Maryland 2022 Regular Session

Maryland House Bill HB622 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
4	4		[Brackets] indicate matter deleted from existing law.
5		-	Underlining indicates amendments to bill.
6		-	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7		-	amendment.
8	5		hb0622
9	6
10	7		HOUSE BILL 622
11	8		C5, M5 2lr1749
12	9		CF SB 526
13	10		By: Delegate Brooks
14	11		Introduced and read first time: January 31, 2022
15	12		Assigned to: Economic Matters
16		-	Committee Report: Favorable with amendments
17		-	House action: Adopted
18		-	Read second time: March 10, 2022
19	13
20		-	~~CHAPTER ______~~
	14	+	A BILL ENTITLED
21	15
22	16		AN ACT concerning 1
23	17
24		-	Electricity – Offshore Wind Renewable Energy Portfolio Standard and 2
25		-	Renewable Energy Credits – Offshore Wind 3
	18	+	Electricity – Offshore Wind Renewable Energy Credits 2
26	19
27		-	FOR the purpose of altering the process for purchasing offshore wind renewable energy 4
28		-	credits to satisfy the offshore wind energy component of the renewable energy 5
29		-	portfolio standard; requiring the Public Service Commission to adopt regulations 6
30		-	establishing a certain cost recovery mechanism altering the application of the 7
31		-	offshore wind energy component of the renewable energy portfolio standard to apply 8
32		-	only to distribution sales of electric companies; altering the manner in which an 9
33		-	electric company may reflect and recover offshore wind renewable energy credit 10
34		-	costs; altering certain compliance fees for shortfalls from the offshore wind energy 11
35		-	component of the renewable energy portfolio standard; and generally relating to 12
36		-	offshore wind and the renewable energy portfolio standard. 13
	20	+	FOR the purpose of altering the process for purchasing offshore wind renewable energy 3
	21	+	credits to satisfy the offshore wind energy component of the renewable energy 4
	22	+	portfolio standard; requiring the Public Service Commission to adopt regulations 5
	23	+	establishing a certain cost recovery mechanism; and generally relating to offshore 6
	24	+	wind and the renewable energy portfolio standard. 7
37	25
38		-	BY repealing and reenacting, without amendments, 14
39		-	Article – Public Utilities 15
40		-	Section 7–701(a) and (g) 16
41		-	Annotated Code of Maryland 17
42		-	(2020 Replacement Volume and 2021 Supplement) 18
	26	+	BY repealing and reenacting, without amendments, 8
	27	+	Article – Public Utilities 9
	28	+	Section 7–701(a) and (g) 10
	29	+	Annotated Code of Maryland 11
	30	+	(2020 Replacement Volume and 2021 Supplement) 12
43	31
44		-	BY repealing and reenacting, with amendments, 19
	32	+	BY repealing and reenacting, with amendments, 13
	33	+	Article – Public Utilities 14
	34	+	Section 7–704.2(c) 15
	35	+	Annotated Code of Maryland 16
	36	+	(2020 Replacement Volume and 2021 Supplement) 17
	37	+
	38	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
	39	+	That the Laws of Maryland read as follows: 19
	40	+
45	41		Article – Public Utilities 20
46		-	Section 7–704.2(c) 7–703(a)(3) and (d), 7–704.2(a) and (c), and 7–705(b) 21
47		-	Annotated Code of Maryland 22
48		-	(2020 Replacement Volume and 2021 Supplement) 23 2 HOUSE BILL 622
	42	+
	43	+	7–701. 21
	44	+
	45	+	(a) In this subtitle the following words have the meanings indicated. 22
	46	+
	47	+	(g) “Offshore wind renewable energy credit” or “OREC” means a renewable 23
	48	+	energy credit equal to the generation attributes of 1 megawatt–hour of electricity that is 24 2 HOUSE BILL 622
49	49
50	50
	51	+	derived from offshore wind energy. 1
51	52
52		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
53		-	That the Laws of Maryland read as follows: 2
	53	+	7–704.2. 2
54	54
55		-	Article – Public Utilities 3
	55	+	(c) (1) Each [electricity supplier] ELECTRIC COMPANY shall [purchase from 3
	56	+	the escrow account established under this section the number of ORECs required] ACT AS 4
	57	+	AN AGENT ON BEHALF O F ELECTRICITY SUPPLI ERS TO FACILITATE TH E TRANSFER 5
