EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G 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.
*hb1296*
HOUSE BILL 1296
M5, C5 4lr3198
CF SB 1161
By: Delegates Wilson and Crosby
Introduced and read first time: February 9, 2024
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 1, 2024
CHAPTER ______
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; altering the 11
Department of General Services’ requirements and processes for the procurement of 12
offshore wind energy; and generally relating to offshore wind projects. 13
BY repealing and reenacting, without amendments, 14
Article – Public Utilities 15
Section 7–701(a), (b), (f), (g), (k), (p), and (p–1) and, 7–704.1(a), (c)(6)(ii), (g), (h), and 16
(i), and 7–704.4(d) 17
Annotated Code of Maryland 18
(2020 Replacement Volume and 2023 Supplement) 19
BY adding to 20
Article – Public Utilities 21
Section 7–704.1(l) and (m) 22
Annotated Code of Maryland 23 2 HOUSE BILL 1296
(2020 Replacement Volume and 2023 Supplement) 1
BY repealing and reenacting, with amendments, 2
Article – Public Utilities 3
Section 7–704.4(b)(1) and (e) 4
Annotated Code of Maryland 5
(2020 Replacement Volume and 2023 Supplement) 6
SECTION 1. BE IT ENACTED BY THE GENERAL ASSE MBLY OF MARYLAND, 7
That the Laws of Maryland read as follows: 8
Article – Public Utilities 9
7–701. 10
(a) In this subtitle the following words have the meanings indicated. 11
(b) “Administration” means the Maryland Energy Administration. 12
(f) “Offshore wind energy” means energy generated by a qualified offshore wind 13
project. 14
(g) “Offshore wind renewable energy credit” or “OREC” means a renewable 15
energy credit equal to the generation attributes of 1 megawatt–hour of electricity that is 16
derived from offshore wind energy. 17
(k) “Qualified offshore wind project” means a wind turbine electricity generation 18
facility, including the associated transmission–related interconnection facilities and 19
equipment, that: 20
(1) is located: 21
(i) on the outer continental shelf of the Atlantic Ocean in an area 22
that the United States Department of the Interior designates for leasing; and 23
(ii) more than 10 miles off the coast of the State for a project selected 24
under § 7–704.4 of this subtitle or approved under § 7–704.1 of this subtitle after June 1, 25
2023; and 26
(2) interconnects to the PJM Interconnection grid: 27
(i) at a point located on the Delmarva Peninsula; or 28
(ii) through an offshore wind transmission project selected under § 29
7–704.3 of this subtitle. 30
(p) “Round 1 offshore wind project” means a qualified offshore wind project that: 31 HOUSE BILL 1296 3
(1) is between 10 and 30 miles off the coast of the State; and 1
(2) the Commission approved under § 7–704.1 of this subtitle before July 2
1, 2017. 3
(p–1) “Round 2 offshore wind project” means a qualified offshore wind project that: 4
(1) is not less than 10 miles off the coast of the State; and 5
(2) the Commission approves under § 7–704.1 of this subtitle on or after 6
July 1, 2017. 7
7–704.1. 8
(a) (1) The General Assembly finds and declares that: 9
(i) the State has a goal of reaching 8,500 megawatts of offshore wind 10
energy capacity by 2031, including Round 1 offshore wind projects, Round 2 offshore wind 11
projects, and any other procurement efforts; 12
