4
eligibility for net energy metering, the device is required to be charged only from the 5
renewable source; and 6

(iv) is interconnected and operates in parallel with an electric 7
company’s transmission and distribution facilities. 8

(2) “Renewable on –site generating system” may include bidirectional 9
electric vehicle service equipment located on a customer’s premises. 10

[(j) “Tier 1 renewable source” has the meaning stated in § 7–701 of this title. 11

(k) “Tier 2 renewable source” has the meaning stated in § 7–701 of this title.] 12

7–1103. 13

(a) (1) (i) The Administration shall coordinate funding sources, including 14
all available federal funding, philanthropic funding, [funding available under the 15
EmPOWER Maryland Program,] and Strategic Energy Investment Fund funding allocated 16
to energy efficiency, to assist an electric company, a gas company, or a water company in 17
covering the costs for all behind –the–meter projects, including full electrification, 18
associated with a therma l energy network system so that any affected residential 19
customers are not required to pay for connection to the thermal energy network system or 20
any appliance replacements required for electrification. 21

7–1207. 22

The Commission shall include specifications in a solicitation issued under § 7 –1206 23
of this subtitle that require each proposal for a dispatchable energy generation project and 24
large capacity energy resource project to: 25

(4) if applicable, include a description of: 26

(i) [the type and amount of co–located energy generation from Tier 27
1 renewable sources, as defined in § 7–701 of this title, that would be used with the project; 28

(ii)] the amount of co–located energy storage that would be used with 29
the project; 30

[(iii)] (II) the use of carbo n capture or sequestration technology to 31
mitigate greenhouse gas emissions from the project; and 32
22 HOUSE BILL 1640

[(iv)] (III) the amount of hydrogen or zero –emissions biofuels that 1
the project will mix with natural gas for energy generation; and 2

7–1220. 3

(c) [(1)] Each electric company shall procure from the escrow account 4
established by regulation under this section a quantity of zero –emission credits equal to 5
the electric company’s respective percentage of retail electric sales each year. 6

[(2) Subject to any esc row account reserve requirement the Commission 7
establishes, if there are insufficient zero –emission credits available to satisfy the electric 8
companies’ zero–emission credit purchase obligations, the overpayment shall be distributed 9
to electric companies to be refunded or credited to each distribution customer based on the 10
customer’s consumption of electricity supply that is subject to the renewable energy 11
portfolio standard.] 12

7–1225. 13

[(c) Front–of–the–meter transmission energy storage devices paired with Tier 1 14
or Tier 2 renewable sources, as defined under § 7 –701 of this title, may be included in a 15
proposal in response to a procurement solicitation under § 7–1224 of this subtitle.] 16

Article – State Finance and Procurement 17

13–217. 18

[(f) (1) On the recommendation of the Secretary of General Services, the Board 19
may waive the requirement to include an automatic termination clause under subsection 20
(e) of this section for a multi –year contract to procure energy generated from a Tier 1 21
renewable source or a Tier 2 renewable source, as defined in § 7–701 of the Public Utilities 22
Article. 23

(2) In determining whether or not to grant a waiver under paragraph (1) of 24
this subsection, the Board shall consider the effect of imposing the termination clause 25
requirement under subsection (e) of this section on the ability of the energy supplier to 26
obtain financing for the renewable energy generation project that produces the energy that 27
the State is contracting to procure.] 28

Article – State Government 29

9–2016. 30

(f) A grant awarded under subsection (e) of this section shall be funded from [fees 31
collected under § 7–705(b)(2)(i)2 of the Public Utilities Article and allocated in accordance 32
with § 9–20B–05(g–1) of this title] THE MARYLAND STRATEGIC ENERGY INVESTMENT 33
HOUSE BILL 1640 23

FUND ESTABLISHED UNDER § 9–20B–05 OF THIS TITLE. 1

9–20B–05. 2

(a) There is a Maryland Strategic Energy Investment Fund. 3

(b) The purpose of the Fund is to implement the Strategic Energy Investment 4
Program. 5

(c) The Administration shall administer the Fund. 6

(d) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 7
the State Finance and Procurement Article. 8

(2) The Treasurer shall hold the Fund separately and the Comptroller shall 9
account for the Fund. 10

(e) The Fund consists of: 11

(1) all of the proceeds from the sale of allowances under § 2–1002(g) of the 12
Environment Article; 13

