EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1296*
HOUSE BILL 1296
M5, C5 4lr3198
By: Delegates Wilson and Crosby
Introduced and read first time: February 9, 2024
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Electricity – Offshore Wind Projects – Alterations 2
FOR the purpose of requiring the Public Service Commission to open a certain proceeding 3
to evaluate certain offshore wind projects; authorizing certain offshore wind projects 4
to submit certain revised plans for project schedules, sizes, or pricing, including 5
offshore wind renewable energy credit pricing and, under certain circumstances, to 6
seek approval from the Commission to increase the maximum amount of offshore 7
wind renewable energy credits sold under a certain order, subject to certain 8
limitations; requiring the Commission to approve, conditionally approve, or deny 9
certain applications within a certain period of time; requiring the Commission to 10
develop and report to the General Assembly on a certain plan; and generally relating 11
to offshore wind projects. 12
BY repealing and reenacting, without amendments, 13
Article – Public Utilities 14
Section 7–701(a), (b), (f), (g), (k), (p), and (p–1) and 7–704.1(a), (c)(6)(ii), (g), (h), and 15
(i) 16
Annotated Code of Maryland 17
(2020 Replacement Volume and 2023 Supplement) 18
BY adding to 19
Article – Public Utilities 20
Section 7–704.1(l) and (m) 21
Annotated Code of Maryland 22
(2020 Replacement Volume and 2023 Supplement) 23
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 24
That the Laws of Maryland read as follows: 25
Article – Public Utilities 26
2 HOUSE BILL 1296
7–701. 1
(a) In this subtitle the following words have the meanings indicated. 2
(b) “Administration” means the Maryland Energy Administration. 3
(f) “Offshore wind energy” means energy generated by a qualified offshore wind 4
project. 5
(g) “Offshore wind renewable energy credit” or “OREC” means a renewable 6
energy credit equal to the generation attributes of 1 megawatt–hour of electricity that is 7
derived from offshore wind energy. 8
(k) “Qualified offshore wind project” means a wind turbine electricity generation 9
facility, including the associated transmission–related interconnection facilities and 10
equipment, that: 11
(1) is located: 12
(i) on the outer continental shelf of the Atlantic Ocean in an area 13
that the United States Department of the Interior designates for leasing; and 14
(ii) more than 10 miles off the coast of the State for a project selected 15
under § 7–704.4 of this subtitle or approved under § 7–704.1 of this subtitle after June 1, 16
2023; and 17
(2) interconnects to the PJM Interconnection grid: 18
(i) at a point located on the Delmarva Peninsula; or 19
(ii) through an offshore wind transmission project selected under § 20
7–704.3 of this subtitle. 21
(p) “Round 1 offshore wind project” means a qualified offshore wind project that: 22
(1) is between 10 and 30 miles off the coast of the State; and 23
(2) the Commission approved under § 7–704.1 of this subtitle before July 24
1, 2017. 25
(p–1) “Round 2 offshore wind project” means a qualified offshore wind project that: 26
(1) is not less than 10 miles off the coast of the State; and 27
(2) the Commission approves under § 7–704.1 of this subtitle on or after 28
July 1, 2017. 29
HOUSE BILL 1296 3
7–704.1. 1
(a) (1) The General Assembly finds and declares that: 2
(i) the State has a goal of reaching 8,500 megawatts of offshore wind 3
energy capacity by 2031, including Round 1 offshore wind projects, Round 2 offshore wind 4
projects, and any other procurement efforts; 5
(ii) the General Assembly anticipates the issuance of sufficient wind 6
energy leases in the central Atlantic region to satisfy the goal stated in item (i) of this 7
