EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb1112*
HOUSE BILL 1112
C5 4lr2475
By: Delegate Charkoudian
Introduced and read first time: February 7, 2024
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 8, 2024
CHAPTER ______
AN ACT concerning 1
Public Service Commission – Energy Storage Devices – Acquisition and 2
Deployment 3
FOR the purpose of establishing that a person that applies for a certificate of public 4
convenience and necessity in response to a certain order is eligible for an expedited 5
review process of the application; requiring the Public Service Commission to give 6
priority to the review of and final action on certain applications for a certificate of 7
public convenience and necessity; requiring the Public Service Commission to 8
determine whether the deployment of energy storage devices could help to avoid or 9
limit a reliability–must–run agreement with an energy generating system or facility 10
in the State under certain circumstances; requiring the Commission to facilitate the 11
acquisition of issue an order directing certain investor–owned electric companies to 12
construct, acquire, lease, or contract for energy storage devices under certain 13
circumstances; subjecting certain contracts entered into under this Act to a certain 14
project labor agreement; authorizing an investor–owned electric company to operate 15
an energy storage device in wholesale markets or other applications under certain 16
circumstances; and generally relating to the acquisition and deployment of energy 17
storage devices. 18
BY adding to 19
Article – Public Utilities 20
Section 7–207(i) and 7–216.2 21
Annotated Code of Maryland 22
(2020 Replacement Volume and 2023 Supplement) 23
2 HOUSE BILL 1112
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Public Utilities 3
7–207. 4
(I) (1) IF A PERSON IS REQUIR ED TO SUBMIT AN APPL ICATION FOR A 5
CERTIFICATE OF PUBLI C CONVENIENCE AND NE CESSITY IN RESPONSE TO AN ORDER 6
ISSUED UNDER § 7–216.2(C)(2)(I) OF THIS SUBTITLE : 7
(I) THE PERSON IS ELIGIB LE FOR AN EXPEDITED REVIEW 8
PROCESS OF THE APPLI CATION FOR THE CERTIFIC ATE OF PUBLIC CONVEN IENCE 9
AND NECESSITY REQUIR ED UNDER THIS SECTIO N; AND 10
(II) THE COMMISSION SHALL GIVE PRIORITY TO THE REVI EW OF 11
AND FINAL ACTION ON THE APPLICATION OVER OTHER CERTIFICATE OF PUBLIC 12
CONVENIENCE AND NECE SSITY APPLICATIONS THAT ARE BEFOR E THE COMMISSION 13
FOR REVIEW AND FINAL ACTION. 14
(2) ON OR BEFORE DECEMBER 1, 2024, THE COMMISSION SHALL 15
ADOPT REGULATIONS OR ISSUE ORDERS ESTABLI SHING AN EXPEDITED R EVIEW 16
PROCESS FOR APPLICAT IONS FOR A CERTIFICA TE OF PUBLIC CONVENI ENCE AND 17
NECESSITY SUBMITTED UNDER THIS SUBSECTIO N. 18
7–216.2. 19
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 20
