Legal Bulletins

On the last day of the 2026 session, the General Assembly passed House Bill 1532- otherwise known as the Reducing Energy Load Inflation for Everyday Families (RELIEF) Act. Although the bill included extensive components from bills that had been debated during earlier committee hearings, the final assemblage of the pieces occurred quickly.  The printed copy runs for 242 pages, includes some 32 amendments, and has substantial portions that were added and then stricken before the bill was finalized for the Governor’s desk. 

The enrolled version appears likely to provide very modest rate relief in the short term.  Estimates average around $150 a year for residential customers and largely consist of refunds or reductions in surcharges collected on electricity supply.  At the same time, predictions are that electricity prices at the wholesale (PJM) level are likely to increase this summer.  So, it is unlikely that residential customers will see significant reductions in their bills in the short term.  The truth is that there was little that the Assembly could do in the short term to provide significant relief.  The problems – the shortage of supply, the increase in demand and the need to upgrade the grid - developed over the years and it will require years to address.

In the middle and longer term, some provisions could result in rate relief or, at least, less rate inflation depending on the implementation of the provisions by the Maryland Public Service Commission and other state agencies.  The bill attempts to achieve longer-term benefits by changing the way rates are set by utilities and encouraging the building of additional generation in Maryland.  However, it is unclear whether the changes in ratemaking will have a significant impact. It is equally unclear if there will be any significant new construction in Maryland given the remaining legal hurdles in the state and the global demand for components.

This short bulletin summarizes some of the most important provisions of the RELIEF Act, but you are encouraged to reach out to me or other members of the Gordon Feinblatt Energy and Environment team for details.

Strategic Energy Investment Fund (SEIF) and Alternative Compliance Payments (ACP) Diversions. 

The Act’s most significant near-term rate relief is expected to come from diverting funds from the SEIF and ACP accounts to provide direct customer rebates. SEIF and ACP revenues are collected from electricity suppliers that do not meet greenhouse gas emissions-reduction requirements, and those costs are widely understood to have been passed through to customers; accordingly, the diversions operate in practice as a partial rebate of prior charges.

For fiscal year 2027, the enrolled legislation directs several major transfers. It allocates $100 million in ACP funds to the Public Service Commission (PSC) for refunds to residential customers administered through the EmPOWER program; directs $72.65 million to the Maryland Energy Administration (MEA) Residential Energy Equity Program to support low- and moderate-income households; and provides an additional $100 million in ACP funds to the MEA to fund reverse-auction grants that subsidize new renewable energy projects.

EmPOWER Maryland Changes. 

EmPOWER was established to subsidize energy-efficiency improvements on the premise that reducing demand is often the most cost-effective means of meeting energy needs; it was later amended to emphasize greenhouse gas reductions attributable to reduced consumption. The program is financed through a surcharge on electric rates. The Act seeks to mitigate the surcharge’s near-term impact by temporarily reducing annual greenhouse gas reduction targets and by expanding the range of qualifying projects.

Specifically, the Act temporarily lowers the annual emissions-reduction targets for electric companies to 1.75% for 2027–2029, 2.0% for 2030–2032, and 2.25% for 2033–2035, with the target returning to 2.5% beginning in 2036. It also removes gas companies from the program starting in 2027 and establishes a wind-down period, while permitting up to 20% of required reductions to be satisfied by community and residential solar (for 2027–2029).  This is likely to reduce EmPOWER surcharges on bills for the 2027 to 2035 time period.

Utility Rate Making Changes. 

Utility rates have traditionally been set by reviewing historical costs, determining whether those costs were prudently incurred, and then allowing a reasonable return. In recent years, however, the PSC has increasingly relied on multi-year forecasts of future costs, with subsequent “true-ups” after costs are incurred. Although early House drafts would have prohibited the forecast test-year approach, the enrolled Act instead imposes a one-year moratorium on multi-year plans, limits true-up mechanisms, and directs the PSC to study and report on these issues. In particular, it prohibits rate increases based on a forecast test year until April 1, 2027 (or until completion of the relevant proceeding), requires the PSC to report results and recommendations by April 1, 2027, and bars reconciliations and cost-sharing mechanisms unless they benefit ratepayers. The Act also limits recovery of supervisor compensation costs to 110% of the PSC Chair’s salary and requires utilities to adopt company-wide policies to impose reasonable limitations on certain expense categories, including entertainment, transportation, and office renovations.

Net Energy Metering and Community Solar. 

Net energy metering has historically compensated community solar generation at retail rather than wholesale rates, creating a strong incentive for smaller projects while prompting concerns that associated costs are borne by other customers. The Act grandfathers projects that are already constructed or that satisfy certain development milestones, but it requires the PSC to develop a successor net energy metering program by July 1, 2027 that is expected to provide reduced benefits for new projects. In addition, the Act expands the overall net-metering capacity cap from 3,000 MW to 6,000 MW and directs the PSC to study automatic community solar enrollment options for low- and moderate-income subscribers.

