Public Utilities - Large Load Customers - Registration and Demand Response Program

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0992*

SENATE BILL 992
C5, Q4 6lr2097

By: Senators Hester, Feldman, Lewis Young, Sydnor, Love, Hettleman, Ready, and
Folden
Introduced and read first time: February 19, 2026
Assigned to: Rules

A BILL ENTITLED

AN ACT concerning 1

Public Utilities – Large Load Customers – Registration and Demand Response 2
Program 3

FOR the purpose of requiring a certain large load customer to register with the Public 4
Service Commission before interconnecting with the electric system; establishing the 5
requirements for the registration of a large load customer; requiring that a certain 6
data center be eligible for and considered a “qualified data center” for a certain tax 7
exemption under certain circumstances; requiring the Commission to take certain 8
curtailment actions; requiring the Commission to establish a Demand Respo nse 9
Program for large load customers; and generally relating to large load customers and 10
demand response. 11

BY adding to 12
Article – Public Utilities 13
Section 7–321 and 7–1008 14
Annotated Code of Maryland 15
(2025 Replacement Volume and 2025 Supplement) 16

BY repealing and reenacting, without amendments, 17
Article – Tax – General 18
Section 11–239(a)(1), (2), and (6) and (b) 19
Annotated Code of Maryland 20
(2022 Replacement Volume and 2025 Supplement) 21

BY repealing and reenacting, with amendments, 22
Article – Tax – General 23
Section 11–239(a)(5) 24
Annotated Code of Maryland 25
(2022 Replacement Volume and 2025 Supplement) 26

2 SENATE BILL 992

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2

Article – Public Utilities 3

7–321. 4

(A) (1) IN THIS SECTION THE FOL LOWING WORDS HAVE TH E MEANINGS 5
INDICATED. 6

(2) “DATA CENTER” HAS THE MEANING STAT ED IN § 11–239 OF THE 7
TAX – GENERAL ARTICLE. 8

(3) (I) “LARGE LOAD CUSTOMER” MEANS A COMMERCIAL O R 9
INDUSTRIAL CUSTOMER FOR RETAIL ELECTRIC SERVICE THAT: 10

1. HAS OR IS PROJECTED TO HAVE AN AGGREGATE 11
MONTHLY DEMAND OF AT LEAST 25 MEGAWATTS; AND 12

2. HAS OR IS PROJECTED TO HAVE A LOAD FACTO R OF 13
MORE THAN 80%. 14

(II) “LARGE LOAD CUSTOMER” DOES NOT INCLUDE A W ATER 15
COMPANY OR SEWAGE DISPOSAL COMPANY. 16

(4) “ON–SITE BACKUP GENERATI NG FACILITY” MEANS A 17
GENERATING FACILITY THAT IS: 18

(I) NOT CONNECTED TO THE ELECTRIC SYSTEM; AND 19

(II) CAPABLE OF SERVING A T LEAST 50% OF THE LOAD 20
REQUIRED BY A LARGE LOAD CUSTOMER. 21

(B) (1) NOTWITHSTANDING ANY O THER PROVISION OF LA W, AND IN 22
ADDITION TO THE REQUIREMENTS UNDER § 4–212 OF THIS ARTICLE, A LARGE LOAD 23
CUSTOMER SHALL REGIS TER WITH THE COMMISSION IN ACCORDA NCE WITH THIS 24
SECTION BEFORE THE L ARGE LOAD CUSTOMER I NTERCONNECTS WITH THE 25
ELECTRIC SYSTEM. 26

(2) THE COMMISSION MAY CHARGE A REASONABLE FEE FOR THE 27
REGISTRATION UNDER THIS SECTION. 28

SENATE BILL 992 3

(C) (1) ON OR BEFORE JANUARY 1, 2027, THE COMMISSION, BY ORDER 1
OR REGULATION , SHALL ESTABLISH A PR OCESS TO REGISTER LA RGE LOAD 2
CUSTOMERS. 3