(2) money appropriated in the State budget to the Program; 14

(3) repayments and prepayments of principal and interest on loans made 15
from the Fund; 16

(4) [compliance fees paid under § 7–705 of the Public Utilities Article; 17

(5)] money received from any public or private source for the benefit of the 18
Fund; 19

[(6)] (5) money transferred from the Public Service Commission under § 20
7–207.2(d)(3) of the Public Utilities Article; and 21

[(7)] (6) money distributed under § 2–614.1 of the Tax – General Article. 22

(f) The Administration shall use the Fund: 23

(1) to invest in the promotion, development, and implementation of: 24

(i) cost–effective energy efficienc y and conservation programs, 25
projects, or activities, including measurement and verification of energy savings; 26

(ii) renewable and clean energy resources; 27

(iii) climate change programs directly related to reducing or 28
24 HOUSE BILL 1640

mitigating the effects of climate change; and 1

(iv) demand response programs that are designed to promote 2
changes in electric usage by customers in response to: 3

1. changes in the price of electricity over time; or 4

2. incentives designed to induce lower electricity use at times 5
of high wholesale market prices or when system reliability is jeopardized; 6

(2) to provide targeted programs, projects, activities, and investments to 7
reduce electricity consumption by customers in the low –income and moderate –income 8
residential sectors; 9

(3) [to provide supplemental funds for low –income energy assistance 10
through the Electric Universal Service Program established under § 7 –512.1 of the Public 11
Utilities Article and other electric assistance programs in the Department of Human 12
Services; 13

(4) to provide rate relief by offsetting electricity rates of residential 14
customers, including an offset of surcharges imposed on ratepayers under Title 7, Subtitle 15
2, Part II of the Public Utilities Article; 16

(5)] to provide grants, loans, and ot her assistance and investment as 17
necessary and appropriate to implement the purposes of the Program as set forth in § 18
9–20B–03 of this subtitle; 19

[(6)] (4) to implement energy –related public education and outreach 20
initiatives regarding reducing energy consumption and greenhouse gas emissions; 21

[(7)] (5) to provide rebates under the Electric Vehicle Recharging 22
Equipment Rebate Program established under § 9–2009 of this title; 23

[(8)] (6) to provide grants to encourage combined heat and power projects 24
at industrial facilities; 25

[(9)] (7) to provide at least $1,200,000 in each fiscal year for fiscal year 26
2025 through fiscal year 2028 to the Climate Technology Founder’s Fund established under 27
§ 10–858 of the Economic Development Article; 28

[(10)] (8) subject to subsection (f –2) of this section, to provide at least 29
$2,100,000 in funding each fiscal year to the Maryland Energy Innovation Fund established 30
under § 10–835 of the Economic Development Article; 31

[(11)] (9) to provide at least $500,000 each yea r to the Resiliency Hub 32
Grant Program Fund under § 9–2011 of this title; 33
HOUSE BILL 1640 25

[(12)] (10) to provide grants through the Customer –Sited Solar Program 1
under § 9–2016 of this title; 2

[(13)] (11) notwithstanding subsection (g) of this section, to pay costs 3
associated with the Air and Radiation Administration within the Department of the 4
Environment; and 5

[(14)] (12) to pay the expenses of the Program. 6

(f–1) (1) Any funding provided under subsection [(f)(9)] (F)(7) of this section 7
that is not spent in a given fiscal year shall revert to the Fund in the following fiscal year. 8

(2) The Administration may provide additional funding for the purposes 9
stated in subsection [(f)(9)] (F)(7) of this section. 10

(f–2) Of the funds transferred to the Maryland Energy Innovation Fund under 11
subsection [(f)(10)] (F)(8) of this section: 12

(1) at least $1,200,000 may be used to fund the Maryland Clean Energy 13
Center established under § 10–806 of the Economic Development Article; and 14

(2) at least $900,000 may be used to fund the Maryland Energy Innovation 15
Institute established under § 10–829 of the Economic Development Article. 16

(g) Proceeds received by the Fund from the sale of allowances under § 2 –1002(g) 17
of the Environment Article shall be allocated as follows: 18

(1) at least 50% shall be credited to an energy assistance account to be used 19
for the Electric Universal Service Program and other electricity assistance programs in the 20
Department of Human Services; 21