paragraph; 8
(iii) the development of offshore wind energy is important to the 9
economic well–being of the State and the nation; 10
(iv) offshore wind can provide clean energy at the scale needed to 11
help achieve the State’s economy–wide net–zero greenhouse gas emissions reduction 12
targets established in Chapter 38 of the Acts of the General Assembly of 2022; 13
(v) it is in the public interest of the State to facilitate the 14
construction of at least 1,200 megawatts of Round 2 offshore wind projects in order to: 15
1. position the State to take advantage of the economic 16
development benefits of the emerging offshore wind industry; 17
2. promote the development of renewable energy sources 18
that increase the nation’s independence from foreign sources of fossil fuels; 19
3. reduce the adverse environmental and health impacts of 20
traditional fossil fuel energy sources; and 21
4. provide a long–term hedge against volatile prices of fossil 22
fuels; and 23
(vi) it is in the public interest of the State to maximize the 24
opportunities for obtaining and using federal funds for offshore wind and related 25
transmission projects through the inclusion of specified labor standards and goals, domestic 26
content requirements, and other provisions to align State law with provisions of the federal 27
Infrastructure Investment and Jobs Act of 2021 and the federal Inflation Reduction Act of 28
2022. 29
(2) After the effective date of Commission regulations implementing this 30
section and § 7–704.2 of this subtitle, and before June 30, 2017, a person may submit an 31
application to the Commission for approval of a proposed Round 1 offshore wind project. 32
(3) (i) On receipt of the application for approval of a Round 1 offshore 33
wind project, the Commission shall: 34 4 HOUSE BILL 1296
1. open an application period when other interested persons 1
may submit applications for approval of Round 1 offshore wind projects; and 2
2. provide notice that the Commission is accepting 3
applications for approval of Round 1 offshore wind projects. 4
(ii) The Commission shall set the closing date for the application 5
period to be no sooner than 90 days after the notice provided under subparagraph (i) of this 6
paragraph. 7
(4) The Commission shall provide additional application periods 8
beginning, respectively: 9
(i) January 1, 2020, for consideration of Round 2 offshore wind 10
projects to begin creating ORECs not later than 2026; 11
(ii) January 1, 2021, for consideration of Round 2 offshore wind 12
projects to begin creating ORECs not later than 2028; and 13
(iii) January 1, 2022, for consideration of Round 2 offshore wind 14
projects to begin creating ORECs not later than 2030. 15
(5) In its discretion, the Commission may provide for additional application 16
periods that meet the requirements of this section. 17
(c) An application shall include: 18
(6) a commitment to: 19
(ii) deposit at least $6,000,000, in the manner required under 20
subsection (h) of this section, into the Maryland Offshore Wind Business Development 21
Fund established under § 9–20C–03 of the State Government Article; 22
(g) (1) An order the Commission issues approving a proposed offshore wind 23
project shall: 24
(i) specify the OREC price schedule, which may not authorize an 25
OREC price greater than, for a Round 1 offshore wind project, $190 per megawatt–hour in 26
2012 dollars; 27
(ii) specify the duration of the OREC pricing schedule, not to exceed 28
20 years; 29
(iii) specify the number of ORECs the offshore wind project may sell 30
each year; 31
HOUSE BILL 1296 5
(iv) provide that: 1
1. a payment may not be made for an OREC until electricity 2
supply is generated by the offshore wind project; and 3