	58	+	OF OREC FUNDING PAYMENTS FRO M RATEPAYERS TO OFFS HORE WIND 6
	59	+	DEVELOPERS to satisfy the offshore wind energy component of the renewable energy 7
	60	+	portfolio standard under § 7–703(b)(12) through (25) of this subtitle. 8
56	61
57		-	7–701. 4
	62	+	(2) (i) Subject to any escrow account reserve requirement the 9
	63	+	Commission establishes, if there are insufficient ORECs available to satisfy the suppliers’ 10
	64	+	OREC obligation, the overpayment shall be distributed to electric companies to be refunded 11
	65	+	or credited to each ratepayer based on the ratepayer’s consumption of electricity supply 12
	66	+	that is subject to the renewable energy portfolio standard. 13
58	67
59		-	(a) In this subtitle the following words have the meanings indicated. 5
	68	+	(ii) Subject to any escrow account reserve requirement the 14
	69	+	Commission establishes, the calculation of an electricity supplier’s OREC purchase 15
	70	+	obligation shall be based on final electricity sales data as reported by the PJM 16
	71	+	Interconnection as measured at the customer meter. 17
60	72
61		-	(g) “Offshore wind renewable energy credit” or “OREC” means a renewable 6
62		-	energy credit equal to the generation attributes of 1 megawatt–hour of electricity that is 7
63		-	derived from offshore wind energy. 8
	73	+	(3) For each OREC for which a qualified offshore wind project receives 18
	74	+	payment, a qualified offshore wind project shall: 19
64	75
65		-	7–703. 9
	76	+	(i) sell all energy, capacity, and ancillary services associated with 20
	77	+	the creation of ORECs into the markets operated by PJM Interconnection; and 21
66	78
67		-	(a) (3) The portion of a renewable energy portfolio standard that represents 10
68		-	offshore wind energy: 11
	79	+	(ii) distribute the proceeds received from the sales to PJM 22
	80	+	Interconnection markets, under item (i) of this paragraph to electric companies to be 23
	81	+	refunded or credited to each ratepayer based on the ratepayer’s consumption of electricity 24
	82	+	supply that is subject to the renewable energy portfolio standard. 25
69	83
70		-	(I) APPLIES ONLY TO THE DISTRIBUTION SALES O F ELECTRIC 12
71		-	COMPANIES; AND 13
	84	+	(4) THE COMMISSION SHALL ADOP T REGULATIONS TO EST ABLISH A 26
	85	+	COST RECOVERY MECHAN ISM THAT ALLOWS EACH ELECTRIC COMPANY TO ACT AS 27
	86	+	AN AGENT ON BEHALF O F ELECTRICITY SUPPLI ERS FOR OREC FUNDING PAYMENTS 28
	87	+	FROM RATEPAYERS . 29
72	88
73		-	(II) may not apply to [electricity sales at retail] DISTRIBUTION 14
74		-	SALES by any [electricity supplier] ELECTRIC COMPANY in excess of: 15
	89	+	[(4)] (5) Notwithstanding § 7–709 of this subtitle, the Commission shall 30
	90	+	adopt regulations regarding the transfer and expiration of ORECs created by a qualified 31
	91	+	offshore wind project in excess of the OREC pricing schedule. 32
75	92
76		-	[(i)] 1. 75,000,000 kilowatt–hours of industrial process load to a 16
77		-	single customer in a year; and 17
78		-
79		-	[(ii)] 2. 3,000 kilowatt–hours of electricity in a month to a 18
80		-	customer who is an owner of agricultural land and files an Internal Revenue Service form 19
81		-	1040, schedule F. 20
82		-
83		-	(d) (1) Subject to subsections (a) and (c) of this section [and in accordance with 21
84		-	§ 7–704.2 of this subtitle], an electricity supplier shall meet the renewable energy portfolio 22
85		-	standard FOR ALL TIER 1 AND TIER 2 RENEWABLE SOURCES EX CEPT OFFSHORE 23
86		-	WIND by accumulating the equivalent amount of renewable energy credits that equal the 24
87		-	percentages required under this section. 25
88		-
89		-	(2) AN ELECTRIC COMPANY S HALL MEET THE RENEWA BLE ENERGY 26
90		-	PORTFOLIO STANDARD F OR OFFSHORE WIND IN ACCORDANCE WITH § 7–704.2 OF 27
91		-	THIS SUBTITLE. 28
92		-
93		-	7–704.2. 29
94		-	HOUSE BILL 622 3
95		-
96		-
97		-	(a) (1) The Commission shall determine the offshore wind energy component 1
98		-	of the renewable energy portfolio standard under § 7–703(b)(12) through (25) of this subtitle 2