(2) THE REGISTRATION PROCESS ESTABLISHED BY THE COMMISSION 4
SHALL: 5

(I) APPLY TO NEW OR EXPANDED INTERCONNECTION OF LARGE 6
LOAD CUSTOMERS; 7

(II) REQUIRE A LARGE LOAD CUSTOMER TO DISCLOSE TO THE 8
COMMISSION: 9

1. WHETHER THE CUSTOMER IS PURSUING A 10
SUBSTANTIALLY SIMILAR INTERCONNECTION RE QUEST WITH ANOTHER E LECTRIC 11
COMPANY IN THE STATE, OR IN ANOTHER STATE IN THE PJM REGION, AND 12
WHETHER THE APPROVAL OF THE SIMILAR INTERCON NECTION REQUEST WOULD 13
CAUSE THE CUSTOMER T O MATERIALLY CHANGE , DELAY, OR WITHDRAW THE 14
INTERCONNECTION REQUEST; 15

2. WHETHER THE CUSTOMER INTENDS TO: 16

A. ACQUIRE OR BUILD ENE RGY GENERATION SOLELY 17
FOR THE CUSTOMER; 18

B. USE ENERGY SOLELY FROM THE ELECTRIC 19
DISTRIBUTION SYSTEM; OR 20

C. BOTH; 21

3. INFORMATION ABOUT THE TYPE OF ON–SITE BACKUP 22
GENERATING FACILITY THAT WOULD BE USED IN THE EVENT OF A SYSTEM OUTAGE; 23
AND 24

4. INFORMATION ABOUT: 25

A. THE AMOUNT OF WATER THAT WOULD BE USED EACH 26
MONTH; 27

B. THE SOURCE OF THE WA TER THAT WOULD BE USED; 28
AND 29

4 SENATE BILL 992

C. THE STATUS OF APPLICATIONS FOR WATER 1
APPROPRIATION OR USE PERMITS SUBMITTED TO THE MARYLAND DEPARTMENT OF 2
THE ENVIRONMENT OR A WATER UTILITY OWNED BY THE STATE OR A LOCAL 3
GOVERNMENT; 4

(III) INCLUDE A METHOD FOR THE LARGE LOAD CUSTO MER TO 5
DEMONSTRATE SITE CONTROL FOR THE PROPOSED LOCATION OF THE LARGE LOAD 6
CUSTOMER’S PREMISES THROUGH OWNERSHIP , LEASE CONTROL , OR ANOTHER 7
METHOD ESTABLISHED BY THE COMMISSION; 8

(IV) INCLUDE A UNIFORM FI NANCIAL COMMITMENT 9
REQUIREMENT FOR THE LARGE LOAD CUSTOMER ’S DEVELOPMENT OF 10
TRANSMISSION INFRAST RUCTURE THAT IS NEEDED TO SERVE THE LARGE LOAD 11
CUSTOMER, INCLUDING: 12

1. SECURITY PROVIDED ON A DOLLAR PER MEGAWAT T 13
BASIS, AS SET BY THE COMMISSION; 14

2. TRANSMISSION CONSTRUCTION FINANCING; 15

3. SECURITY UNDER AN AG REEMENT REQUIRING A 16
LARGE LOAD CUSTOMER TO PAY FOR EQUIPMENT OR SERVICES IN ADVANCE OF ANY 17
ESTABLISHED ELECTRIC SERVICE; OR 18

4. ANY OTHER FORM OF FI NANCIAL COMMITMENT 19
REQUIRED BY THE COMMISSION; 20

(V) ESTABLISH A PROCEDURE TO ALLOW THE COMMISSION TO 21
ACCESS, WHILE MAINTAINING CO NFIDENTIALITY, ANY INFORMATION COLL ECTED 22
BY THE INTERCONNECTI NG ELECTRIC COMPANY FOR TRANSMISSION PLA NNING 23
ANALYSES; AND 24

(VI) ESTABLISH ANY OTHER STANDARDS THAT THE 25
COMMISSION CONSIDERS NECESSARY. 26

(D) (1) THE COMMISSION SHALL CERT IFY WHETHER A REGISTRATION 27
UNDER THIS SECTION I S COMPLETE WITHIN 30 DAYS AFTER RECEIVING THE 28
INFORMATION REQUIRED UNDER SUBSECTION (C) OF THIS SECTION. 29