2. ratepayers, purchasers of ORECs, and the State shall be 4
held harmless for any cost overruns associated with the offshore wind project; and 5
(v) require that any debt instrument issued in connection with a 6
qualified offshore wind project include language specifying that the debt instrument does 7
not establish a debt, obligation, or liability of the State. 8
(2) An order approving a proposed offshore wind project vests the owner of 9
the qualified offshore wind project with the right to receive payments for ORECs according 10
to the terms in the order. 11
(3) On or before March 1 each year, the Commission shall report to the 12
Governor and, in accordance with § 2–1257 of the State Government Article, to the Senate 13
Committee on Education, Energy, and the Environment and the House Economic Matters 14
Committee on: 15
(i) compliance by applicants with the minority business enterprise 16
participation goals under subsection (e)(4) of this section; and 17
(ii) with respect to the community benefit agreement under 18
subsection (f)(1) of this section: 19
1. the availability and use of opportunities for local 20
businesses and small, minority, women–owned, and veteran–owned businesses; 21
2. the success of efforts to promote career training 22
opportunities in the manufacturing, maintenance, and construction industries for local 23
residents, veterans, women, and minorities; and 24
3. compliance with the minority workforce goal under 25
subsection (f)(1)(i)5 of this section. 26
(h) For Round 2 offshore wind project applications, the Commission shall approve 27
OREC orders representing a minimum of 400 megawatts of nameplate capacity proposed 28
during each application period unless: 29
(1) not enough Round 2 offshore wind project applications are submitted to 30
meet the net benefit test under subsection (c)(3) of this section; or 31
(2) the cumulative net ratepayer impact exceeds the maximums provided 32
in subsection (f)(1)(ii)2 of this section. 33
6 HOUSE BILL 1296
(i) (1) Within 60 days after the Commission approves the application of a 1
proposed offshore wind project, the qualified offshore wind project shall deposit $2,000,000 2
into the Maryland Offshore Wind Business Development Fund established under § 3
9–20C–03 of the State Government Article. 4
(2) Within 1 year after the initial deposit under paragraph (1) of this 5
subsection, the qualified offshore wind project shall deposit an additional $2,000,000 into 6
the Maryland Offshore Wind Business Development Fund. 7
(3) Within 2 years after the initial deposit under paragraph (1) of this 8
subsection, the qualified offshore wind project shall deposit an additional $2,000,000 into 9
the Maryland Offshore Wind Business Development Fund. 10
(L) (1) IN THIS SUBSECTION, “REVISED ROUND 2 OFFSHORE WIND 11
PROJECT” MEANS A ROUND 2 OFFSHORE WIND PROJEC T THAT HAS FILED AN 12
APPLICATION WITH THE COMMISSION FOR REVISE D PROJECT SCHEDULES , SIZES, 13
OR PRICING, INCLUDING OREC PRICING, UNDER THIS SUBSECTIO N. 14
(2) THIS SUBSECTION APPLI ES TO ROUND 1 OFFSHORE WIND 15
PROJECTS AND ROUND 2 OFFSHORE WIND PROJEC TS THAT: 16
(I) ARE TO BE LOCATED IN A WIND ENERGY AREA AUTHORIZED 17
BY THE BUREAU OF OCEAN ENERGY MANAGEMENT ; AND 18
(II) POSSESS ORECS AS OF JUNE 1, 2024. 19
(3) (I) ON JUNE 1, 2024, THE COMMISSION SHALL OPEN A 20
REVISED ROUND 2 OFFSHORE WIND PROJEC T PROCEEDING THAT IS LIMITED TO 21
EVALUATING REVISED PROJECT SCHE DULES, SIZES, OR PRICING, INCLUDING 22
OREC PRICING, FOR A PREVIOUSLY APPROVED ROUND 2 OFFSHORE WIND 23
PROJECT. 24
(II) ANY PREVIOUSLY APPROVED ROUND 2 OFFSHORE WIND 25
PROJECT MAY SUBMIT A REVISED PLAN FOR THE PROJECT BY FILING AN 26
APPLICATION WITH THE COMMISSION. 27
