Regional Greenhouse Gas Initiative, EmPOWER Energy Efficiency Programs, and Net Energy Metering

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0801*

SENATE BILL 801
M3, M5, C5 6lr3429
CF 6lr1749
By: Senator McKay
Introduced and read first time: February 6, 2026
Assigned to: Education, Energy, and the Environment

A BILL ENTITLED

AN ACT concerning 1

Regional Greenhouse Gas Initiative, EmPOWER Energy Efficiency Programs, 2
and Net Energy Metering 3

FOR the purpose of requiring the Governor to withdraw the State from the Regional 4
Greenhouse Gas Initiative on or before a certain date; authorizing the State to rejoin 5
the Initiative under certain circumstances; eliminating the surcharge that allows 6
recovery of costs to utilities from the EmPOWER energy efficiency programs; 7
altering the rate at which eligible customer –generators are paid for net excess 8
generation; and generally relating to energy efficiency. 9

BY repealing and reenacting, with amendments, 10
Article – Environment 11
Section 2–1002(g) 12
Annotated Code of Maryland 13
(2013 Replacement Volume and 2025 Supplement) 14

BY repealing and reenacting, with amendments, 15
Article – Public Utilities 16
Section 7–222(d) and 7–306(f)(5)(iii) and (7) 17
Annotated Code of Maryland 18
(2025 Replacement Volume and 2025 Supplement) 19

BY repealing 20
Article – Public Utilities 21
Section 7–222(e) 22
Annotated Code of Maryland 23
(2025 Replacement Volume and 2025 Supplement) 24

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
That the Laws of Maryland read as follows: 26

2 SENATE BILL 801

Article – Environment 1

2–1002. 2

(g) (1) [In this subsection, “allowance” means one ton of carbon dioxide that 3
may be bought, sold, traded, or banked for use under the Regional Greenhouse Gas 4
Initiative. 5

(2) Not later than June 30, 2007] ON OR BEFORE JANUARY 1, 2027, the 6
Governor shall [include] WITHDRAW the State as a full participant in the Regional 7
Greenhouse Gas Initiative among Mid–Atlantic and Northeast states. 8

[(3) The State may withdraw from the Initiative, as provided in the 9
December 20, 2005 memorandum of understanding of the Initiative, at any time after 10
January 1, 2009, if the General Assembly enacts a law to approve the withdrawal. 11

(4) If the Regional Greenhouse Gas Initiative expires and there is a 12
successor organization with the same purposes and goals, the Governor is encouraged to 13
join the State in the successor organization. 14

(5) Notwithstanding § 2–107 of this title, all of the proceeds from the sale 15
of Maryland allowances under the Regional Greenhouse Gas Initiative shall be deposited 16
in the Maryland Strategic Energy Investment Fund under § 9 –20B–05 of the State 17
Government Article. 18

(6) If the State’s participation in the Regional Greenhouse Gas Initiative 19
ceases for any reason, t he Governor shall report to the General Assembly, in accordance 20
with § 2–1257 of the State Government Article, regarding: 21

(i) Why participation ceased; and 22

(ii) A plan to reduce carbon dioxide emissions from power plants in 23
the State that considers the use of Maryland grown, native, warm season grasses as a 24
possible method of reducing carbon emissions.] 25

(2) THE STATE MAY REJOIN AS A FULL PARTICIPANT IN THE 26
REGIONAL GREENHOUSE GAS INITIATIVE IF: 27

(I) ALL OTHER STATES SERVED BY PJM INTERCONNECTION 28
BECOME FULL MEMBERS OF THE REGIONAL GREENHOUSE GAS INITIATIVE; OR 29

(II) THE STATE BECOMES AND REM AINS A NET EXPORTER OF 30
ELECTRICITY. 31

(3) NOTWITHSTANDING § 2–107 OF THIS TITLE , IF THE STATE 32
REJOINS THE REGIONAL GREENHOUSE GAS INITIATIVE ALL OF THE PROCEEDS 33
SENATE BILL 801 3

FROM THE SALE OF MARYLAND ALLOWANCES U NDER THE INITIATIVE SHALL BE 1
DEPOSITED IN THE MARYLAND STRATEGIC ENERGY INVESTMENT FUND UNDER § 2
9–20B–05 OF THE STATE GOVERNMENT ARTICLE. 3

Article – Public Utilities 4

7–222. 5

(d) The Commission shall encourage and promote the efficient use and 6
conservation of energy in support of the greenhouse gas emissions reduction goals and 7
targets required under Title 2, Subtitle 12 of the Environment Article, established by the 8
Commission under § 7–223(b) of this subtitle, and specified in § 7–224(a)(2) of this subtitle 9
by: 10