(2) at least 20% shall be credited to a low and moderate income efficiency 22
and conservation programs account and to a general efficiency and conservation programs 23
account for energy efficiency and conservation programs, projects, or activities and demand 24
response programs, of which at least one –half shall be tar geted to the low and moderate 25
income efficiency and conservation programs account for: 26

(i) the low–income residential sector at no cost to the participants 27
of the programs, projects, or activities; and 28

(ii) the moderate–income residential sector; 29

(3) at least 20% shall be credited to a renewable and clean energy programs 30
account for: 31

26 HOUSE BILL 1640

(i) renewable and clean energy programs and initiatives; 1

(ii) energy–related public education and outreach; and 2

(iii) climate change and resiliency programs; and 3

(4) up to 10%, but not more than $7,500,000, shall be credited to an 4
administrative expense account for costs related to the administration of the Fund, 5
including the review of electric company plans for achieving electricity savings and demand 6
reductions that the electric companies are required under law to submit to the 7
Administration. 8

[(g–1) Proceeds received by the Fund from compliance fees under § 7–705(b)(2)(i)2 of 9
the Public Utilities Article shall be allocated as follows: 10

(1) beginning in fiscal year 2025, at least 20% of the proceeds shall be used 11
to provide grants to support the installation of new solar energy generating systems under 12
the Customer–Sited Solar Program; 13

(2) up to 10% of the proceeds shall be credited to an administrative expense 14
account for costs related to the administration of the Fund; 15

(3) proceeds collected but unused from a previous year shall be used before 16
proceeds allocated for the current year; and 17

(4) the Administration shall reallocate to oth er authorized uses any 18
proceeds that are not used within 3 fiscal years after collection.] 19

(h) (1) Energy efficiency and conservation programs under subsection (g)(2) of 20
this section include: 21

(i) low–income energy efficiency programs; 22

(ii) residential and small business energy efficiency programs; 23

(iii) commercial and industrial energy efficiency programs; 24

(iv) State and local energy efficiency programs; 25

(v) demand response programs; 26

(vi) loan programs and alternative financing mechanisms; and 27

(vii) grants to training funds and other organizations supporting job 28
training for deployment of energy efficiency and energy conservation technology and 29
equipment. 30

HOUSE BILL 1640 27

(2) Energy–related public education and outreach and renewable and clean 1
energy programs and initiatives under subsection (g)(3)(i) and (ii) of this section include: 2

(i) production incentives for specified renewable energy sources; 3

(ii) expansion of existing grant programs for solar, geothermal, and 4
wind programs; 5

(iii) loan programs and alternative financing mechanisms; and 6

(iv) consumer education and outreach programs that are designed to 7
reach low–income communities. 8

(i) [(1) Except as provided in paragraphs (2), (3), and (4) of this subsection, 9
compliance fees paid under § 7 –705(b) of the Public Utilities Article may be used only to 10
make loans and grants to support the creation of new Tier 1 renewable energy sources in 11
the State that are owned by or directly benefit: 12

(i) low– to moderate–income communities located in a census tract 13
with an average median income at or below 80% of the average median income for the State; 14
or 15

(ii) overburdened or underserved communities, as defined in § 1–701 16
of the Environment Article. 17

(2) Compliance fees paid u nder § 7 –705(b)(2)(i)2 of the Public Utilities 18
Article shall be accounted for separately within the Fund and may be used only to make 19
loans and grants to support the creation of new solar energy sources in the State that are 20
owned by or directly benefit: 21

(i) low– to moderate–income communities located in a census tract 22
with an average median income at or below 80% of the average median income for the State; 23

(ii) overburdened or underserved communities, as defined in § 1–701 24
of the Environment Article; or 25

(iii) households with low to moderate income, as defined in § 9–2016 26
of this title. 27

(3) For fiscal year 2026 only, up to $100,000,000 of compliance fees paid 28
under §§ 7–705(b) and 7–705(b)(2)(i)2 of the Public Utilities Article shall be accounted for 29
separately within the Fund and may be used for solar development on State government 30
property and local government clean energy projects. 31

(4) (i) Subject to subparagraphs (ii), (iii), and (iv) of this paragraph, 32
compliance fees paid under § 7–705 of the Public Utilities Article may be used to provide 33
grants to electric companies to be refunded or credited to each residential distribution 34
28 HOUSE BILL 1640

customer based on the customer’s consumption of electricity supply that is subject to the 1
renewable energy portfolio standard. 2