(III) AN APPLICATION FOR A RE VISED ROUND 2 OFFSHORE WIND 28
PROJECT SHALL BE LIMITED TO ADDRESSING REVISED PROJECT SCHE DULES, SIZES, 29
OR PRICING, INCLUDING OREC PRICING. 30
(IV) 1. ON RECEIPT OF AN APPLICATION FOR APPROVAL OF 31
A REVISED ROUND 2 OFFSHORE WIND PROJEC T, THE COMMISSION SHALL COND UCT 32
AN EXPEDITED REVIEW OF THE APPLICATION . 33
HOUSE BILL 1296 7
2. UNLESS EXTENDED BY MUT UAL CONSENT OF THE 1
PARTIES, THE COMMISSION SHALL APPR OVE, CONDITIONALLY APPROV E, OR DENY 2
AN APPLICATION WITHI N 90 DAYS AFTER THE APPLI CATION IS FILED AND FOUND BY 3
THE COMMISSION TO BE ADMI NISTRATIVELY COMPLET E. 4
(V) 1. EXCEPT AS PROVIDED IN SUBSUBPARAGRAPHS 2 AND 5
3 OF THIS SUBPARAGRAPH , AN APPLICATION FOR A REVISED ROUND 2 OFFSHORE 6
WIND PROJECT SHALL B E SUBJECT TO ALL CRI TERIA SET FORTH IN T HIS SECTION 7
FOR ROUND 2 OFFSHORE WIND PROJECTS. 8
2. AN APPLICATION FOR A REVISED ROUND 2 9
OFFSHORE WIND PROJEC T IS NOT SUBJECT TO THE REQUIREMENTS OF 10
SUBSECTIONS (C)(6)(II) AND (I) OF THIS SECTION. 11
3. IF IN A REVISED ROUND 2 OFFSHORE WIND PROJEC T 12
PROCEEDING THE COMMISSION REVIEWS MULTIPLE REASONABLE PROPOSALS 13
MEETING THE REQUIREM ENTS OF THIS SECTION FOR ROUND 2 OFFSHORE WIND 14
PROJECTS, THE COMMISSION SHALL ISSUE ORDERS APPROVING THE REVISED 15
ROUND 2 OFFSHORE WIND PROJEC TS NECESSARY TO FACILITATE AS MUC H ENERGY 16
CAPACITY AS IS CONSI STENT WITH THE ROUND 2 OFFSHORE WIND PROJEC T 17
RATEPAYER PROTECTION S UNDER THIS S ECTION, INCLUDING AT LEAST 800 18
MEGAWATTS OF CAPACITY FROM REVISED ROUND 2 OFFSHORE WIND PROJEC TS, IF 19
PRACTICABLE , EVEN IF THE REVISED ROUND 2 OFFSHORE WIND PROJEC T 20
APPLICATIONS MAY RES ULT IN LOWER TOTAL ENERGY CAPACIT Y AWARDED THAN 21
WAS PREVIOUSLY AWARDED TO THE REVISED ROUND 2 OFFSHORE WIND PROJEC T 22
IN ITS PREVIOUSLY APPROVED ROUND 2 OFFSHORE WIND PROJEC T APPLICATION. 23
4. WHEN EVALUATING AN AP PLICATION FOR A REVI SED 24
ROUND 2 OFFSHORE WIND PROJEC T, THE COMMISSION SHALL , TO THE EXTENT 25
PRACTICABLE , EXTEND PRIOR OR EXISTING PR OCEEDINGS FOR APPLIC ANTS THAT 26
HAVE A PREVIOUSLY APPROVED ORDER FOR A ROUND 2 OFFSHORE WIND PROJEC T. 27
(4) (I) IN ORDER TO MAXIMIZE THE AMOUNT OF RENEWA BLE 28
ENERGY GENERATED BY A ROUND 1 OFFSHORE WIND PROJEC T, ANY ROUND 1 29
OFFSHORE WIND PROJECT MAY SEEK APP ROVAL FROM THE COMMISSION TO AMEND 30
ITS PREVIOUSLY APPROVED ROUND 1 OFFSHORE WIND PROJEC T ORDER TO: 31
1. INCREASE THE MAXIMUM AMOUNT OF ORECS SOLD 32
UNDER THE PREVIOUS ORDER, CONSISTENT WITH THE ROUND 1 OFFSHORE WIND 33
PROJECT RATEPAYER P ROTECTIONS UNDER THI S SECTION; AND 34
2. MODIFY ITS PROJECT SC HEDULE. 35
8 HOUSE BILL 1296
(II) THE COMMISSION MAY APPROV E A REQUEST FOR AN 1
INCREASED AMOUNT OF ORECS SOLD UNDER A PREVIOUSLY APPROVED ROUND 1 2
OFFSHORE WIND PROJEC T ORDER ON A SHOWING T HAT: 3
1. THE UNIT PRICING OF THE ADDITIONAL ORECS DOES 4
NOT EXCEED THE PRICI NG UNDER THE PREVIOUSLY APPROVED ROUND 1 5
OFFSHORE WIND PROJEC T ORDER; AND 6
2. THE ROUND 1 OFFSHORE WIND PROJEC T IS IN 7
COMPLIANCE WITH THE R ATEPAYER PROTECTION PROVISIONS REQUIRED FOR 8
ROUND 1 OFFSHORE WIND PROJEC TS, TAKING INTO CONSIDER ATION CHANGES IN 9
ECONOMIC CONDITIONS SINCE THE ORIGINAL ROUND 1 OFFSHORE WIND PROJEC T 10
AWARDS. 11
(M) (1) THE COMMISSION, WITH THE ASSISTANCE OF THE 12
ADMINISTRATION , THE DEPARTMENT OF THE ENVIRONMENT , THE DEPARTMENT 13
OF NATURAL RESOURCES, AND OTHER INTERESTED STATE UNITS SHALL DEVELOP 14
A PLAN FOR ACHIEVING A TOTAL OF 8,500 MEGAWATTS OF OFFSHOR E WIND ENERGY 15
CAPACITY BY 2031. 16
(2) ON OR BEFORE JANUARY 1, 2025, THE COMMISSION SHALL 17
SUBMIT A REPORT ON THE PLAN TO THE GENERAL ASSEMBLY, IN ACCORDANCE 18
WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE. 19
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 20
1, 2024. 21