(1) requiring each electric company and gas company to establish any 11
program or service that the Commission determines to be appropriate and cost –effective; 12
AND 13

(2) [adopting rate–making policies that provide, through a surcharge line 14
item on customer bills: 15

(i) full cost recovery of reasonably incurred costs for programs and 16
services established under item (1) of this subsection, including full recovery on a current 17
basis on or before January 1, 2028; 18

(ii) on or before December 31, 2032, the elimination of any unpaid 19
costs and unamortized costs that: 20

1. A. existed on December 31, 2024; or 21

B. were incurred before January 1, 2028; and 22

2. were accrued for the purpose of achieving statutory 23
targets for annual incremental gross energy savings; 24

(iii) compensation for any unpaid costs and unamortized costs under 25
item (ii) of this item at not more than each electric company’s and each gas company’s 26
average cost of outstanding debt; and 27

(iv) reasonable financial performance incentives and penalties for 28
investor–owned electric companies and gas companies, as appropriate; and 29

(3)] ensuring that adoption of electric customer choice under Subtitle 5 of 30
this title and gas customer choice under Subtitle 6 of this title does not adversely impact 31
these goals and targets. 32

4 SENATE BILL 801

[(e) The Commission shall, by regulation or order, require each electric company 1
and each gas company subject to subsection (a) of this section that has su bmitted to the 2
Commission, on or before July 1, 2024, a plan for achieving electricity or gas savings and 3
demand reduction targets to disclose the following information in a form and format readily 4
understandable to the average customer: 5

(1) that the su rcharge imposed in accordance with subsection (d) of this 6
section includes the cost of paying down the unpaid costs and unamortized costs that were 7
accrued over time by programs and services required by the Commission dating back to 8
2008; and 9

(2) the period of time that the surcharge will include excess charges to pay 10
down the unpaid costs and unamortized costs.] 11

7–306. 12

(f) (5) (iii) 1. If an eligible customer –generator elects to accrue net 13
excess generation for a period not to exceed 12 months under subparagraph (i)1 of this 14
paragraph, the dollar value of net excess generation shall be equal to the generation or 15
commodity portion of the rate that the eligible customer –generator would have been 16
charged by the electric company FOR STANDARD OFFER SERVICE averaged over the 17
previous 12–month period ending with the billing cycle that is complete immediately before 18
the end of April multiplied by the number of kilowatt–hours of net excess generation. 19

2. For an eligible customer –generator that elects to ac crue 20
net excess generation under subparagraph (i)1 of this paragraph and is served by a 21
community choice aggregator or an electricity supplier, the dollar value of the net excess 22
generation shall be equal to the generation or commodity rate that the custom er would 23
have been charged by the community choice aggregator or electricity supplier FOR 24
STANDARD OFFER SERVICE, WHICHEVER IS LESS , multiplied by the number of 25
kilowatt–hours of net excess generation. 26

(7) (i) Notwithstanding paragraphs (5) and (6) of t his subsection, an 27
eligible customer–generator served by an electric cooperative that serves a population of 28
less than 250,000 in its distribution territory may choose to be paid for the dollar value of 29
net excess generation remaining at the end of each mo nth instead of at the end of the 30
accrual period specified under paragraph (5)(i)1 of this subsection. 31

(ii) If an eligible customer–generator chooses to be paid for the dollar 32
value of net excess generation remaining at the end of each month: 33

1. the customer–generator may accrue net excess generation 34
on a monthly basis; 35

2. the dollar value of the net excess generation shall be equal 36
to the generation or commodity portion of the rate that the eligible customer –generator 37
SENATE BILL 801 5

would have been charged b y the electric company FOR STANDARD OFFER SERVICE for 1
the previous month; and 2

3. on or before 30 days after the end of each month, the 3
electric cooperative shall pay the eligible customer –generator for the dollar value of net 4
excess generation remaining at the end of the previous month. 5

SECTION 2. AND BE IT FURTHER ENACTED, That the Governor shall notify the 6
Department of Legislative Services: 7

(1) within 5 days after withdrawing from the Regional Greenhouse Gas 8
Initiative in accordance with § 2 –1002(g)(1) of the Environment Article, as enacted by 9
Section 1 of this Act; and 10

(2) within 5 days after the State rejoins the Regional Greenhouse Gas 11
Initiative in accordance with § 2 –1002(g)(2) of the Environment Article, as enacted by 12
Section 1 of this Act. 13

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
October 1, 2026. 15