Maryland House votes to update and improve EmPOWER Maryland

The Maryland House of Delegates has voted to pass HB1035, an update to the EmPOWER Maryland energy efficiency program, with additional ratepayer protections.

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Today, the Maryland House of Delegates voted to pass HB1035, an update to the EmPOWER Maryland energy efficiency program. As amended by the House Economic Matters Committee, the bill adjusts the program to include goals for reductions of harmful climate emissions and additional consumer protections to ensure the shift does not undermine the program’s history of providing savings and in-home energy efficiency directly to consumers. The bill now heads to the Senate. It needs final approval before the end of Monday, April 10th.

One key issue that has come up in debate on the bill (see below) 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 time). 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. Short term, the order will lead to rate increases to address the existing expenses, but the Office of People’s Counsel agreed that it was in the best interest of ratepayers.

HB1035 includes several key provisions that will further protect ratepayers by reducing the rate impacts of the PSC order and enacting guardrails on the program. These include:

  • Directing the PSC to establish performance standards so utility profits are tied to performance so that they can receive reasonable compensation for meeting or exceeding goals and can be penalized for failing to meet goals.
  • Extending the payback period for the amortized balance and lowering the interest rate on the balance to lower monthly rate increases.
  • Ensuring 80% of the utilities goals for energy efficiency are met through in-home energy efficiency improvements that directly benefit ratepayers.

2024 marks the start of a new 3-year cycle for EmPOWER Maryland. Join us and urge the State Senate to move the bill as quickly as possible.


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