EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0397*
HOUSE BILL 397
M5, C5, P2 4lr0652
CF 4lr0763
By: Delegate Charkoudian
Introduced and read first time: January 17, 2024
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Public Utilities – Thermal Energy Network Systems – Authorization and 2
Establishment 3
(Working for Accessible Renewable Maryland Thermal Heat (WARMTH ) Act) 4
FOR the purpose of requiring each gas company to develop a plan for a pilot thermal energy 5
network system or systems on or before a certain date; requiring each gas company 6
to submit a certain proposal or proposals to the Public Service Commission for 7
approval on or before a certain date; authorizing a municipal corporation, county, or 8
community organization to submit neighborhoods to gas companies for consideration 9
as part of a pilot system; establishing requirements and authorizations for the 10
development and implementation of a proposal and thermal energy network system; 11
requiring the Commission to approve, approve with modifications, or reject each 12
proposal on or before a certain date; requiring the Commission, in consultation with 13
the Maryland Energy Administration and the Office of People’s Counsel, to make a 14
determination on whether to make a pilot system permanent after the completion of 15
the pilot system’s pilot period; establishing funding requirements for the 16
Administration to cover certain costs; requiring the Administration to coordinate 17
with the Department of Housing and Community Development to provide certain 18
services or funding; requiring the Maryland Environmental Service to issue certain 19
procurements for certain projects; establishing certain employment requirements for 20
certain projects; and generally relating to thermal energy network systems. 21
BY repealing and reenacting, without amendments, 22
Article – Public Utilities 23
Section 7–703(f)(1) 24
Annotated Code of Maryland 25
(2020 Replacement Volume and 2023 Supplement) 26
BY adding to 27
Article – Public Utilities 28
Section 7–1001 through 7–1006 to be under the new subtitle “Subtitle 10. Thermal 29 2 HOUSE BILL 397
Energy Network Systems” 1
Annotated Code of Maryland 2
(2020 Replacement Volume and 2023 Supplement) 3
BY repealing and reenacting, without amendments, 4
Article – Environnent 5
Section 1–701(a)(1), (7), and (8) 6
Annotated Code of Maryland 7
(2013 Replacement Volume and 2023 Supplement) 8
BY repealing and reenacting, without amendments, 9
Article – Housing and Community Development 10
Section 4–1801(a) and (c) 11
Annotated Code of Maryland 12
(2019 Replacement Volume and 2023 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Public Utilities 16
7–703. 17
(f) (1) (i) In this subsection the following words have the meanings 18
indicated. 19
(ii) “Area median income” has the meaning stated in § 4–1801 of the 20
Housing and Community Development Article. 21
(iii) “Low or moderate income housing” means housing that is 22