INDICATED. 21
(2) “ENERGY STORAGE DEVICE ” HAS THE MEANING STAT ED IN § 22
7–216 OF THIS SUBTITLE MEANS RESOURCES CAPA BLE OF: 23
(I) ABSORBING ELECTRICAL ENERGY; 24
(II) STORING ELECTRICAL E NERGY FOR A PERIOD O F TIME; AND 25
(III) DELIVERING ELECTRICA L ENERGY FOR USE AT A LATER 26
TIME. 27
(3) (3) “ENERGY GENERATING SYS TEM” MEANS A SYSTEM OR 28
FACILITY THAT GENERA TES ELECTRICITY IN T HE STATE AND SELLS THE 29
ELECTRICITY INTO THE REGIONAL MARKET . 30
HOUSE BILL 1112 3
(4) “RELIABILITY–MUST–RUN AGREEMENT ” MEANS A CONTRACTUAL 1
AGREEMENT OR ARRANGE MENT AN AGREEMENT APPROVE D BY THE FEDERAL 2
ENERGY REGULATORY COMMISSION THAT IS INTENDED TO KEEP AN ENERGY 3
GENERATING SYSTEM OR FACILITY OPERATING PAST ITS P LANNED RETIREMENT 4
DATE TO MEET REGIONAL RELIABILITY CRITERIA ESTABLISHED BY PJM 5
INTERCONNECTION , LLC. 6
(B) (1) THE COMMISSION SHALL DETE RMINE, IN ACCORDANCE WITH 7
PARAGRAPH (2) PARAGRAPHS (2), (3), AND (4) OF THIS SUBSECTION , WHETHER THE 8
DEPLOYMENT OF ONE OR MORE ENERGY STORAGE DEVIC ES: 9
(I) COULD HELP TO AVOID OR LIMIT A RELIABILI TY–MUST–RUN 10
AGREEMENT WITH AN EN ERGY GENERATING SYST EM OR FACILITY IN THE STATE; 11
(II) COULD PREVENT ADDED COSTS TO RATEPAYERS ; AND 12
(III) IS IN THE PUBLIC INT EREST. 13
(2) THE COMMISSION SHALL MAKE A DETERMINATION UNDE R 14
PARAGRAPH (1) OF THIS SUBSECTION ANY TIME: 15
(I) THE OFFICE OF PEOPLE’S COUNSEL, THE MARYLAND 16
ENERGY ADMINISTRATION , AN INVESTOR –OWNED ELECTRIC COMPA NY, OR ANY 17
OTHER PARTY SUBMITS A NOTICE TO THE COMMISSION PROVIDING EVIDENCE THAT 18
AN ENERGY GENERATING SYSTEM IS LIKELY TO BE DEACTIVATED AND M AY 19
NEGATIVELY IMPACT SY STEM RELIABILITY ; OR 20
(II) ANY TIME THAT PJM INTERCONNECTION , LLC RECEIVES, 21
IN RESPONSE TO A DEACTIVATION NOTIC E REGARDING AN ENERG Y GENERATING 22
SYSTEM OR FACILITY WITHIN THE STATE; OR 23
(II) WITHIN 3 YEARS OF AN EXPECTED RECEIPT OF A 24
DEACTIVATION NOTICE REGARDING AN ENERGY GENERATING SY STEM OR FACILITY 25
WITHIN THE STATE, DETERMINES THAT DEAC TIVATION OF THE ENER GY 26
GENERATING SYSTEM WO ULD NEGATIVELY IMPAC T SYSTEM RELIABILITY . 27
(3) (I) BEFORE MAKING A DETER MINATION UNDER PARAG RAPH 28
(1) OF THIS SUBSECT ION, THE COMMISSION SHALL : 29
1. REQUEST THAT PJM INTERCONNECTION , LLC 30
PROVIDE THE INFORMAT ION SPECIFIED UNDER SUBPARAGRAPH (II) OF THIS 31
PARAGRAPH TO THE COMMISSION IN A TIMEL Y MANNER; AND 32
4 HOUSE BILL 1112
2. REQUIRE THAT EACH IN VESTOR–OWNED ELECTRIC 1
COMPANY PROVIDE THE INFORMATION SPEC IFIED UNDER SUBPARAG RAPH (II) OF 2
THIS PARAGRAPH TO TH E COMMISSION IN A TIMEL Y MANNER. 3
(II) IN MAKING A DETERMINA TION UNDER PARAGRAPH (1) OF 4
THIS SUBSECTION , THE COMMISSION MAY USE AN Y OF THE FOLLOWING 5