(ii) the General Assembly anticipates the issuance of sufficient wind 13
energy leases in the central Atlantic region to satisfy the goal stated in item (i) of this 14
paragraph; 15
(iii) the development of offshore wind energy is important to the 16
economic well–being of the State and the nation; 17
(iv) offshore wind can provide clean energy at the scale needed to 18
help achieve the State’s economy–wide net–zero greenhouse gas emissions reduction 19
targets established in Chapter 38 of the Acts of the General Assembly of 2022; 20
(v) it is in the public interest of the State to facilitate the 21
construction of at least 1,200 megawatts of Round 2 offshore wind projects in order to: 22
1. position the State to take advantage of the economic 23
development benefits of the emerging offshore wind industry; 24
2. promote the development of renewable energy sources 25
that increase the nation’s independence from foreign sources of fossil fuels; 26
3. reduce the adverse environmental and health impacts of 27
traditional fossil fuel energy sources; and 28
4. provide a long–term hedge against volatile prices of fossil 29
fuels; and 30
4 HOUSE BILL 1296
(vi) it is in the public interest of the State to maximize the 1
opportunities for obtaining and using federal funds for offshore wind and related 2
transmission projects through the inclusion of specified labor standards and goals, domestic 3
content requirements, and other provisions to align State law with provisions of the federal 4
Infrastructure Investment and Jobs Act of 2021 and the federal Inflation Reduction Act of 5
2022. 6
(2) After the effective date of Commission regulations implementing this 7
section and § 7–704.2 of this subtitle, and before June 30, 2017, a person may submit an 8
application to the Commission for approval of a proposed Round 1 offshore wind project. 9
(3) (i) On receipt of the application for approval of a Round 1 offshore 10
wind project, the Commission shall: 11
1. open an application period when other interested persons 12
may submit applications for approval of Round 1 offshore wind projects; and 13
2. provide notice that the Commission is accepting 14
applications for approval of Round 1 offshore wind projects. 15
(ii) The Commission shall set the closing date for the application 16
period to be no sooner than 90 days after the notice provided under subparagraph (i) of this 17
paragraph. 18
(4) The Commission shall provide additional application periods 19
beginning, respectively: 20
(i) January 1, 2020, for consideration of Round 2 offshore wind 21
projects to begin creating ORECs not later than 2026; 22
(ii) January 1, 2021, for consideration of Round 2 offshore wind 23
projects to begin creating ORECs not later than 2028; and 24
(iii) January 1, 2022, for consideration of Round 2 offshore wind 25
projects to begin creating ORECs not later than 2030. 26
(5) In its discretion, the Commission may provide for additional application 27
periods that meet the requirements of this section. 28
(c) An application shall include: 29
(6) a commitment to: 30
(ii) deposit at least $6,000,000, in the manner required under 31
subsection (h) of this section, into the Maryland Offshore Wind Business Development 32
Fund established under § 9–20C–03 of the State Government Article; 33