affordable for a household with an aggregate annual income that is below 120% of the area 23
median income. 24
SUBTITLE 10. THERMAL ENERGY NETWORK SYSTEMS. 25
7–1001. 26
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 27
INDICATED. 28
(B) “ADMINISTRATION ” MEANS THE MARYLAND ENERGY 29
ADMINISTRATION . 30
(C) “BEHIND–THE–METER PROJECT” MEANS A PROJECT THAT INVOLVES A 31
PHYSICAL, OPERATIONAL , OR BEHAVIORAL MODIFI CATION ON THE CUSTOMER SIDE 32
OF A UTILITY METER, INCLUDING REPLACEMENT OF APPLIANCES, RETROFITS, AND 33 HOUSE BILL 397 3
PANEL UPGRADES . 1
(D) “COMMUNITY BENEFIT AGR EEMENT” MEANS AN AGREEMENT 2
APPLICABLE TO THE CO NSTRUCTION OF ANY THERMAL ENERGY N ETWORK SYSTEM 3
AND ANY ACCOMPANYING RESIDENTIAL ELECTRIFICATION THAT : 4
(1) PROMOTES INCREASED O PPORTUNITIES FOR LOC AL BUSINESSES 5
AND SMALL, MINORITY, WOMEN–OWNED, AND VETERAN –OWNED BUSINESSES IN THE 6
CLEAN ENERGY INDUSTR Y; 7
(2) ENSURES THE TIMELY , SAFE, AND EFFICIENT COMPLE TION OF 8
THE PROJECT BY : 9
(I) FACILITATING A STEAD Y SUPPLY OF HIGHLY S KILLED 10
CRAFT WORKERS WHO SH ALL BE PAID NOT LESS THAN THE PREVAILING WAGE RATE 11
DETERMINED BY THE COMMISSIONER OF LABOR AND INDUSTRY UNDER TITLE 17, 12
SUBTITLE 2 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; AND 13
(II) GUARANTEEING THAT TH E CONSTRUCTION WORK 14
PERFORMED IN CONNECT ION WITH THE PROJECT WILL BE SUBJECT TO AN 15
AGREEMENT THAT : 16
1. ESTABLISHES THE TERM S AND CONDITIONS OF 17
EMPLOYMENT AT THE CO NSTRUCTION SITE OF T HE PROJECT OR A PORT ION OF THE 18
PROJECT; 19
2. GUARANTEES AGAINST S TRIKES, LOCKOUTS, AND 20
SIMILAR DISRUPTIONS ; 21
3. ENSURES THAT ALL WORK ON THE PROJECT FULLY 22
CONFORMS TO ALL RELE VANT STATE AND FEDERAL LAW S, RULES, AND 23
REGULATIONS ; 24
4. CREATES MUTUALLY BIN DING PROCEDURES FOR 25
RESOLVING LABOR DISP UTES ARISING DURING THE TERM OF THE PROJ ECT; 26
5. SETS FORTH OTHER MEC HANISMS FOR 27
LABOR–MANAGEMENT COOPERATI ON ON MATTERS OF MUT UAL INTEREST AND 28
CONCERN, INCLUDING PRODUCTIVI TY, QUALITY OF WORK , SAFETY, AND HEALTH ; 29
AND 30
6. BINDS ALL CONTRACTOR S AND SUBCONTRACTORS TO 31
THE TERMS OF THE AGR EEMENT THROUGH THE I NCLUSION OF APPROPRI ATE 32 4 HOUSE BILL 397
PROVISIONS IN ALL RELEV ANT SOLICITATION AND CONTRACT DOCUMENTS ; 1
(3) PROMOTES SAFE COMPLE TION OF THE PROJECT BY ENSURING 2
THAT AT LEAST 80% OF THE CRAFT WORKERS ON THE PROJECT HAVE COMPLETED 3
AN OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION 10–HOUR COURSE; 4
(4) PROMOTES CAREER TRAI NING OPPORTUNITIES I N THE 5
MANUFACTURING , MAINTENANCE , AND CONSTRUCTION IND USTRIES FOR LOCAL 6
RESIDENTS, VETERANS, WOMEN, MINORITIES, AND FORMERLY INCARCERATE D 7
INDIVIDUALS; 8
(5) INCLUDES PROVISIONS FOR LOCAL HIRING AND THE HIRING O F 9
HISTORICALLY DISADVA NTAGED GROUPS ; 10
(6) REFLECTS A 21ST–CENTURY LABOR –MANAGEMENT APPROACH BY 11
DEVELOPERS AND SUPPL IERS BASED ON COOPER ATION, HARMONY, AND 12
PARTNERSHIP THAT PRO ACTIVELY SEEKS TO EN SURE THAT WORKERS CA N FREELY 13
CHOOSE TO BOTH ORGAN IZE AND COLLECTIVELY BARGAIN ; 14