Transmission Lines – Underground Lines, ATT/GETS, Good Cause Waivers. 

In response to heightened public concern regarding major transmission proposals—including the Piedmont projects, a replacement line associated with the Brandon Shores coal plant, and a proposed underground line in Baltimore—the Act expands the PSC’s oversight of transmission development. Among other changes, it extends PSC authority to underground transmission lines; requires CPCN applicants to demonstrate consideration of advanced transmission technologies and to provide route analyses; and imposes new reporting requirements related to transmission congestion and the use of advanced transmission technologies. The Act also repeals a prior mandatory CPCN waiver applicable to certain construction and requires the PSC to consider specified factors before granting “good cause” waivers. Finally, it strengthens notice and hearing procedures by requiring certified-mail notice to affected property owners upon the filing of a CPCN application; if notice is not provided, any public hearing is invalid and must be reheld, and the PSC retains discretion to require additional hearings.

Large Load Customer Tariffs (Data Centers). 

Legislative debate on the Act focused heavily on rapidly increasing electricity demand associated with data centers. The Act therefore imposes several new requirements and planning obligations for proposed large-load projects. It lowers the threshold for mandatory large-load rate schedules from 100 MW with an 80% load factor to 25 MW with a 60% load factor, and it directs the PSC to consider appropriate cost-allocation approaches for large-load customers. It also requires the PSC to establish a voluntary large-load interruptible interconnection service and to create a registration framework for new or expanded large-load customers, under which data centers disclose specified information to support system planning. In addition, the Act requires applicants to disclose similar projects elsewhere in PJM that could affect the likelihood that the Maryland project will be constructed. The PSC must further develop an incentive program, organized in tiers, to encourage data centers to utilize new “clean” energy; projects meeting 80–100% of peak load with clean energy receive priority for interconnection and grid studies, while projects meeting 100% of peak load may qualify for permitting time certainty and substation funding, with electric companies required to establish corresponding interconnection processes for participating projects. Finally, the Act prohibits construction of data centers of 5 MW or greater within Baltimore City tax increment financing districts.

Residential Solar Permitting. 

To accelerate deployment of rooftop solar and portable “balcony” solar generation, the Act establishes streamlined county and municipal permitting and inspection requirements. It requires meter disconnection and reconnection within five business days, caps local permitting fees at $500, and authorizes the purchase and installation of one portable solar system for residential use (up to 1,200 watts per meter). Although electric company approval is not required for portable systems, customers must provide notice before installation.  Maryland is only the third state to specifically authorize these systems.

Required Notice of Distribution Cost Increases to Ratepayers. 

Responding to concerns that existing PSC notice requirements did not provide adequate advance warning of potential distribution-cost increases, the Act requires investor-owned utilities to notify residential customers of proceedings that may increase distribution costs by more than 3%. Notice may be provided through bills, email, or other communications, and utility bills must include information explaining how customers may comment on, or intervene in, the applicable PSC proceeding. The Act also requires changes to the PSC web page to make key information more accessible.

Retail Electricity Supply. 

In prior sessions, the General Assembly imposed strict conditions on non-utility suppliers selling electricity to residential customers, including limitations intended to prevent above-market pricing in exchange for protections against future price increases. In response, many suppliers exited the Maryland residential market. The Act modestly relaxes these restrictions to encourage suppliers to return, including by authorizing residential contracts with terms of up to 36 months. It further permits pricing above the standard offer service rate when the contract price is locked in for more than one year, subject to specified caps: for 24 to 35-month contracts, up to 105% of the standard offer service rate, and for 36-month contracts, up to 110%.  At least some suppliers have indicated that the changes were too modest to encourage their return to the Maryland marketplace.

Nuclear Energy Procurement – Long-Term Pricing Purchase Obligation. 

Consistent with prior legislative efforts to encourage new nuclear development (including proposed small modular reactors) through ratepayer-funded surcharges, the Act authorizes the PSC to permit recovery of certain cost overruns within defined limits. Specifically, the PSC may approve up to a 15% increase in recoverable costs during construction.

Energy Sites and Zoning/Permitting Study. 

To support additional in-state generation, the Act directs the Power Plant Research Program (PPRP), the Maryland Department of the Environment (MDE), and the Maryland Energy Administration (MEA) to study measures that could streamline energy-development permitting. The study must identify up to 50 priority energy sites, assess bottlenecks and other barriers affecting permitting timelines, and develop recommendations regarding a potential state-level zoning and permitting structure.

David W. Beugelmans
410-576-4104 • dbeugelmans@gfrlaw.com

Michael C. Powell
410-576-4175 • mpowell@gfrlaw.com

Jason F. Weintraub
410-576-4042 • jweintraub@gfrlaw.com