HOUSE BILL 1296 5
(g) (1) An order the Commission issues approving a proposed offshore wind 1
project shall: 2
(i) specify the OREC price schedule, which may not authorize an 3
OREC price greater than, for a Round 1 offshore wind project, $190 per megawatt–hour in 4
2012 dollars; 5
(ii) specify the duration of the OREC pricing schedule, not to exceed 6
20 years; 7
(iii) specify the number of ORECs the offshore wind project may sell 8
each year; 9
(iv) provide that: 10
1. a payment may not be made for an OREC until electricity 11
supply is generated by the offshore wind project; and 12
2. ratepayers, purchasers of ORECs, and the State shall be 13
held harmless for any cost overruns associated with the offshore wind project; and 14
(v) require that any debt instrument issued in connection with a 15
qualified offshore wind project include language specifying that the debt instrument does 16
not establish a debt, obligation, or liability of the State. 17
(2) An order approving a proposed offshore wind project vests the owner of 18
the qualified offshore wind project with the right to receive payments for ORECs according 19
to the terms in the order. 20
(3) On or before March 1 each year, the Commission shall report to the 21
Governor and, in accordance with § 2–1257 of the State Government Article, to the Senate 22
Committee on Education, Energy, and the Environment and the House Economic Matters 23
Committee on: 24
(i) compliance by applicants with the minority business enterprise 25
participation goals under subsection (e)(4) of this section; and 26
(ii) with respect to the community benefit agreement under 27
subsection (f)(1) of this section: 28
1. the availability and use of opportunities for local 29
businesses and small, minority, women–owned, and veteran–owned businesses; 30
2. the success of efforts to promote career training 31
opportunities in the manufacturing, maintenance, and construction industries for local 32
residents, veterans, women, and minorities; and 33
6 HOUSE BILL 1296
3. compliance with the minority workforce goal under 1
subsection (f)(1)(i)5 of this section. 2
(h) For Round 2 offshore wind project applications, the Commission shall approve 3
OREC orders representing a minimum of 400 megawatts of nameplate capacity proposed 4
during each application period unless: 5
(1) not enough Round 2 offshore wind project applications are submitted to 6
meet the net benefit test under subsection (c)(3) of this section; or 7
(2) the cumulative net ratepayer impact exceeds the maximums provided 8
in subsection (f)(1)(ii)2 of this section. 9
(i) (1) Within 60 days after the Commission approves the application of a 10
proposed offshore wind project, the qualified offshore wind project shall deposit $2,000,000 11
into the Maryland Offshore Wind Business Development Fund established under § 12
9–20C–03 of the State Government Article. 13
(2) Within 1 year after the initial deposit under paragraph (1) of this 14
subsection, the qualified offshore wind project shall deposit an additional $2,000,000 into 15
the Maryland Offshore Wind Business Development Fund. 16
(3) Within 2 years after the initial deposit under paragraph (1) of this 17
subsection, the qualified offshore wind project shall deposit an additional $2,000,000 into 18