(ii) The refunding or crediting of amounts to residential distribution 3
customers shall be identified on the customer’s bill as a line item identified as a “legislative 4
energy relief refund”. 5

(iii) An electric company awarded a grant under this paragraph: 6

1. may not retain any of the grant funds to cover overhead 7
expenses; and 8

2. shall provide all of the grant funds to residential 9
distribution customers. 10

(iv) The process under subparagraphs (i) and (ii) of this pa ragraph 11
related to the refunding or crediting of amounts to residential distribution customers shall 12
be directed and overseen by the Commission. 13

(i–1) (1) (i) In this subsection the following words have the meanings 14
indicated. 15

(ii) “Area median income” has the meaning stated in § 4–1801 of the 16
Housing and Community Development Article. 17

(iii) “Low and moderate income” means having an annual household 18
income that is at or below 120% of the area median income. 19

(2) Compliance fees paid under § 7–705(b–1) of the Public Utilities Article 20
shall be accounted for separately within the Fund and may be used only to make loans and 21
grants to promote increased opportunities for the growth and development of small, 22
minority, women –owned, and veteran –owned busi nesses in the State that install 23
geothermal systems in the State. 24

(j)] (1) The Treasurer shall invest the money of the Fund in the same manner 25
as other State money may be invested. 26

(2) Any investment earnings of the Fund shall be paid into the Fund. 27

(3) Any repayment of principal and interest on loans made from the Fund 28
shall be paid into the Fund. 29

(4) Balances in the Fund shall be held for the benefit of the Program, shall 30
be expended solely for the purposes of the Program, and may not be used f or the general 31
obligations of government. 32

[(k)] (J) Expenditures from the Fund shall be made by: 33
HOUSE BILL 1640 29

(1) an appropriation in the annual State budget; or 1

(2) a budget amendment in accordance with § 7 –209 of the State Finance 2
and Procurement Article. 3

[(l)] (K) An expenditure by budget amendment may be made under subsection 4
[(k)] (J) of this section only after: 5

(1) the Administration has submitted the proposed budget amendment and 6
supporting documentation to the Senate Budget and Taxation Committee, S enate 7
Education, Energy, and the Environment Committee, House Appropriations Committee, 8
and House Economic Matters Committee; and 9

(2) the committees have had 45 days for review and comment. 10

[(m)] (L) (1) A loan or grant made available from the Fund to a unit of State 11
or local government shall comply with §§ 14 –416 and 17 –303 of the State Finance and 12
Procurement Article. 13

(2) At least 80% of workers participating in a project or program that 14
receives money from the Fund must reside within 50 miles of the project or program, or 15
another distance defined by the local jurisdiction where the project or program is located. 16

SECTION 6. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 17
as follows: 18

Article – Economic Development 19

10–802. 20

(a) The General Assembly finds that: 21

(2) continued exclusive reliance on traditional forms of electricity supply 22
entrenches the State’s dependence on fossil fuels, working against the State’s policy of 23
decreasing greenhouse gas production [, as evidenced by the State’s accession to the 24
Regional Greenhouse Gas Initiative]; 25

Article – Environment 26

2–107. 27

(a) There is a Maryland Clean Air Fund. 28

(b) [Except as provided in § 2 –1002(g) of this title, all ] ALL application fees, 29
permit fees, renewal fees, and funds collected by the Department under this title, OR Title 30
30 HOUSE BILL 1640

6, Subtitle 4 of this article, [or received from the Maryland Strategic Energy Investment 1
Fund under § 9 –20B–05(g)(3)(iii) of the State Government Article, ] including any civil or 2
administrative penalty or any fine imposed by a court under these provisions, shall be paid 3
into the Maryland Clean Air Fund. 4

2–1002. 5

[(g) (1) In this subsection, “allowance” means one ton of carbon dioxide that 6
may be bought, sold, traded, or banked for use under the Region al Greenhouse Gas 7
Initiative. 8

(2) Not later than June 30, 2007, the Governor shall include the State as a 9
full participant in the Regional Greenhouse Gas Initiative among Mid –Atlantic and 10
Northeast states. 11

(3) The State may withdraw from the Initiati ve, as provided in the 12
December 20, 2005 memorandum of understanding of the Initiative, at any time after 13
January 1, 2009, if the General Assembly enacts a law to approve the withdrawal. 14

