As Maryland slips on climate goals, Moore’s budget raids clean energy fund for $725M

In these lean times for Maryland government, one stack of cash has become a tempting reserve for Democratic leaders: the state’s only fund dedicated to clean energy.

Maryland leaders entered this legislative session needing to cover a roughly $1.4 billion budget hole, a mandate Gov. Wes Moore hopes to accomplish by raiding the state’s clean energy fund for hundreds of millions of dollars.

Lawmakers are hammering out their own spending plan, but, should they accept Moore’s recommendation, Maryland will have taken over $1 billion from the clean energy fund in the last two years — all as the state slips further behind in its effort to cut greenhouse gas emissions.

For many environmental advocates, such cuts threaten the state’s climate promises.

To conclude anything else is “absurd,” said Josh Tulkin, director of the Maryland chapter of the Sierra Club.

Although Tulkin would hate to see Maryland step back from its climate targets — under a 2022 law, the state aims to cut emissions 60% by 2031 and achieve net zero by 2045 — he’s heard little discussion in Annapolis about reassessing those goals. To him, that’s a sign leaders aren’t talking honestly about the consequences of their financial decisions.

In his proposed budget, Moore wants to drain about $725 million from the money set aside for clean energy, known as the Strategic Energy Investment Fund. Much of that sum — $292 million — would go toward balancing the budget. The governor also wants to use $100 million on rebates for utility customers and take over $300 million more for other programs, some of which, such as incentives for solar developers, support climate goals.

All told, the proposal would leave about $164 million in the fund, according to the governor’s budget outline.

The General Assembly created the Strategic Energy Investment Fund in 2008 to boost Maryland’s supply of clean, affordable energy. In recent years, the fund has ballooned, amassing a fat stash of cash the state could spend on clean tech such as heat pumps and solar arrays.

Or covering financial lesions.

Asked about the idea to draw down the climate fund, Moore spokesperson Rhyan Lake pointed to President Donald Trump’s impact on the state economy and emissions goals but said the governor “believes we can walk and chew gum at the same time,” cutting costs for Maryland families while building clean energy.

“That’s the kind of fiscally responsible leadership Marylanders expect,” Lake said, “and it’s exactly what Gov. Moore’s budget delivers.”

Many advocates disagree, and they packed a committee meeting last month to make that known.

Whether Democratic leadership in the legislature will take Moore’s recommendations isn’t clear, but the climate fund appears to be in their crosshairs, too.

Senate Budget Chair Guy Guzzone said this week the General Assembly’s plan relies on taking the “same amount” of money from the Strategic Energy Investment Fund for the budget gap. His committee is expected to release details Friday morning.

Lawmakers have proposed a handful of bills this session to safeguard clean energy spending in the years ahead, but when it comes to this year, some advocates seem resigned to heavy losses.

The bulk of the fund’s revenue comes through charges on excess emissions at power plants and fees utilities must pay the state when they don’t invest in clean energy sources such as wind and solar.

These compliance fees have exploded in the last few years as utility companies have opted to pay penalties over buying often pricier clean energy credits. Only a few years ago, the fund’s annual revenues from these compliance payments measured in the tens of thousands of dollars. They’ve skyrocketed since. Utilities forked over $77 million in alternative payments in 2022 and $365 million in 2025.

To Del. Lorig Charkoudian, a Montgomery County Democrat, that’s a problem.

Not only do the ballooning compliance payments show utilities aren’t buying renewable energy, but they’ve created a tempting pile of cash for state budget writers.

Charkoudian thinks the governor’s plan to raid the climate fund is “entirely inappropriate,” and she’s introduced a bill that would funnel utility compliance fees to solar energy before they ever amass in the clean energy fund — taking temptation off the table.

Another bill introduced by Democratic Del. Dana Stein seeks to guarantee at least $365 million from the clean energy fund goes to climate causes in future years.

Although the clean energy fund could take a big hit to cover this year’s budget, there may be less enthusiasm for burning money on utility rebates than a year ago, when lawmakers gave $200 million from the clean energy fund to ratepayers.

Is another $100 million in rebates — for a one-time discount of about $40 a household — really helpful, Montgomery County Democrat Sen. Cheryl Kagan asked the governor’s team at one recent hearing, or merely “a modest election year ploy”?

Moore’s spending plan would provide about $70 million in new grants for solar and battery developers, but some advocates worry other parts of his proposal stretch the clean energy fund’s purpose.

There’s $42 million to help universities with Trump administration cuts to “energy, resiliency, and climate-related research fields,” and another $30 million for various flood remediation projects and university renovations.

Another $10 million would help state officials identify corridors for transmission lines, and more would fund a state energy analysis office.

The Sierra Club’s Tulkin is skeptical these appropriations boost renewables or energy efficiency, as the fund is supposed to do. The climate group also pushed back on separate proposals from Democratic leadership to slash the state’s energy efficiency program and further stretch the purpose of the clean energy fund.

Kim Coble, director of the Maryland League of Conservation Voters, is less worried about this year’s finances than about the state’s longer-term commitments to spending on clean energy. In the campaign to slash emissions, the easy work is done, Coble said, and the state should get aggressive about its climate goals or move the goal posts.

The Banner’s Pamela Wood contributed to this article.