Maryland Senate Fails to Pass Legislation to Strengthen the EmPOWER Maryland Energy Efficiency Program

Coalition disappointed in missed opportunity to benefit consumers and advance state climate goals 

A broad coalition of environmental, faith, consumer and public health groups today expressed disappointment at the Maryland State Senate’s failure to pass legislation needed to update and improve EmPOWER Maryland, the state’s energy efficiency program. The bill would have strengthened consumer protections and ensured the program supports the state’s efforts to reduce fossil fuel pollution. 

The bill (HB1035) would have required specific annual goals for greenhouse gas emissions reductions and codified critical consumer protections to smooth the transition, reduce rate hikes and ensure the program’s focus remains on in-home energy efficiency benefits. Advocates argued that this was the year to pass the program as the utilities are submitting their 3-year planning for the EmPOWER program to the Public Service Commission.  

“We’re disappointed that the Senate did not act this year to strengthen Maryland’s energy efficiency program to reduce energy use and pollution to help save ratepayer money,” said Emily Scarr, Director of Maryland PIRG. “Unfortunately, ratepayers are going to have to wait at least another year for these added benefits and protections.”

The legislation would have:

• Required yearly goals for greenhouse gas reduction and enabled incentives for home electrification.

• Protected consumers from dramatic rate increases and set up performance standards for utilities.
• Added protections to ensure the program delivers direct benefits to ratepayers to improve home energy efficiency by setting an 80% behind the meter goal.
• Set performance targets to ensure low-income homeowners aren’t left behind when it comes to energy savings. 

EmPOWER has delivered important benefits to Marylanders since it was created in 2008. It has saved ratepayers more than $4 billion on energy bills and reduced Maryland’s greenhouse gas emissions by the equivalent of 9.6 million metric tons of carbon dioxide – the equivalent of moving 2 million cars off the road. 

“We are disappointed. This is a huge missed opportunity. A large and diverse coalition came together to support this legislation, and we thank the members of the General Assembly who supported the bill,” said Josh Tulkin, Director of Sierra Club Maryland. “This bill would have generated important benefits by using EmPOWER to help us meet our state’s critical climate goals while benefiting Marylanders by bringing down their energy usage and bills.” 

One key issue that came up in debate on the bill on the House floor and Senate Education, Energy and Environment Committee is the financing of the program.  The PSC had allowed the utilities to finance the costs of the program and recover costs, with interest, from ratepayers under an amortization plan (in which payment for a cost is spread over 5 years). This is a financing design for energy efficiency shared by only a handful of other states. While overall the program has been a smart investment for ratepayers, providing over $4 billion in direct savings on utility bills, consumer advocates have criticized the program’s current funding mechanism. Maryland PIRG Foundation’s 2023 report, Energy Efficiency for Everyone: How to supercharge EmPOWER Maryland, found that the financing structure was creating significantly larger profits to Maryland utilities than in other top states for energy efficiency, and is costing Maryland ratepayers $55 million a year with no benefit.

By 2020, the utilities had accumulated over $822 million in unamortized program expenses, costs that Maryland ratepayers will have to repay. 

In December, the Public Service Commission (PSC) issued an order to pay down the amortized balance and shift to an annual financing model so costs will be limited to what they approve and ratepayers won’t take on additional long term costs. HB1035 would have  extended the payback period ordered by the PSC by two years and lowered the interest rate to lessen the ratepayer impacts.

“This legislation would have helped people choose healthier, more efficient home heating and cooking options, protect our climate, and take advantage of billions of dollars in new federal funds,” said Jonathan Lacock-Nisly, Director of Faithful Advocacy for Interfaith Power & Light (DC.MD.NoVA). “That’s why so many people of faith all across Maryland spoke out in support of this bill and in support of strengthening the EmPOWER Maryland program.”

The coalition applauded the legislators who led in the effort to pass the bill and incorporate provisions from HB904 and HB169, including House Economic Matters Vice Chair Brian Crosby, Chair C.T. Wilson, Del. Lily Qi, and Del. Lorig Charkoudian. 

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