(4) If the Regional Greenhouse Gas Initiative expires and there is a 15
successor organization with the same purposes and goals, the Governor is encouraged to 16
join the State in the successor organization. 17

(5) Notwithstanding § 2–107 of this title, all of the proceeds from the sale 18
of Maryland allowances under the Regiona l Greenhouse Gas Initiative shall be deposited 19
in the Maryland Strategic Energy Investment Fund under § 9 –20B–05 of the State 20
Government Article. 21

(6) If the State’s participation in the Regional Greenhouse Gas Initiative 22
ceases for any reason, the Governor shall report to the General Assembly, in accordance 23
with § 2–1257 of the State Government Article, regarding: 24

(i) Why participation ceased; and 25

(ii) A plan to reduce carbon dioxide emissions from power plants in 26
the State that considers th e use of Maryland grown, native, warm season grasses as a 27
possible method of reducing carbon emissions.] 28

Article – Natural Resources 29

5–307. 30

(a) In this section, “Fund” means the Mel Noland Woodland Incentives and 31
Fellowship Fund. 32

(g) The Department shall use the Fund: 33

HOUSE BILL 1640 31

(7) To provide financial assistance, as provided in the State budget, for the 1
administration of an urban and community forestry program established under § 5–426 of 2
this title, including: 3

(i) Increasing the number of communities with tree canopy goals; 4

(ii) Facilitating compliance with the Chesapeake Bay Program’s 5
forestry targets; AND 6

(iii) Supporting the use of urban tree canopy expansion for air quality 7
improvement purposes; [and 8

(iv) Helping achieve implementation o f Regional Greenhouse Gas 9
Initiative offset opportunities in urban areas;] 10

Article – State Government 11

9–20B–05. 12

(a) There is a Maryland Strategic Energy Investment Fund. 13

(b) The purpose of the Fund is to implement the Strategic Energy Investment 14
Program. 15

(c) The Administration shall administer the Fund. 16

(d) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 17
the State Finance and Procurement Article. 18

(2) The Treasurer shall hold the Fund separately and the Comptroller shall 19
account for the Fund. 20

(e) The Fund consists of: 21

(1) [all of the proceeds from the sale of allowances under § 2–1002(g) of the 22
Environment Article; 23

(2)] money appropriated in the State budget to the Program; 24

[(3)] (2) repayments and prepayments of principal and interest on loans 25
made from the Fund; 26

[(4)] (3) money received from any public or private source for the benefit 27
of the Fund; 28

[(5)] (4) money transferred from the Public Service Commission under § 29
32 HOUSE BILL 1640

7–207.2(d)(3) of the Public Utilities Article; and 1

[(6)] (5) money distributed under § 2–614.1 of the Tax – General Article. 2

(f) The Administration shall use the Fund: 3

(1) to invest in the promotion, development, and implementation of: 4

(i) cost–effective energy efficiency and conservation programs, 5
projects, or activities, including measurement and verification of energy savings; 6

(ii) renewable and clean energy resources; 7

(iii) climate change programs directly related to reducing or 8
mitigating the effects of climate change; and 9

(iv) demand response programs that are designed to promote 10
changes in electric usage by customers in response to: 11

1. changes in the price of electricity over time; or 12

2. incentives designed to induce lower electricity use at times 13
of high wholesale market prices or when system reliability is jeopardized; 14

(2) to provide targeted programs, projects, activities, and investments to 15
reduce electricity consumption by customers in the low –income and moderate –income 16
residential sectors; 17

(3) to provide grants, loans, and other assistance and investment as 18
necessary and appropriate to implement the purposes of the Program as set forth in § 19
9–20B–03 of this subtitle; 20

(4) to implement energy–related public education and outreach initiatives 21
regarding reducing energy consumption and greenhouse gas emissions; 22

(5) to provide rebates under the Electric Vehicle Recharging Equipment 23
Rebate Program established under § 9–2009 of this title; 24

(6) to provide grants to encourage combined h eat and power projects at 25
industrial facilities; 26

(7) to provide at least $1,200,000 in each fiscal year for fiscal year 2025 27
through fiscal year 2028 to the Climate Technology Founder’s Fund established under § 28
10–858 of the Economic Development Article; 29