99		-	based on the projected annual creation of ORECs by qualified offshore wind projects. 3
100		-
101		-	(2) The Commission shall establish the renewable energy portfolio 4
102		-	standard obligation for ORECs on a forward–looking basis that includes a surplus to 5
103		-	accommodate reasonable forecasting error in estimating overall electricity sales in the 6
104		-	State. 7
105		-
106		-	(3) Any positive adjustment to the renewable energy portfolio standard 8
107		-	shall be on a forward–looking basis and sufficiently in advance to allow [OREC purchasers] 9
108		-	AN ELECTRIC COMPANY to reflect OREC costs [in retail prices offered] AS A 10
109		-	NONBYPASSABLE SURCHA RGE to [consumers] DISTRIBUTION CUSTOME RS. 11
110		-
111		-	(4) The Commission shall adopt regulations that establish: 12
112		-
113		-	(i) the offshore wind purchase obligation sufficiently in advance to 13
114		-	allow [OREC purchasers] AN ELECTRIC COMPANY to reflect OREC costs [in retail prices 14
115		-	offered to consumers] AS A NONBYPASSABLE S URCHARGE PAID BY ALL DISTRIBUTION 15
116		-	CUSTOMERS OF THE ELECT RIC COMPANY ; [and] 16
117		-
118		-	(ii) a mechanism to adjust the renewable energy portfolio standard 17
119		-	obligation in a given year to accommodate a shortfall of ORECs in one or more earlier years 18
120		-	that is the result of the variation between the quantity of ORECs calculated from the 19
121		-	renewable energy portfolio standard obligation and the quantity of ORECs approved in the 20
122		-	Commission order for the same years; AND 21
123		-
124		-	(III) A NONBYPASSABLE SURC HARGE THAT ALLOWS AN 22
125		-	ELECTRIC COMPANY TO RECOVER ALL COSTS AS SOCIATED WITH THE PURCH ASE OF 23
126		-	ORECS FROM ALL DISTRIBUT ION CUSTOMERS OF THE ELECTRIC COMPANY . 24
127		-
128		-	(c) (1) Each [electricity supplier] ELECTRIC COMPANY shall [purchase from 25
129		-	the escrow account established under this section the number of ORECs required] ACT AS 26
130		-	AN AGENT ON BEHALF OF E LECTRICITY SUPPLIERS TO FACILITATE THE TR ANSFER 27
131		-	OF OREC FUNDING PAYMENTS FRO M RATEPAYERS TO OFFS HORE WIND 28
132		-	DEVELOPERS to satisfy the offshore wind energy component of the renewable energy 29
133		-	portfolio standard under § 7–703(b)(12) through (25) of this subtitle. 30
134		-
135		-	(2) (i) Subject to any escrow account reserve requirement the 31
136		-	Commission establishes, if there are insufficient ORECs available to satisfy the suppliers’ 32
137		-	ELECTRIC COMPANIES ’ OREC obligation, the overpayment shall be distributed to electric 33
138		-	companies to be refunded or credited to each ratepayer DISTRIBUTION CUSTOME R based 34
139		-	on the ratepayer’s CUSTOMER’S consumption of electricity supply that is subject to the 35
140		-	renewable energy portfolio standard. 36
141		-	4 HOUSE BILL 622
142		-
143		-
144		-	(ii) Subject to any escrow account reserve requirement the 1
145		-	Commission establishes, the calculation of an electricity supplier’s ELECTRIC COMPANY ’S 2
146		-	OREC purchase obligation shall be based on final electricity sales data as reported by the 3
147		-	PJM Interconnection as measured at the customer meter. 4
148		-
149		-	(3) For each OREC for which a qualified offshore wind project receives 5
150		-	payment, a qualified offshore wind project shall: 6
151		-
152		-	(i) sell all energy, capacity, and ancillary services associated with 7
153		-	the creation of ORECs into the markets operated by PJM Interconnection; and 8
154		-
155		-	(ii) distribute the proceeds received from the sales to PJM 9
156		-	Interconnection markets, under item (i) of this paragraph to electric companies to be 10
157		-	refunded or credited to each ratepayer DISTRIBUTION CUST OMER based on the 11
158		-	ratepayer’s CUSTOMER’S consumption of electricity supply that is subject to the renewable 12
159		-	energy portfolio standard. 13
160		-
161		-	(4) THE COMMISSION SHALL ADOP T REGULATIONS TO EST ABLISH A 14
162		-	COST RECOVERY MECHAN ISM THAT ALLOWS EACH ELECTRIC COMPANY TO ACT AS 15
163		-	AN AGENT ON BEHALF O F ELECTRICITY SUPPLI ERS FOR OREC FUNDING PAYMENTS 16
