Maryland Passes Energy Bill That Delivers Short-Term Relief, Locks Ratepayers into Long-Term Nuclear Subsidy

Maryland lawmakers’ new solution for rising utility bills reduces a surcharge funding an effective energy-efficiency program, offers rebates by raiding the state’s clean energy fund and includes subsidies for nuclear power that advocates say may prove costly over time.

Passed in the final minutes of this year’s session, the Utility RELIEF Act also puts a one-year moratorium on forecasted ratemaking, in which utilities charge customers based on projected infrastructure investments rather than actual spending. 

The federal government loomed large over the session. The Trump administration is rolling back regulatory protections from industrial pollution and attacking clean energy projects such as offshore wind, which states like Maryland were banking on to meet emission-reduction goals. Gov. Wes Moore was under pressure to both patch a gaping budgetary hole fueled in part by huge federal layoffs and to assist ratepayers, who are reeling from high energy prices driven by data center growth. 

Moore has until May 13 to sign or veto the bill. But early in the session, the governor, along with Democratic leaders in the House and Senate, presented the energy legislation as the best way forward. They say it will lead to more energy generation in the state, increase utility oversight and save Maryland families at least $150 on their energy bills every year.

Faced with a $1.5 billion budget shortfall, the Moore administration drained more than $700 million from the state’s dedicated clean energy fund, the Strategic Energy Investment Fund, to plug some of those holes and fund $100 million in utility rebates. As Inside Climate News reported previously, it was the second consecutive year the administration raided SEIF for budget backfilling. Environmental advocates had pushed for legislation this session to prevent additional raids, but their efforts proved unsuccessful.

The administration and political leadership also faced stiff resistance from advocates on scaling back the state’s flagship energy efficiency program, EmPOWER Maryland. The final bill cut EmPOWER’s annual energy savings target from 2.5 percent to 1.75 percent of kilowatt-hour sales beginning in 2027, then gradually ramping it back to its full target by 2036, a nine-year delay. The program helps residents and businesses conserve energy and lower their bills through weatherization improvements, rebates on efficient appliances and free energy audits.

The cuts will reduce the monthly surcharge customers pay to fund the program, which lawmakers believe will produce most of the bill’s promised $150 in annual savings. But consumer advocates think trimming the program also shrinks the efficiency benefits it delivers. 

The bill offers only temporary relief, according to environmental leaders, while quietly committing Maryland electricity customers to nuclear subsidies without independent cost estimates or public accounting of what they will pay over the long-term. The advocates cautioned that cost impacts from the nuclear subsidies have not been modeled by any state agency and were not debated by lawmakers.

Josh Tulkin, director of the Sierra Club’s Maryland chapter, said the session’s outcome was better understood as a damage-limitation exercise than a ratepayer victory. He was critical of the two consecutive years of SEIF drawdowns the Moore administration presented as ratepayer relief. “One time is a fluke, two times is a pattern,” he said, “and nothing happened this year to prevent it in the future.”

Kim Coble, executive director of the Maryland League of Conservation Voters, said the session’s outcome had to be measured against what advocates were defending against, not what they had hoped to gain. She said some proposals early in the session would have eliminated EmPOWER entirely or cut it more dramatically. 

“We retain the program, we retain the structure, we retain the implementation of EmPOWER,” she said. “That in the end felt much better than losing the whole program.” 

Once the House bill moved to the Senate, utility accountability became a thorny issue that divided the Democratic leadership, and the differences persisted late into the final day of the session. 

One of the most contentious and consequential issues was forecasted ratemaking. A recent analysis by the Maryland Office of People’s Counsel found that forecasted ratemaking led to annual bill increases of $164 for Baltimore Gas and Electric (BGE) customers and $323 for Potomac Electric Power Co. (Pepco) customers compared to traditional ratemaking, in which utilities must present documented receipts before passing on the costs.

While the House bill barred forecasted ratemaking, the Senate restored it. The final bill imposed a one-year moratorium, which bars utilities from seeking rate increases based on projected spending. The bill requires the Maryland Public Service Commission to study which of the two ratemaking practices better serves the ratepayers and present its findings to the General Assembly. 