(2) IF THE COMMISSION DETERMINES THE REGISTRATION 30
INFORMATION IS INCOM PLETE, THE COMMISSION MAY EXTEND ANY TIME FRAME 31
PROVIDED IN AN ORDER OR REGULATION ESTABL ISHING THE REGISTRAT ION 32
PROCESS UNDER THIS SECTION. 33
SENATE BILL 992 5

(E) A DATA CENTER THAT IS A LARGE LOAD CUSTOMER SHA LL BE 1
CONSIDERED A QUALIFIED DATA CENTER FOR THE SALES AND USE TAX EXEMPTION 2
UNDER § 11–239 OF THE TAX – GENERAL ARTICLE IF THE LARGE LOAD CUSTOMER: 3

(1) REGISTERS UNDER THIS SECTION; 4

(2) AGREES TO PARTICIPATE IN THE DEMAND RESPONSE PROGRAM 5
UNDER § 7–1008 OF THIS TITLE; AND 6

(3) (I) PROVIDES ENOUGH BEHIND –THE–METER ENERGY 7
GENERATION TO FULLY OPERATE THE DATA CENTER; OR 8

(II) AGREES TO PURCHASE 100% RENEWABLE ENERGY 9
LOCATED IN THE PJM SERVICE TERRITORY TO FULLY OPERATE THE DATA CENTER. 10

(F) (1) IN ADDITION TO THE REQUIREMENTS UNDER THIS SECTION A ND 11
ANY OTHER AUTHORITY OF THE COMMISSION TO CURTAIL OR RESTRICT LOAD TO A 12
CUSTOMER, THE COMMISSION SHALL REQUIRE THAT: 13

(I) ANY CURTAILMENT ORDE R FROM PJM ASSIGNED TO AN 14
ELECTRIC COMPANY SERVING ONE OR MORE LARGE LOAD CUSTOMERS BE PASSED 15
THROUGH TO THE LARGE LOAD CUSTOMERS ONLY AND NOT ASSIGNED OR PASSED 16
THROUGH TO ANY OTHER CUSTOMER; 17

(II) ANY FINANCIAL OBLIGA TION ASSIGNED TO AN ELECTRIC 18
COMPANY AS A RESULT OF AN ORDER F ROM PJM FOR PROCUREMENT OF N EW 19
ENERGY CAPACITY AS A RESULT OF THE INTERC ONNECTION OF A LARGE LOAD 20
CUSTOMER BE PASSED THROUGH TO THE LARGE LOAD CUSTOMER; 21

(III) ANY LARGE LOAD CUSTOMER WHOSE INTERCONNECTION TO 22
THE ELECTRIC SYSTEM REQUIRES AN ORDER FROM PJM FOR THE PROCUREMENT 23
OF NEW ENERGY CAPACI TY TO PROVIDE FINANCIAL SE CURITY TO THE STATE TO 24
ENSURE THAT RESIDENT IAL CUSTOMERS ARE HELD HARMLESS FO R COSTS 25
ASSOCIATED WITH THE NEW ENERGY CAPACITY PROCUREMENT; AND 26

(IV) ANY LARGE LOAD CUSTOMER APPLYING FOR NEW SERVICE 27
PROVIDE TO PJM: 28

1. EXPECTED LOAD USAGE; 29

2. EXPECTED PEAK LOAD USAGE; 30

6 SENATE BILL 992

3. ANY PREEXISTING REQU IREMENTS OR CONTRACT S 1
THAT ARE CONDITIONS PRECEDENT TO COMPLETION OF CONSTR UCTION OR 2
INTERCONNECTION; AND 3