(8) subject to subsection (f–2) of this section, to provide at least $2,100,000 30
in funding each fiscal year to the Maryland Energy Innovation Fund established under § 31
HOUSE BILL 1640 33

10–835 of the Economic Development Article; 1

(9) to provide at least $500,000 each year to the Resiliency Hub Grant 2
Program Fund under § 9–2011 of this title; 3

(10) to provide grants through the Customer –Sited Solar Program under § 4
9–2016 of this title; 5

(11) [notwithstanding subsection (g) of this section,] to pay costs associated 6
with the Air and Radiation Administration within the Department of the Environment; and 7

(12) to pay the expenses of the Program. 8

(f–1) (1) Any funding provided under subsection (f)( 7) of this section that is not 9
spent in a given fiscal year shall revert to the Fund in the following fiscal year. 10

(2) The Administration may provide additional funding for the purposes 11
stated in subsection (f)(7) of this section. 12

(f–2) Of the funds transferred to the Maryland Energy Innovation Fund under 13
subsection (f)(8) of this section: 14

(1) at least $1,200,000 may be used to fund the Maryland Clean Energy 15
Center established under § 10–806 of the Economic Development Article; and 16

(2) at least $900,000 may be used to fund the Maryland Energy Innovation 17
Institute established under § 10–829 of the Economic Development Article. 18

(g) [Proceeds received by the Fund from the sale of allowances under § 2–1002(g) 19
of the Environment Article shall be allocated as follows: 20

(1) at least 50% shall be credited to an energy assistance account to be used 21
for the Electric Universal Service Program and other electricity assistance programs in the 22
Department of Human Services; 23

(2) at least 20% shall be credited to a low and moderate income efficiency 24
and conservation programs account and to a general efficiency and conservation programs 25
account for energy efficiency and conservation programs, projects, or activities and demand 26
response programs, of which at least one –half shall be targeted to the low and moderate 27
income efficiency and conservation programs account for: 28

(i) the low–income residential sector at no cost to the participants 29
of the programs, projects, or activities; and 30

(ii) the moderate–income residential sector; 31

(3) at least 20% shall be credited to a renewable and clean energy programs 32
34 HOUSE BILL 1640

account for: 1

(i) renewable and clean energy programs and initiatives; 2

(ii) energy–related public education and outreach; and 3

(iii) climate change and resiliency programs; and 4

(4) up to 10%, but not more than $7,500,000, shall be credited to an 5
administrative expense account for costs related to the administration of the Fund, 6
including the review of electric company plans for achieving electricity savings and demand 7
reductions that the electric companies are required under law to submit to the 8
Administration. 9

(h) (1) Energy efficiency and conservation programs under subsection (g)(2) of 10
this section include: 11

(i) low–income energy efficiency programs; 12

(ii) residential and small business energy efficiency programs; 13

(iii) commercial and industrial energy efficiency programs; 14

(iv) State and local energy efficiency programs; 15

(v) demand response programs; 16

(vi) loan programs and alternative financing mechanisms; and 17

(vii) grants to training funds and other organizations supporting job 18
training for deployment of energy efficiency and energy conservation technology and 19
equipment. 20

(2) Energy–related public education and outreach and renewable and clean 21
energy programs and initiatives under subsection (g)(3)(i) and (ii) of this section include: 22

(i) production incentives for specified renewable energy sources; 23

(ii) expansion of existing grant programs for solar, geothermal, and 24
wind programs; 25

(iii) loan programs and alternative financing mechanisms; and 26

(iv) consumer education and outreach programs that are designed to 27
reach low–income communities. 28

(i)] (1) The Treasurer shall invest the money of the Fund in the same manner 29
HOUSE BILL 1640 35

as other State money may be invested. 1

(2) Any investment earnings of the Fund shall be paid into the Fund. 2

(3) Any repayment of principal and interest on loans made from the Fund 3
shall be paid into the Fund. 4

(4) Balances in the Fund shall be held for the benefit of the Program, shall 5
be expended solely for the purposes of the Program, and may not be used for the general 6
obligations of government. 7

[(j)] (H) Expenditures from the Fund shall be made by: 8

(1) an appropriation in the annual State budget; or 9

(2) a budget amendment in accordance with § 7 –209 of the State Finance 10
and Procurement Article. 11

[(k)] (I) An expenditure by budget amendment may be made under subsection 12
[(j)] (H) of this section only after: 13