INFORMATION PROVIDED BY PJM INTERCONNECTION , LLC OR AN 6
INVESTOR–OWNED ELECTRIC COMPA NY: 7
1. RELEVANT ANALYSES AN D ASSESSMENTS RELATE D 8
TO A POTENTIAL RELIA BILITY–MUST–RUN AGREEMENT ; 9
2. ECONOMIC PROJECTIONS , INCLUDING PROJECTION S 10
RELATED TO TRANSMISS ION AND DISTRIBUTION SYSTEM PLANNING; 11
3. RELIABILITY–MUST–RUN AGREEMENT COSTS AND 12
FUTURE WHOLESALE ELE CTRICITY COSTS AND R EVENUE; AND 13
4. INPUT FROM STATE AGENCIES AND OT HER 14
STAKEHOLDERS OR CONS ULTANTS WITH RELEVAN T TECHNICAL AND ECON OMIC 15
EXPERTISE. 16
(4) IN MAKING A DETERMINATION UNDER PARAGRAPH (1) OF THIS 17
SUBSECTION, THE COMMISSION SHALL CONS IDER: 18
(I) THE COST –EFFECTIVENESS OF DEP LOYING ENERGY 19
STORAGE DEVICES COMP ARED TO ALLOWING A R ELIABILITY–MUST–RUN 20
AGREEMENT TO PROCEED , INCLUDING WHETHER TH E POTENTIAL AVOIDE D COSTS 21
TO RATEPAYERS JUSTIF IES THE DEPLOYMENT O F ENERGY STORAGE DEV ICES; 22
(II) THE LEAD TIME REQUIR ED TO PROCURE THE NE CESSARY 23
MATERIALS, COMPONENTS , EQUIPMENT, AND LABOR TO DEPLOY THE APPROPRIATE 24
ENERGY STORAGE DEVIC ES; 25
(III) THE PERMITS AND OTHE R FEDERAL, STATE, OR LOCAL 26
AUTHORIZATIONS NECES SARY TO DEPLOY THE A PPROPRIATE ENERGY ST ORAGE 27
DEVICES; 28
(IV) OPERATIONAL DETAILS , CONSTRUCTION TIMELIN ES, AND 29
OTHER RELEVANT DETAI LS OF PROJECTS PJM INTERCONNECTION , LLC 30
APPROVES TO ENSURE R ELIABILITY FOLLOW ING THE RETIREMENT O F AN ENERGY 31
GENERATING SYSTEM ; AND 32
HOUSE BILL 1112 5
(V) ANY OTHER FACTORS TH E COMMISSION CONSIDERS 1
RELEVANT TO ITS DETE RMINATION. 2
(C) (1) IF THE COMMISSION DETERMINES THAT THE USE OF AN ONE OR 3
MORE ENERGY STORAGE DEVICE IS A COST –EFFECTIVE SOLUTI ON OR PART OF A 4
COST–EFFECTIVE SOLUTION TO DEVICES, ALONE OR AS A PART O F A 5
COMPREHENSIVE PACKAG E, WILL AVOID OR LIMIT A REL IABILITY–MUST–RUN 6
AGREEMENT AND IS IN THE PUBLIC INTEREST, THE COMMISSION SHALL : 7
(I) FACILITATE THE ACQUI SITION OF THE ENERGY STORAGE 8
DEVICES, INCLUDING REQUIRING AN INVESTOR–OWNED ELECTRIC COMPA NY TO 9
CONSTRUCT , ACQUIRE, LEASE, OR CONTRACT FOR AN E NERGY STORAGE FACILI TY; 10
(II) COORDINATE WITH PJM INTERCONNECTION , LLC TO 11
IMPLEMENT THE OTHER PARTS OF THE COST –EFFECTIVE SOLUTION ; AND 12
(III) DETERMINE THE APPROP RIATE AMOUNT OF COST 13
RECOVERY FROM CUSTOM ERS IN THE STATE NOTIFY PJM INTERCONNECTION , LLC 14
OF THE DETERMINATION ; AND 15
(II) REQUEST THAT PJM INTERCONNECTION , LLC PROVIDE 16
WRITTEN CONFIRMATION TO THE COMMISSION REGARDING WHETHER PJM 17
INTERCONNECTION , LLC IS: 18
1. LIKELY TO DIRECT OR AUTHORIZE THE 19
INTERCONNECTION OF A TRANSMISSION PROJECT RELATED TO THIS 20
DETERMINATION , INCLUDING THE CONSTR UCTION OF OR FACILIT ATING THE 21
CONSTRUCTION OF ANY NECESSARY ENERGY STO RAGE DEVICES ON THE 22
TRANSMISSION SYSTEM ; AND 23