4. ANY OTHER INFORMATIO N REQUIRED BY THE 4
COMMISSION OR PJM. 5

(2) NOTHING IN PARAGRAPH (1)(I) OF THIS SUBSECTION I S 6
INTENDED TO PROHIBIT: 7

(I) AN ELECTRIC COMPANY FROM TAKING ANY ACTI ONS TO 8
MAINTAIN SYSTEM RELIABILITY; OR 9

(II) A LARGE LOAD CUSTOMER FROM PARTICIPATING IN THE 10
DEMAND RESPONSE PROGRAM UNDER § 7–1008 OF THIS TITLE. 11

(G) ON OR BEFORE JANUARY 1, 2028, AND EACH JANUARY 1 THEREAFTER, 12
THE COMMISSION SHALL REPO RT TO THE SENATE COMMITTEE ON EDUCATION, 13
ENERGY, AND THE ENVIRONMENT AND THE HOUSE ENVIRONMENT AND 14
TRANSPORTATION COMMITTEE, IN ACCORDANCE WITH § 2–1257 OF THE STATE 15
GOVERNMENT ARTICLE, ON THE REGISTRATION PROGRAM UNDER THIS SECTION. 16

7–1008. 17

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 18
INDICATED. 19

(2) “LARGE LOAD CUSTOMER” HAS THE MEANING STATED IN § 7–321 20
OF THIS TITLE. 21

(3) “PROGRAM” MEANS THE DEMAND RESPONSE PROGRAM. 22

(B) THE COMMISSION SHALL ESTABLISH A DEMAND RESPONSE PROGRAM 23
FOR LARGE LOAD CUSTOMERS. 24

(C) THE COMMISSION SHALL OFFE R EACH LARGE LOAD CU STOMER THAT 25
PARTICIPATES IN THE PROGRAM THE OPTION OF CONTRACTING FOR: 26

(1) 6 NONCONSECUTIVE 4–HOUR PERIODS OF LOAD MANAGEMENT OR 27
DEMAND–SIDE MANAGEMENT TIME SLOTS PER CALENDAR YEAR; OR 28

(2) 10 NONCONSECUTIVE 10–HOUR PERIODS OF LOAD MANAGEMENT 29
OR DEMAND–SIDE MANAGEMENT TIME SLOTS PER CALENDAR YEAR. 30
SENATE BILL 992 7

(D) THE COMMISSION SHALL: 1

(1) DEVELOP A CLEAR COMP ENSATION STRUCTURE O R FINANCIAL 2
INCENTIVES FOR PROGRAM PARTICIPATION; 3

(2) ESTABLISH A CLEARLY DEFINED PENALTY SYST EM FOR 4
NONPERFORMANCE DURIN G ANY FORCE M AJEURE EVENTS BY A P ARTICIPATING 5
LARGE LOAD CUSTOMER; 6

(3) ESTABLISH A DISPUTE RESOLUTION PROCESS; AND 7

(4) ESTABLISH MULTIPLE N OTIFICATION AND COMM UNICATION 8
CHANNELS FOR PARTICIPATING LARGE LOAD CUSTOMERS. 9

(E) EACH ELECTRIC COMPANY SHALL PROVIDE PAR TICIPATING LARGE 10
LOAD CUSTOMERS: 11

(1) 24 HOURS OF ADVANCE NOT ICE OF POTENTIAL DEM AND 12
RESPONSE PERIODS; AND 13

(2) 30 MINUTES OF NOTICE BE FORE EACH DEMAND RES PONSE 14
PERIOD. 15

(F) THE COMMISSION SHALL ADOPT REGULATIONS THAT: 16

(1) PROHIBIT BEHIND –THE–METER ENERGY STORAGE FACIL ITIES 17
FROM BEING INCLUDED IN A PARTICIPATING LARGE LOAD CUSTOMER’S LOAD; 18

(2) DEVELOP GUIDELINES A ND LIMITATIONS FOR C HARGING 19
BEHIND–THE–METER ENERGY STORAGE FACILITIES DURING CE RTAIN PEAK 20
DEMAND, AS DETERMINED BY THE COMMISSION; AND 21

(3) ESTABLISH A METHOD FOR MEASURING A PARTICIPATING LARGE 22
LOAD CUSTOMER ’S DEMAND RESPONSE PE RFORMANCE IN ACCORDA NCE WITH 23
SUBSECTION (G) OF THIS SECTION. 24