(1) the Administration has submitted the proposed budget amendment and 14
supporting documentation to the Senate Budget and Taxation Committee, Senate 15
Education, Energy, and the Environment Committee, House Appropriations Committee, 16
and House Economic Matters Committee; and 17

(2) the committees have had 45 days for review and comment. 18

[(l)] (J) (1) A loan or grant made available from the Fund to a unit of State 19
or local government shall comply with §§ 14 –416 and 17 –303 of the State Finance and 20
Procurement Article. 21

(2) At least 80% of workers pa rticipating in a project or program that 22
receives money from the Fund must reside within 50 miles of the project or program, or 23
another distance defined by the local jurisdiction where the project or program is located. 24

9–20C–03. 25

(g) The Fund consists of: 26

(1) money appropriated by the State to the Fund; 27

(2) [money paid to the Fund by a qualified offshore wind project under § 28
7–704.1(h) of the Public Utilities Article; 29

(3)] money made available to the Fund through federal programs or private 30
36 HOUSE BILL 1640

contributions; 1

[(4)] (3) repayment of principal or payment of interest on a loan made 2
from the Fund; 3

[(5)] (4) proceeds from the sale, disposition, lease, or rental by the 4
Administration of collateral related to financing that the Administration provide s under 5
this subtitle; 6

[(6)] (5) investment earnings of the Fund; and 7

[(7)] (6) any other money made available to the Administration for the 8
Fund. 9

SECTION 7. AND BE IT FURTHER ENACTED, That, notwithstanding any other 10
law: 11

(a) (1) A public service company, as defined in § 1 –101 of the Public Utilities 12
Article, may not recover from rates or any stranded cost rider any costs associated with the 13
implementation of Title 7, Subtitle 2 , Part II of the Public Utilities Article as it existed 14
before October 1, 2026. 15

(2) Public service companies may implement voluntary energy efficiency 16
programs that are not funded through mandatory ratepayer charges. 17

(b) (1) The renewable energy portfolio standard is abolished by this Act, and 18
all compliance requirement s, including renewable energy credits and alternative 19
compliance fees, are terminated. 20

(2) On and after the effective date of this Act, an electricity supplier may 21
not recover from rates any costs related to the renewable energy portfolio standard. 22

SECTION 8. AND BE IT FURTHER ENACTED, That: 23

(a) The Governor shall immediately begin the process of withdrawing the State 24
from participation in the Regional Greenhouse Gas Initiative. 25

(b) Within 30 days after receiving notice that the State is withdrawn from 26
participation in the Regional Greenhouse Gas Initiative, the Governor shall report to the 27
General Assembly in accordance with § 2–1002(g)(6) of the Environment Article. 28

SECTION 9. AND BE IT FURTHER ENACTED, That: 29

(a) Section 6 of this Act shall take effect contingent on: 30

(1) the State’s withdrawal from participation in the Regional Greenhouse 31
Gas Initiative; and 32
HOUSE BILL 1640 37

(2) the receipt by the General Assembly of the report required under § 1
2–1002(g)(6) of the Environment Article. 2

(b) Within 5 day s after the report required under § 2 –1002(g)(6) of the 3
Environment Article is received, the General Assembly shall notify the Department of 4
Legislative Services. 5

(c) If notice of the receipt of the report is received by the Department of 6
Legislative Services on or before June 1, 2031, Section 6 of this Act shall take effect on the 7
date the notice is received by the Department of Legislative Services in accordance with 8
subsection (b) of this section. 9

(d) If notice of the receipt of the report is not received by the Department of 10
Legislative Services on or before June 1, 2031, Section 6 of this Act, with no further action 11
required by the General Assembly, shall be null and void. 12

SECTION 10. AND BE IT FURT HER ENACTED, That the publisher of the 13
Annotated Code of Maryland, in consultation with and subject to the approval of the 14
Department of Legislative Services, shall correct, with no further action required by the 15
General Assembly, cross –references and term inology rendered incorrect by this Act. The 16
publisher shall adequately describe any correction that is made in an editor’s note following 17
the section affected. 18

SECTION 11. AND BE IT FURTHER ENACTED, That a presently existing 19
obligation or contract right may not be impaired in any way by this Act. 20

SECTION 12. AND BE IT FURTHER ENACTED, That, subject to Section 9 of this 21
Act, this Act shall take effect October 1, 2026. 22