2. UNLIKELY TO SEEK A R ELIABILITY–MUST–RUN 24
AGREEMENT FOR ANY PE RIOD OF TIME THAT TH E PROPOSED ENERGY ST ORAGE 25
DEVICE, ALONE OR AS A PART O F A COMPREHENSIVE PA CKAGE, WILL ADDRESS 26
RELIABILITY NEED . 27
(2) ON RECEIPT OF WRITTEN CONFIRMATION FROM PJM 28
INTERCONNECTION , LLC UNDER PARAGRAPH (1)(II) OF THIS SUBSECTION , THE 29
COMMISSION SHALL : 30
(I) ISSUE AN ORDER DIREC TING AN INVESTOR –OWNED 31
ELECTRIC COMPANY TO CONSTRUCT, ACQUIRE, LEASE, OR CONTRACT FOR ONE OR 32
MORE ENERGY STORAG E DEVICES OF A SIZE AND SCOPE THAT WOULD , ALONE OR AS 33
A PART OF A COMPREHE NSIVE PACKAGE , SATISFY THE RELIABIL ITY NEED 34 6 HOUSE BILL 1112
IDENTIFIED OR CONFIR MED BY PJM INTERCONNECTION , LLC THAT WOULD HAVE 1
OTHERWISE BEEN SATIS FIED BY A RELIABILIT Y–MUST–RUN AGREEMENT ; 2
(II) ENGAGE IN PERIODIC C OMMUNICATION AND 3
COORDINATION WITH PJM INTERCONNECTION , LLC REGARDING THE TIMELY 4
IMPLEMENTATION OF TH E CONSTRUCTION AND O PERATION OF TRANSMIS SION 5
SYSTEM COMPONENTS NE CESSARY TO SUPPORT , IN A COST–EFFECTIVE MANNER , 6
THE DETERMINATION MA DE UNDER PARAGRAPH (1) OF THIS SUBSECTION ; AND 7
(III) SUBJECT TO SUBSECTIO N (D) OF THIS SECTION, AUTHORIZE 8
AN INVESTOR –OWNED ELECTRIC COMPA NY TO RECOVER ANY VE RIFIABLE AND 9
PRUDENTLY INCURRED C OSTS ASSOCIATED WITH IMPLEMENTING THE 10
REQUIREMENTS OF THIS SECTION. 11
(2) (3) IN FACILITATING THE ACQ UISITION OF ENERGY S TORAGE 12
DEVICES ISSUING AN ORDER UNDER PARAGRAPH (1)(I) (2)(I) OF THIS SUBSECTION , 13
THE COMMISSION SHALL CONSIDER THE MOST CO ST–EFFECTIVE OPTION OF THE 14
FOLLOWING MODELS DETERMINE WHICH OF T HE FOLLOWING MODELS BES T SERVES 15
THE PUBLIC INTEREST : 16
(I) A “UTILITY–ONLY” MODEL UNDER WHICH TH E ELECTRIC 17
COMPANY WOULD OWN TH E PROJECT, CONTROL THE PROJECT FOR ELECTRIC 18
TRANSMISSION OR DISTRIBUTION SYSTEM RELIABILITY, AND, IF APPROPRIATE , 19
OPERATE THE PROJ ECT IN WHOLESALE MARKETS OR FOR OTHER APPLICATIONS 20
WHEN NOT PROVIDING E LECTRIC TRANSMISSION OR DISTRIBUTION SYSTEM 21
SERVICES; 22
(II) A “THIRD–PARTY OWNERSHIP ” MODEL UNDER WHICH THE 23
AN INVESTOR–OWNED ELECTRIC COMPANY WOU LD: 24
1. CONTRACT WITH A THIR D PARTY FOR A PROJECT 25
THAT IS OWNED BY THE THIRD PARTY AND THAT PROVIDES ELECTRIC 26
TRANSMISSION OR DISTRIBUTION SYSTEM RELIABILITY; AND 27
2. IF APPROPRIATE , ALLOW THE THIRD PART Y TO 28
OPERATE THE PROJECT IN WHOLESALE MARKETS OR FOR OTHER APPLICA TIONS 29
WHEN THE PROJECT IS NOT PROVIDING ELECTR IC TRANSMISSION OR DISTRIBUTION 30
SYSTEM SERVICES ; OR 31
(III) ANY OTHER OPTIONS OR COMBINATION OF OPTIO NS THAT 32
THE COMMISSION DETERMINES IS BENE FICIAL TO ELECTRICIT Y CUSTOMERS . 33
(3) (4) EACH CONTRACT ENTERED INTO UNDER THIS SUBS ECTION 34