David Lapp, who represents the interests of ratepayers as Maryland’s people’s counsel, said in an interview that the provision should have immediate practical impact. He said the moratorium should directly affect Pepco’s current pending rate case, in which it has asked for a rate increase based on projected rather than actual spending. 

“We hope that means a scaling back of Pepco’s current effort in their current rate case,” he said. 

Still, Lapp was direct about the limits of the legislature’s move. “We keep having to fight this battle over and over. We wanted legislation to prohibit them permanently. The legislature did not go that far.” 

Tulkin, who said the PSC’s eventual findings were outside his wheelhouse, took a glass-half-full view. “In the world of legislative work, pushing something bad off for a year is a victory,” he said. “There’s a lot of things that can change in a year.”

Nuclear Incentives

The bill’s provisions dealing with nuclear generation moved quietly through the session’s final weeks without public debate or modeling of their potential long‑term cost to ratepayers, advocates told Inside Climate News.

The final bill creates a nonbypassable surcharge on every ratepayer’s distribution bill to fund approved nuclear projects, according to the bill language, and allows the PSC to approve cost overruns of up to 15 percent before a plant begins operating. Advocates said the bill also broadens the definition of zero‑emission credits in ways that could make them more lucrative for nuclear developers and more expensive for ratepayers. 

Lapp’s office opposed the cost-overrun provision, and he remains concerned. “Ratepayers shouldn’t be taking on cost risk for unproven technology,” he said. No small modular reactors are in commercial operation yet in the U.S., he said, but subsidies like this one could make them appealing in Maryland.

One scenario he fears is now more likely in Maryland is what happened to the Vogtle nuclear plant in Georgia, which roughly doubled its original cost estimate. “What we see is, with the story of the Vogtle plant in Georgia, is that they just grow as time goes on,” he said.

Coble said she had not known the nuclear provisions were in the bill until after it passed. “It’s hard to assess, it’s hard to understand the impacts, it’s hard to understand if it was a good decision when there was no public discussion on it,” she said. “I don’t even know where it came from.” 

She framed the nuclear subsidies as the clearest example of what the practice of omnibus legislation produces: Consequential policies bundled up without proper scrutiny. “Nuclear energy could be a really good source of energy for Maryland,” Coble said, “but it needs to be done with transparency, with assurances, with the impact on ratepayers being fully considered.”

Jorge Aguilar, southern regional director of Food and Water Watch, said the nuclear provisions have shifted over the last two legislative sessions. 

“Gov. Moore has really moved away from building the green economy to building out the AI data center economy. That is what he is doubling down on,” Aguilar said. He pointed out that the bill’s Bring Your Own Clean Energy framework, which allows data centers paired with emissions-free energy sources to jump the grid interconnection queue, created a direct financial incentive linking data center developers to nuclear projects. “What we’re hearing legislators talk about is the buildout of new gas and nuclear.” 

Aguilar pointed to a proposed AI data center in Calvert County as an early example of the subsidy architecture in motion, and raised the cost question no official had answered. “Even if it never gets built, there will be a cost, and that cost is borne by someone,” he said. “How will this lower energy bills if they’re going to add distribution costs in the long run onto ratepayers? Nuclear energy development is extremely expensive, and cost overruns are not just within 15 percent. Examples suggest it could be double.”

Observers also criticized the way the bill came together. 

“The legislative process being that of sausage making comes to mind,” Coble said bluntly. “We watched it be made without really having much influence over it. And I think that’s both frustrating and exhausting.” 

Tulkin said the two-year run of omnibus energy bills had forced his organization to reconsider its legislative strategy entirely. “If the legislature is going to continue to do these omnibus energy bills, we simply cannot effectively participate in the legislative process in that way,” he said, adding that the Sierra Club was evaluating whether testifying on a dozen separate bills only to have them compressed into one was a worthwhile use of its resources.

“The state cannot claim it’s a climate champion while cutting climate programs and climate funding,” he added. “The governor, the state, the General Assembly made it clear this session that climate was not a top priority, and we are falling behind our goals.”