(7) USES LOCALLY , SUSTAINABLY, AND DOMESTICALLY 15
MANUFACTURED CONSTRU CTION MATERIALS AND COMPONENTS TO THE EX TENT 16
PRACTICABLE ; 17
(8) PROMOTES THE USE OF SKILLE D LOCAL LABOR , PARTICULARLY 18
WITH REGARD TO THE C ONSTRUCTION AND MANUFACTURING COMPON ENTS OF THE 19
PROJECT, USING METHODS INCLUD ING OUTREACH , HIRING, OR REFERRAL 20
METHODS THAT ARE AFF ILIATED WITH REGISTE RED APPRENTICESHIP P ROGRAMS 21
UNDER TITLE 11, SUBTITLE 4 OF THE LABOR AND EMPLOYMENT ARTICLE; AND 22
(9) AUTHORIZES THE MARYLAND DEPARTMENT OF LABOR AND THE 23
COMMISSION TO CONSIDE R, REVIEW, AND ENFORCE A PUBLIC SERVICE COMPANY ’S 24
COMPLIANCE WITH ANY COMMUNITY BENEFIT AG REEMENT. 25
(E) “FRONT–OF–METER PROJECT” MEANS A PROJECT THAT IMPACTS THE 26
UTILITY SIDE OF A ME TER. 27
(F) “GEOTHERMAL BOREHOLE ” MEANS A GEOTHERMAL S HAFT DRILLED 28
INTO THE EARTH FOR U SE IN A SYSTEM THAT USES THE THERMAL PROPERTIES O F 29
THE EARTH OR GROUNDW ATER TO HEAT OR COOL BUILDINGS. 30
(G) “LEARNING FROM THE GROUND UP” MEANS THE LEARNING FROM THE 31
GROUND UP RESEARCH TEAM FORM ED BY THE HOME ENERGY EFFICIENCY TEAM. 32
HOUSE BILL 397 5
(H) “LOW OR MODERATE INCOM E HOUSING” HAS THE MEANING STAT ED IN 1
§ 7–703(F)(1)(III) OF THIS TITLE. 2
(I) “PILOT SYSTEM” MEANS A PILOT THERMAL ENERGY NETWO RK SYSTEM 3
DEVELOPED BY A GAS C OMPANY TO REPLACE GA S INFRASTRUCTURE WIT H A 4
THERMAL ENERGY NETWO RK SYSTEM. 5
(J) “PJM CAPACITY M ARKET” MEANS THE CAPACITY MARKET OF PJM 6
INTERCONNECTION , LLC OR ANY SUCCESSOR ORG ANIZATION THAT SERVI CES THE 7
PJM REGION. 8
(K) “THERMAL ENERGY NETWOR K SYSTEM” MEANS A SYSTEM : 9
(1) OF CLOSED LOOP UNDERGRO UND PIPING INFRASTRU CTURE, 10
INCLUDING GEOTHERMAL BOREHOLES , LEADING UP TO A UTILITY METE R FOR THE 11
CONVEYANCE OR STORAG E OF RENEWABLE , NONGREENHOUSE GAS –EMITTING 12
THERMAL ENERGY ; AND 13
(2) THAT CREATES A NETWORK OF CUSTOME RS WITH THERMAL 14
ENERGY FOR HEATING A ND COOLING TH ROUGH NONCOMBUSTING E LECTRIC HEAT 15
PUMPS. 16
7–1002. 17
(A) (1) ON OR BEFORE OCTOBER 1, 2024, EACH GAS COMPANY SHA LL: 18
(I) BEGIN TO DEVELOP A P LAN FOR A PILOT SYSTEM OR 19
SYSTEMS; AND 20
(II) FILE NOTICE WITH THE COMMISSION THAT THE COMPANY 21
HAS BEGUN PLAN DEVELOPME NT. 22
(2) IN DEVELOPING A PLAN FOR A PILOT SYSTEM, A GAS COMPANY 23
SHALL COORDINATE WIT H COMMUNITY GROUPS , LOCAL GOVERNMENTS , ANY 24
CERTIFIED REPRESENTA TIVES OF THE EMPLOYEES OF THE GAS COMPANY , THE 25
COMMISSION, THE ADMINISTRATION , AND ANY OTHER GROUPS THE GAS COMPANY 26
CONSIDERS NECESSARY TO ALLOW FOR DIVERSE DE SIGN AMONG PILOT SYSTEMS. 27
(3) EACH GAS COMPANY SHAL L INCLUDE IN THE NOT ICE FILED 28
UNDER PARAGRAPH (1) OF THIS SUBSECTION : 29
(I) DETAILS OF ANY COORD INATION WITH COMMUNI TY 30
GROUPS, LOCAL GOVERNMENTS , CERTIFIED REPRESENTA TIVES OF THE 31 6 HOUSE BILL 397
EMPLOYEES OF THE GAS COMPANY, THE COMMISSION, THE ADMINISTRATION , AND 1
ANY OTHER GROUPS THE GAS COMPANY CONSIDERS NECESSARY TO ALLOW F OR 2
DIVERSE DESIGN AMONG PILOT SYSTEMS; AND 3
(II) ANY LETTERS OF SUPPO RT FROM INTERESTED G ROUPS. 4