FOR THE CONSTRUCTION OF ENERGY STORAGE DE VICES OR FACILITIES SHALL BE 35 HOUSE BILL 1112 7
SUBJECT TO A PROJECT LABOR AGREEMENT THAT REQUIRES REQUIRE ALL 1
CONTRACTOR S AND SUBCONTRACTORS ON A CONTRACT TO : 2
(I) PAY THE PREVAILING W AGE AS DETERMINED BY THE 3
MARYLAND DEPARTMENT OF LABOR; AND 4
(II) HIRE REGISTERED APPR ENTICES TO PERFORM A T LEAST 5
12.5% OF THE TOTAL WORK HO URS REQUIRED FOR THE CONSTRUCTION OF THE 6
BATTERY STORAGE DEVI CE OR FACILITY. 7
(D) (1) IF THE COMMISSION ISSUES AN ORDER DIRECTING AN 8
INVESTOR–OWNED ELECTRIC COMPA NY TO DEPLOY ONE OR MORE ENERGY 9
STORAGE DEVICES TO S UPPORT THE TRANSMISS ION SYSTEM IN ACCORD ANCE WITH 10
SUBSECTION (C) OF THIS SECTION , THE INVESTOR –OWNED ELECTRIC COMPA NY 11
SHALL SEEK RECOVERY OF THE COSTS TO DEPL OY THE ENERGY STO RAGE DEVICES: 12
(I) AS A TRANSMISSION AS SET WITH THE FEDERAL ENERGY 13
REGULATORY COMMISSION; AND 14
(II) IN A MANNER REASONAB LY ANTICIPATED TO MA XIMIZE THE 15
VALUE FOR CUSTOMERS OF THE INVESTOR –OWNED ELECTRIC COMPA NY. 16
(2) (I) SUBJECT TO APPROVAL B Y THE COMMISSION, AN 17
INVESTOR–OWNED ELECTRIC COMPA NY MAY RECOVER IN IT S DISTRIBUTION RATES 18
ANY PRUDENTLY INCURR ED COSTS TO DEPLOY O NE OR MORE ENERGY ST ORAGE 19
DEVICES THAT WERE NO T APPROVED FOR COST RECOVERY BY THE FEDERAL 20
ENERGY REGULATORY COMMISSION. 21
(II) AN INVESTOR –OWNED ELECTRIC COMPA NY THAT 22
RECOVERS THE COST OF DEPLOYING ONE OR MOR E ENERGY STORAGE DEV ICES IN 23
ITS DISTRIBUTION RAT ES SHALL OPERATE THE DEVICE IN A WAY THAT MAXIMIZES 24
THE VALUE OF THE DEV ICE FOR THE CUSTOMER S OF THE INVESTOR –OWNED 25
ELECTRIC COM PANY. 26
(3) AN INVESTOR–OWNED ELECTRIC COMPA NY THAT IS ORDERED T O 27
DEPLOY ONE OR MORE E NERGY STORAGE DEVICE S UNDER THIS SECTION IS 28
ENTITLED TO SEEK REC OVERY OF ITS VERIFIA BLE AND PRUDENTLY IN CURRED 29
COSTS, EVEN IF THE ENERGY S TORAGE DEVICE IS NOT DEPLOYED IN TIME TO AVOID 30
OR LIMIT A RELIABILI TY–MUST–RUN AGREEMENT , IF: 31
(I) FOR AN ENERGY STORAG E DEVICE THAT WAS NO T 32
DEPLOYED IN TIME TO AVOID OR LIMIT A REL IABILITY–MUST–RUN AGREEMENT , 33
THERE WAS A REASONAB LE EXPECTATION THAT THE ENERGY STORAGE D EVICE 34 8 HOUSE BILL 1112
WOULD HA VE BEEN DEPLOYED IN TIME TO AVOID OR LIM IT THE RELIABILITY–MUST–1
RUN AGREEMENT ; AND 2
(II) THE COSTS WERE NOT A PPROVED BY THE FEDERAL 3
ENERGY REGULATORY COMMISSION FOR RECOVE RY. 4
(E) SUBJECT TO APPROVAL B Y THE COMMISSION, AN INVESTOR–OWNED 5
ELECTRIC COMPA NY MAY OPERATE AN EN ERGY STORAGE DEVICE IN WHOLESALE 6
MARKETS OR OTHER APP LICATIONS WHEN THE E NERGY STORAGE DEVICE IS NOT 7
PROVIDING ELECTRICIT Y TO THE TRANSMISSIO N OR DISTRIBUTION SY STEM. 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take eff ect 9
October June 1, 2024. 10
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.