the Maryland Offshore Wind Business Development Fund. 19
(L) (1) IN THIS SUBSECTION , “REVISED ROUND 2 OFFSHORE WIND 20
PROJECT” MEANS A ROUND 2 OFFSHORE WIND PROJEC T THAT HAS FILED AN 21
APPLICATION WITH THE COMMISSION FOR REVISE D PROJECT SCHEDULES , SIZES, 22
OR PRICING, INCLUDING OREC PRICING, UNDER THIS SUBSECTIO N. 23
(2) THIS SUBSECTION APPLI ES TO ROUND 1 OFFSHORE WIND 24
PROJECTS AND ROUND 2 OFFSHORE WIND PROJEC TS THAT: 25
(I) ARE TO BE LOCATED IN A WIND ENERGY AREA A UTHORIZED 26
BY THE BUREAU OF OCEAN ENERGY MANAGEMENT ; AND 27
(II) POSSESS ORECS, OR ARE SUBJECT TO A COMMISSION 28
ORDER APPROVING AN OREC PRICE SCHEDU LE, AS OF JUNE 1, 2024. 29
(3) (I) ON JUNE 1, 2024, THE COMMISSION SHALL OPEN A 30
REVISED ROUND 2 OFFSHORE WIND PROJEC T PROCEEDING THAT IS LIMITED TO 31
EVALUATING REVISED P ROJECT SCHEDULES , SIZES, OR PRICING, INCLUDING 32
OREC PRICING, FOR A PREVIOUSLY APP ROVED ROUND 2 OFFSHORE WIND 33
PROJECT. 34
HOUSE BILL 1296 7
(II) ANY PREVIOUSLY APPROV ED ROUND 2 OFFSHORE WIND 1
PROJECT MAY SUBMIT A REVISED PLAN FOR THE PROJECT BY FILING AN 2
APPLICATION WITH THE COMMISSION. 3
(III) AN APPLICATION FOR A REVISED ROUND 2 OFFSHORE WIND 4
PROJECT SHALL BE LIMITED TO ADDRES SING REVISED PROJECT SCHEDULES, SIZES, 5
OR PRICING, INCLUDING OREC PRICING. 6
(IV) 1. ON RECEIPT OF AN APPL ICATION FOR APPROVAL OF 7
A REVISED ROUND 2 OFFSHORE WIND PROJEC T, THE COMMISSION SHALL COND UCT 8
AN EXPEDITED REVIEW OF THE APPLICA TION. 9
2. UNLESS EXTENDED BY MU TUAL CONSENT OF THE 10
PARTIES, THE COMMISSION SHALL APPR OVE, CONDITIONALLY APPROV E, OR DENY 11
AN APPLICATION WITHI N 90 DAYS AFTER THE APPLI CATION IS FILED AND FOUND BY 12
THE COMMISSION TO BE ADMI NISTRATIVELY COMPLET E. 13
(V) 1. EXCEPT AS PROVIDED IN SUBSUBPARAGRAPHS 2 AND 14
3 OF THIS SUBPARAGRAPH , AN APPLICATION FOR A REVISED ROUND 2 OFFSHORE 15
WIND PROJECT SHALL B E SUBJECT TO ALL CRI TERIA SET FORTH IN T HIS SECTION 16
FOR ROUND 2 OFFSHORE WIND PROJEC TS. 17
2. AN APPLICATION FOR A REVISED ROUND 2 18
OFFSHORE WIND PROJEC T IS NOT SUBJECT TO THE REQUIREMENTS OF 19
SUBSECTIONS (C)(6)(II) AND (I) OF THIS SECTION. 20
3. IF IN A REVISED ROUND 2 OFFSHORE WIND PROJEC T 21
PROCEEDING THE COMMISSION REVIEWS MU LTIPLE REASONABLE PR OPOSALS 22
MEETING THE REQUIREMENTS OF THIS SECTION FOR ROUND 2 OFFSHORE WIND 23
PROJECTS, THE COMMISSION SHALL ISSU E ORDERS APPROVING T HE REVISED 24
ROUND 2 OFFSHORE WIND PROJEC TS NECESSARY TO FACI LITATE AS MUCH ENERG Y 25
CAPACITY AS IS CONSI STENT WITH THE ROUND 2 OFFSHORE WIND PROJEC T 26
RATEPAYER PROTECTION S UNDER THIS SECTION , INCLUDING AT LEAST 800 27
MEGAWATTS OF CAPACIT Y FROM REVISED ROUND 2 OFFSHORE WIND PROJEC TS, IF 28
PRACTICABLE , EVEN IF THE REVISED ROUND 2 OFFSHORE WIND PROJEC T 29
APPLICATIONS MAY RES ULT IN LOWER TOTAL E NERGY CAPACITY AWA RDED THAN 30
WAS PREVIOUSLY AWARD ED TO THE REVISED ROUND 2 OFFSHORE WIND PROJEC T 31
IN ITS PREVIOUSLY AP PROVED ROUND 2 OFFSHORE WIND PROJEC T APPLICATION. 32
4. WHEN EVALUATING AN AP PLICATION FOR A REVI SED 33
ROUND 2 OFFSHORE WIND PROJEC T, THE COMMISSION SHALL , TO THE EXTENT 34
PRACTICABLE , EXTEND PRIOR OR EXIS TING PROCEEDINGS FOR APPLICANTS THAT 35
HAVE A PREVIOUSLY AP PROVED ORDER FOR A ROUND 2 OFFSHORE WIND PROJEC T. 36
8 HOUSE BILL 1296
(4) (I) IN ORDER TO MAXIMIZE THE AMOUNT OF RENEWA BLE 1
