New report: How to supercharge EmPOWER Maryland

BALTIMORE — EmPOWER Maryland, the state’s energy efficiency program, has saved Marylanders a lot of energy and money. But according to a new report from Maryland PIRG Foundation, EmPOWER Maryland, while successful, could spark more energy savings, deliver more for low-income customers, and more adequately support the state’s climate goals.Since 2008, the EmPOWER Maryland program has provided Marylanders with energy audits and weatherization, rebates for appliances, and discounts and incentives for businesses to upgrade their energy efficiency. According to the report, “Energy Efficiency for Everyone: How to Supercharge EmPOWER Maryland,” the program met its goal to reduce electricity consumption to 15% below 2007 levels by 2015 and met its goal of reducing energy use by 2% every year since 2017. Already, the program has saved ratepayers more than $4 billion on their energy bills and delivered lifetime energy savings expected to be worth $12.7 billion. EmPOWER has reduced pollution and our dependence on fossil fuels, lessening climate pollution by more than 9.6 metric tons – equivalent to taking 2 million cars off the road for a year.

“Investing in energy efficiency is one of the smartest investments Maryland has ever made,” said Maryland PIRG Director Emily Scarr. “But we can work even smarter. We need to keep doing what’s working and update incentives to save more and pollute less.”

The report’s findings include: 

• Maryland utilities are leaving energy savings on the table: In 2021, Maryland’s utilities spent less than the allotted budget on almost every energy efficiency program – in some cases less than half of the allotted budget. Significant underspending on important programs indicates there is ample room for more benefits and savings from the programs.

• Current EmPOWER incentives undermine Maryland’s climate protection goals: EmPOWER fails to adequately incentivize and prioritize efforts that would benefit both the climate and efficiency, such as replacing fossil fuel appliances and building systems with all-electric alternatives. Meanwhile, EmPOWER continues to offer incentives for fossil fuel-powered appliances including furnaces and water heaters, which will lead to more climate and air pollution.

• EmPOWER’s programs targeted at limited income consumers deliver limited savings:
  • While limited-income households represent at least 26.5% of households statewide, only 17.5% of residential spending under EmPOWER is allocated for them.
  • Neither the Maryland General Assembly nor the regulators in charge of EmPOWER have set binding goals for the limited-income programs. The state Department of Housing and Community Development achieved just 9% of its own energy savings target for limited-income multifamily residences in 2021 and only 70% of its target for single-family homes.

• With better design, EmPOWER could deliver greater energy savings for everyone.
  • Utilities are neither incentivized to meet efficiency goals nor penalized for failing to meet those goals. Creating such a “performance-based” mechanism could help drive longer-lasting saving for customers.
  • EmPOWER financing was designed such that utilities pay for the program, ratepayers repay a portion of those expenses each year, and the unpaid expenses accumulate with interest – a financing design shared by just a handful of other states’ energy efficiency programs. The utilities have been earning a very high return on EmPOWER investments – about 16% to 20% of annual costs – and will continue to do so until 2024, when a recent ruling by the Public Service Commission will take effect.

“Maryland utilities should be supporting, not standing in the way of Maryland families’ transition to clean and efficient electric energy that will ensure a healthier, safer and cleaner future for all of us,” said Maryland Sierra Club Director Josh Tulkin. “Now is the time to update EmPOWER incentives to stop subsidies for fossil fuel heating and appliances and start helping Maryland families electrify their homes.” 

Previous Maryland PIRG Foundation reports on EmPOWER Maryland.

• Stepping up to Bigger Savings: How Maryland Utilities Can Save More Energy by Adopting the Nation’s Most Ambitious Energy Efficiency Programs, 2013.
• A Smart Solution: EmPOWER is Saving Energy, Saving Money, and Boosting Our Economy, 2011.
• Falling Behind on Energy Efficiency: Maryland Risks Missing Its Electricity Savings Goals, 2011.
• Utility Work Ahead: A First Look At Progress Toward Meeting EmPOWER Maryland Goals, 2010.
• Energy Saved, Dollars Earned: Real-World Examples of How Energy Efficiency Can Benefit Maryland Consumers, 2008.

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Maryland PIRG Foundation works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer meaningful opportunities for civic participation.