164		-	FROM RATEPAYERS . 17
165		-
166		-	[(4)] (5) Notwithstanding § 7–709 of this subtitle, the Commission shall 18
167		-	adopt regulations regarding the transfer and expiration of ORECs created by a qualified 19
168		-	offshore wind project in excess of the OREC pricing schedule. 20
169		-
170		-	7–705. 21
171		-
172		-	(b) (1) This subsection does not apply to a shortfall from the required Tier 1 22
173		-	renewable sources that is to be derived from[: 23
174		-
175		-	(i) offshore wind energy; or 24
176		-
177		-	(ii)] post–2022 geothermal systems. 25
178		-
179		-	(2) If an electricity supplier fails to comply with the renewable energy 26
180		-	portfolio standard for the applicable year, the electricity supplier shall pay into the 27
181		-	Maryland Strategic Energy Investment Fund established under § 9–20B–05 of the State 28
182		-	Government Article: 29
183		-
184		-	(i) except as provided in item (ii) of this paragraph, a compliance fee 30
185		-	of: 31
186		-
187		-	1. the following amounts for each kilowatt–hour of shortfall 32
188		-	from required Tier 1 renewable sources other than the shortfall from the required Tier 1 33
189		-	renewable sources that is to be derived from solar energy: 34 HOUSE BILL 622 5
190		-
191		-
192		-
193		-	A. 4 cents through 2016; 1
194		-
195		-	B. 3.75 cents in 2017 and 2018; 2
196		-
197		-	C. 3 cents in 2019 through 2023; 3
198		-
199		-	D. 2.75 cents in 2024; 4
200		-
201		-	E. 2.5 cents in 2025; 5
202		-
203		-	F. 2.475 cents in 2026; 6
204		-
205		-	G. 2.45 cents in 2027; 7
206		-
207		-	H. 2.25 cents in 2028 and 2029; and 8
208		-
209		-	I. 2.235 cents in 2030 and later; 9
210		-
211		-	2. the following amounts for each kilowatt–hour of shortfall 10
212		-	from required Tier 1 renewable sources that is to be derived from solar energy: 11
213		-
214		-	A. 45 cents in 2008; 12
215		-
216		-	B. 40 cents in 2009 through 2014; 13
217		-
218		-	C. 35 cents in 2015 and 2016; 14
219		-
220		-	D. 19.5 cents in 2017; 15
221		-
222		-	E. 17.5 cents in 2018; 16
223		-
224		-	F. 10 cents in 2019; 17
225		-
226		-	G. 10 cents in 2020; 18
227		-
228		-	H. 8 cents in 2021; 19
229		-
230		-	I. 6 cents in 2022; 20
231		-
232		-	J. 6 cents in 2023; 21
233		-
234		-	K. 6 cents in 2024; 22
235		-
236		-	L. 5.5 cents in 2025; 23
237		-
238		-	M. 4.5 cents in 2026; 24 6 HOUSE BILL 622
239		-
240		-
241		-
242		-	N. 3.5 cents in 2027; 1
243		-
244		-	O. 3.25 cents in 2028; 2
245		-
246		-	P. 2.5 cents in 2029; and 3
247		-
248		-	Q. 2.25 cents in 2030 and later; and 4
249		-
250		-	3. 1.5 cents for each kilowatt–hour of shortfall from required 5
251		-	Tier 2 renewable sources; or 6
252		-
253		-	(ii) for industrial process load: 7
254		-
255		-	1. for each kilowatt–hour of shortfall from required Tier 1 8
256		-	renewable sources, a compliance fee of: 9
257		-
258		-	A. 0.8 cents in 2006, 2007, and 2008; 10
259		-
260		-	B. 0.5 cents in 2009 and 2010; 11
261		-
262		-	C. 0.4 cents in 2011 and 2012; 12
263		-
264		-	D. 0.3 cents in 2013 and 2014; 13
265		-
266		-	E. 0.25 cents in 2015 and 2016; and 14
267		-
268		-	F. except as provided in paragraph (3) of this subsection, 0.2 15
269		-	cents in 2017 and later; and 16
270		-
271		-	2. nothing for any shortfall from required Tier 2 renewable 17
272		-	sources. 18
273		-
274		-	(3) For industrial process load, the compliance fee for each kilowatt–hour 19
275		-	of shortfall from required Tier 1 renewable sources is[: 20
276		-
277		-	(i) 0.1 cents in any year during which suppliers are required to 21
278		-	purchase ORECs under § 7–704.2 of this subtitle; and 22
279		-
280		-	(ii)] nothing for the year following any year during which, after final 23
281		-	calculations, the net rate impact per megawatt–hour from Round 1 offshore wind projects 24
282		-	exceeded $1.65 in 2012 dollars. 25
283		-
284		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
285		-	October 1, 2022. 27
286		-
	93	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 33
	94	+	October 1, 2022. 34
287	95