ENERGY GENERATED BY A ROUND 1 OFFSHORE WIND PROJ ECT, ANY ROUND 1 2
OFFSHORE WIND PROJEC T MAY SEEK APPROVAL FROM THE COMMISSION TO AMEND 3
ITS PREVIOUSLY APPRO VED ROUND 1 OFFSHORE WIND PROJEC T ORDER TO: 4
1. INCREASE THE MAXIMUM AMOUNT OF ORECS SOLD 5
UNDER THE PREVIOUS O RDER, CONSISTENT WITH THE ROUND 1 OFFSHORE WIND 6
PROJECT RATEPAYER PR OTECTIONS UNDER THIS SECTION; AND 7
2. MODIFY ITS PROJECT S CHEDULE. 8
(II) THE COMMISSION MAY APPROV E A REQUEST FOR AN 9
INCREASED AMOUNT OF ORECS SOLD UNDER A PREVI OUSLY APPROVED ROUND 1 10
OFFSHORE WIND PROJEC T ORDER ON A SHOWING THAT : 11
1. THE UNIT PRICING OF THE ADDITIONAL ORECS DOES 12
NOT EXCEED THE PRICI NG UNDER THE PREVIOU SLY APPROVED ROUND 1 13
OFFSHORE WIND PROJEC T ORDER; AND 14
2. THE ROUND 1 OFFSHORE WIND PROJEC T IS IN 15
COMPLIANCE WITH THE RATEPAYER PROTECTION PROVISIONS REQUIRED FOR 16
ROUND 1 OFFSHORE WIND PROJEC TS, TAKING INTO CONSIDER ATION CHANGES IN 17
ECONOMIC CONDITIONS SINCE THE ORIGINAL ROUND 1 OFFSHORE WIND PROJEC T 18
AWARDS. 19
(M) (1) THE COMMISSION, WITH THE ASSISTANCE OF THE 20
ADMINISTRATION , THE DEPARTMENT OF THE ENVIRONMENT , THE DEPARTMENT 21
OF NATURAL RESOURCES, AND OTHER INTERESTED STATE UNITS SHALL DEV ELOP 22
A PLAN FOR ACHIEVING A TOTAL OF 8,500 MEGAWATTS OF OFFSHOR E WIND ENERGY 23
CAPACITY BY 2031. 24
(2) ON OR BEFORE JANUARY 1, 2025, THE COMMISSION SHALL 25
SUBMIT A RE PORT ON THE PLAN TO THE GENERAL ASSEMBLY, IN ACCORDANCE 26
WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE. 27
7–704.4. 28
(b) (1) The Department of General Services, in consultation with the Public 29
Service Commission, shall issue a competitive sealed procurement solicitation and may 30
enter into at least one contract for a power purchase agreement to procure [up to 5,000,000 31
megawatt–hours annually of] offshore wind energy and associated renewable energy 32
credits from one or more qualified offshore wind projects. 33
(d) The State shall: 34
HOUSE BILL 1296 9
(1) issue a procurement for offshore wind energy on or before July 31, 2024; 1
(2) provide a procurement submission process window of not less than 180 2
days; and 3
(3) award contracts in a timely manner. 4
(e) (1) (I) Subject to SUBPARAGRAPH (II) OF THIS paragraph [(2) of this 5
subsection], the State may enter into a contract or contracts for the procurement on or 6
before September 1, 2025. 7
[(2)] (II) The State may modify the date established in SUBPARAGRAPH 8
(I) OF THIS paragraph [(1) of this subsection] if an unforeseen circumstance adversely 9
affects the procurement submission process. 10
(2) (I) IF NO QUALIFIED OFFSH ORE WIND PROJECTS AR E 11
SUBMITTED DURING THE PROCUREMENT SUBMISSI ON PROCESS UNDER 12
PARAGRAPH (1) OF THIS SUBSECTION , THE STATE: 13
1. MAY EVALUATE AND REV ISE THE CONDITIONS O F THE 14
OFFSHORE WIND ENERGY PROCUREMENT ; AND 15
2. SHALL ISSUE A PROCUR EMENT FOR OFFSHORE W IND 16
ENERGY ON OR BEFORE DECEMBER 31, 2025. 17
(II) SUBJECT TO SUBPARAGRA PH (III) OF THIS PARAGRAPH , 18
THE STATE MAY ENTER INTO A CONTRACT OR CONTRA CTS FOR THE PROCUREM ENT 19
ON OR BEFORE MARCH 31, 2027. 20
(III) THE STATE MAY MODIFY THE DATE ESTABLISHED IN 21
SUBPARAGRAPH (II) OF THIS PARAGRAPH IF AN UNFORESEEN CIRCUM STANCE 22
ADVERSELY AFFECTS TH E PROCUREMENT SUBMIS SION PROCESS. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 24
1, 2024. 25