Moore, top Democrats would slash energy efficiency program to save ratepayers ‘hundreds’ a year

Gov. Wes Moore and top Maryland Democrats coalesced Friday around a sweeping energy package that aims to insulate households from surging utility costs by providing hundreds of millions of dollars in bill relief and clean energy grants, while reducing a staple energy efficiency program.

The plan, which stitches together bills previously introduced by the governor and legislative leaders, could save Marylanders “hundreds of dollars” a year, Moore said at a news conference. Democratic leaders estimate $150 in savings for the average household.

Friday morning’s announcement came after a legislative committee advanced a version of this package Thursday evening. It’s expected to see debate on the House floor early next week.

The bill takes steps aimed at easing utility bills while laying the groundwork to boost the state’s supply of clean energy sources such as solar power. Among them, it would authorize using $200 million from the state’s clean energy fund, half to help cover surcharges on utility bills and half to provide grants for solar and battery storage developers.

Controversially, the plan would temporarily scale back a nearly two-decade-old energy efficiency program known as EmPOWER Maryland, which has become a favorite of both ratepayer and climate advocates for its long-term customer savings and emissions reduction benefits.

Although Maryland climate groups praised other aspects of the bill Friday, they said the cuts to the energy efficiency program raise serious concerns.

Moore, Senate President Bill Ferguson and House Speaker Joseline Peña-Melnyk painted the plan as a response to President Donald Trump’s attacks on energy and climate programs, which they argued have exacerbated the sting of rising utility prices across the state.

“We’re pissed, and we know more needs to be done,” said Moore, who has directed his ire over energy prices lately at the federal government and grid operators.

Even his mother is feeling the pain, the governor said, after her utility bills jumped fourfold.

Among a broad slate of ideas, the bill, dubbed the Utility RELIEF Act, would cap how much money Baltimore Gas and Electric and other utilities can seek to recover from ratepayers for executive compensation and require utility companies to prioritize advanced transmission and grid-enhancing technologies.

It would eliminate a fee that utility companies can charge ratepayers for participating in the regional electric grid, what the governor’s office calls an antiquated incentive that costs Marylanders $20 million a year.

The bill would put new guardrails on energy-sucking data centers, requiring them to submit plans showing how they would employ local labor and deploy battery storage to lessen their impact on the grid.

Environmental groups generally welcomed the ideas, save for the implications for EmPOWER.

The package essentially uses those cuts to energy efficiency standards to reduce utility surcharges on ratepayer bills over the next three years. The deepest cuts to EmPOWER would last three years, then the benefits would be restored steadily through 2036.

Josh Tulkin, director of the Sierra Club’s Maryland chapter, estimates the bill would reduce the impacts of the utilities’ share of the EmPOWER program by roughly two-thirds, costing customers in the short and long terms.

While the proposal advanced out of a House committee, Tulkin has yet to see lawmakers’ own calculations on how much their bill would scale back EmPOWER. He said he wonders “whether our legislators don’t know the impact of what they’re doing or if they aren’t telling.”

Maryland regulators have estimated the program yields $2.21 in savings for every dollar invested, and Tulkin believes the rollbacks to the energy efficiency program would add the equivalent of hundreds of megawatts in new strain to the power grid during peak summer hours.

Del. Marc Korman, a Montgomery County Democrat, pushed back at Friday’s news conference on criticisms of the energy efficiency cuts, characterizing the changes as “short-term tweaks” but stressing that the program will remain in place and start building back to prior levels after three years.

In a Friday statement, Exelon, the Chicago-based company that owns BGE and other Maryland utilities, said utility officials are reviewing the proposal for “unintendend consequences” to ratepayers. The company said it supports “solutions that put customers first and strengthen affordability.”

Emily Scarr, senior adviser at the consumer advocacy group Maryland PIRG, called the energy efficiency cuts shortsighted and described parts of the estimated savings as “an accounting trick.” Promoting energy efficiency helps bring down bills in the short and longer terms, Scarr argued, while requiring less investment in costly grid infrastructure.

Scarr said she sees why the program, which appears as a line item on customer bills, was a tempting target.

“Understandably, our state leaders feel pressure to do something immediate to bring bills down, and the only line item they directly control is the EmPOWER line,” she said.

Gathering after leaders unveiled their plan, Republican lawmakers argued the roughly $12 in estimated monthly savings aren’t nearly enough.

State Republicans have long pushed to end the EmPOWER program. Although Democrats want to blame Trump, Sen. Justin Ready said Friday that the proposed cuts are “an admission that our energy bills are a self-inflicted problem.”

This week’s proposal comes a year after Maryland lawmakers earmarked $200 million in a separate energy package for ratepayer rebates, which averaged about an $80 credit per household. The first half was applied last fall, coming off a scorching summer with blasting air conditioners. The second was applied to bills last month.

Those rebates came out of a clean energy fund that’s become a recurrent target of officials balancing the budget. This year Moore recommended pulling nearly $300 million from the fund to patch a budget hole, a step endorsed by Senate leaders Friday in their own spending plan.

The legislative package is the product of weeks of negotiations with utility companies and climate advocates, Peña-Melnyk said Friday. Although both sides have criticized parts of the plan, she said, it’s the payoff for ratepayers that really matters.

“Do you know how to tell the surest sign that a big package of legislation is a good final product? You’re going to find some people on all sides who are a little unhappy,” she said. “You know it’s a good bill in Annapolis if everyone had to give up a little in the compromise.”