(G) IN MEASURING A PARTIC IPATING LARGE LOAD C USTOMER’S DEMAND 25
RESPONSE PERFORMANCE, THE COMMISSION SHALL FACTOR IN: 26

(1) NEW VIRTUAL POWER PL ANT AGGREGATION OPTI ONS 27
DEVELOPED BY ELECTRIC COMPANIES; 28

8 SENATE BILL 992

(2) FRONT–OF–METER ENERGY STORAGE FACILITIES; AND 1

(3) NONWIRE ALTERNATIVES , INCLUDING GRID ENHAN CING 2
TECHNOLOGIES, THAT FEED ELECTRICITY BACK TO THE ELECTRIC SYSTEM. 3

(H) A PARTICIPATING LARGE LOAD CUSTOMER CONSTR UCTING A 4
BEHIND–THE–METER ENERGY STORAGE FACILITY UNDER THE PROGRAM IS EXEMPT 5
FROM THE REQUIREMENTS TO: 6

(1) OBTAIN A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY 7
UNDER § 7–207 OF THIS TITLE; OR 8

(2) OBTAIN COMMISSION APPROVAL UNDER § 7–207.1 OF THIS TITLE. 9

(I) ON OR BEFORE JANUARY 1, 2028, AND EACH JANUARY 1 THEREAFTER, 10
THE COMMISSION SHALL REPO RT TO THE SENATE COMMITTEE ON EDUCATION, 11
ENERGY, AND THE ENVIRONMENT AND THE HOUSE ENVIRONMENT AND 12
TRANSPORTATION COMMITTEE, IN ACCORDANCE WITH § 2–1257 OF THE STATE 13
GOVERNMENT ARTICLE, ON THE PROGRAM ESTABLISHED UNDER THIS SECTION. 14

Article – Tax – General 15

11–239. 16

(a) (1) In this section the following words have the meanings indicated. 17

(2) “Data center” means a building or group of buildings used to house 18
computer systems, computer storage equipment, and associated infrastructure that 19
businesses or other organizations use to organize, process, store, and disseminate large 20
amounts of data. 21

(5) (i) “Qualified data center” means: 22

1. a data center located in the State in which an individual 23
or a corporation, within 3 years after submitting an application for the sales and use tax 24
exemption under this section, has: 25

[1.] A. for a data center located within a Tier I area, 26
invested at least $2,000,000 in qualified data center personal property and created at least 27
five qualified positions; or 28

[2.] B. for a data center located in any other area of the 29
State, invested at least $5,000,000 in qualified data center personal property and created 30
at least five qualified positions; OR 31

SENATE BILL 992 9

2. A DATA CENTER THAT HAS MET THE REQUIREMENTS 1
OF § 7–321(E) OF THE PUBLIC UTILITIES ARTICLE. 2

(ii) “Qualified data center” includes: 3

1. a data center that is a co –located or hosting data center 4
where equipment, space, and bandwidth are available to lease to multiple customers; and 5

2. an enterprise data center owned and operated by the 6
company it supports. 7

(6) (i) “Qualified data center personal property” means personal 8
property purchased or leased to establish or operate a data center. 9

(ii) “Qualified data center personal property” includes: 10

1. computer equipment or enabling software used for the 11
processing, storage, retrieval, or communication of data, including servers, routers, 12
connections, and other enabling hardware used in the operation of that equipment; 13

2. heating, ventilation, and air–conditioning and mechanical 14
systems, including chillers, cooling towers, air –handling units, pumps, energy storage or 15
energy efficiency technology, and other capital equipment used in the operation o f that 16
equipment; and 17

3. equipment necessary for the generation, transformation, 18
transmission, distribution, or management of electricity, including exterior substations, 19
generators, transformers, unit substations, uninterruptible power supply systems , 20
batteries, power distribution units, remote power panels, and any other capital equipment 21
necessary for these purposes. 22

(b) The sales and use tax does not apply to the sale of qualified data center 23
personal property for use at a qualified data center i f the buyer provides the vendor with 24
evidence of eligibility for the exemption issued by the Comptroller. 25

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 26
1, 2026. 27