(B) (1) ON OR BEFORE JULY 1, 2025, EACH GAS COMPANY SHALL SUBMIT 5
EITHER ONE OR TWO PROPOSALS FOR A PILO T SYSTEM TO THE COMMISSION FOR 6
APPROVAL. 7
(2) A PROPOSAL FOR A PILOT SYSTEM SHALL ENSURE THAT AT LEAST 8
80% OF ITS CUSTOMERS ARE FROM LOW OR MODERATE INCOME HOUSING. 9
(3) A CUSTOMER MAY CHOOSE TO OPT OUT OF A PILOT SYSTE M 10
BEFORE THE PROPOSAL FOR THE PILOT SYSTEM IS SUBMITTED. 11
(4) EACH PROPOSAL FOR A PILOT SYSTEM SHALL DEMONSTRATE 12
THAT THE GAS COMPANY HAS SOUGHT ACCESS TO ANY AVAILABLE FEDERAL 13
FUNDING IN THE FORM OF A MATCH, GRANT, LOAN, OR TAX CREDIT , INCLUDING 14
THOSE ESTABLISHED UNDER THE ENERGY INFRASTRUCTURE REINVESTMENT 15
CATEGORY OF THE TITLE 17 CLEAN ENERGY FINANCING PROGRAM AND THE 16
GREENHOUSE GAS REDUCTION FUND UNDER THE FEDERAL INFLATION 17
REDUCTION ACT OF 2022. 18
(5) EACH GAS COMPAN Y IS RESPONSIBLE FOR ENSURING THAT EACH 19
PROPOSAL SUBMITTED B Y THE GAS COMPANY COMPLIES WIT H ALL APPLICABLE 20
FEDERAL STATUTES , REGULATIONS , AND GUIDANCE RELATIN G TO ANY FEDERAL 21
FUNDING. 22
(6) EACH PROPOSAL SHALL ADDRESS: 23
(I) HOW THE PILOT SYSTEM WILL DEVELOP USEFUL 24
INFORMATION FOR THE ADOPTION OF REGULATIONS GOVER NING THERMAL 25
ENERGY NETWORK SYSTEMS; 26
(II) HOW THE PILOT SYSTEM FURTHERS GREENHOUSE GAS 27
EMISSIONS REDUCTION GOALS; 28
(III) HOW THE PILOT SYSTEM ADVANCES FINANCIAL A ND 29
TECHNICAL APPR OACHES TO EQUITABLE AND AFFORDABLE BUILD ING 30
ELECTRIFICATION ; 31
(IV) HOW THE PILOT SYSTEM CREATES BENEFITS TO ITS 32 HOUSE BILL 397 7
CUSTOMERS , EMPLOYEES, AND SOCIETY AT LARGE , INCLUDING PUBLIC HEA LTH 1
BENEFITS, QUALITY JOB RETENTIO N OR CREATION , RELIABILITY, AND INCREASED 2
AFFORDABILITY OF REN EWABLE THERMAL ENERG Y OPTIONS; 3
(V) HOW THE PILOT SYSTEM CONTRIBUTES TO AVOID ING COSTS 4
TO ELECTRIC DISTRIBUTIO N AND TRANSMISSION S YSTEMS THAT WOULD 5
OTHERWISE BE REQUIRE D FOR ELECTRIFICATIO N BY COMPARING THE PRO POSED 6
SYSTEM TO THE COS T OF ELECTRIFICATION USING THE MOST WIDEL Y 7
COMMERCIALLY AVAILAB LE AIR–SOURCE HEAT PUMPS ; 8
(VI) HOW THE PILOT SYSTEM CONTRIBUTES TO AVOID ING COSTS 9
RELATED TO GAS PIPE REPLACEMENT ; 10
(VII) THE EXTENT TO WHICH THE PROPOSAL GIVES PRIORITY TO 11
UNDERSERVED OR OVERBURDENED COMM UNITIES AS DEFINED I N § 1–701(A) OF 12
THE ENVIRONMENT ARTICLE; 13
(VIII) THE PILOT SYSTEM’S ABILITY TO BID DEMAND REDUCTION 14
INTO THE PJM CAPACITY MARKET ; 15
(IX) NEIGHBORHOODS AT THE END POINT OF A GAS S YSTEM 16
WHERE A FULL TRANSITION FROM GAS SYSTEMS TO ELECTRIFICATION COUL D BE 17
FACILITATED WITHIN THE PILOT PER IOD OR WITHIN 5 YEARS AFTER THE PILOT 18
PERIOD CONCLUDES; 19
(X) SAFETY; 20
(XI) RELIABILITY; 21
(XII) ENVIRONMENTAL ACCEPT ABILITY OF THE FLUID 22
TECHNOLOGY EMPLOYED ; 23
(XIII) OPERATIONS; 24
(XIV) MAINTENANCE ; 25
(XV) CUSTOMER COMPLAINT R ESOLUTION; 26
(XVI) EMERGENCY RESPONSE ; 27
(XVII) POINTS OF INTERCONNE CTION BETWEEN THE GA S 28
COMPANY AND HOMEOWNER FOR ANY FL UID TRANSFER; 29
8 HOUSE BILL 397
(XVIII) TECHNOLOGY TO BE USE D TO SHUT OFF FLUID FLOW TO 1
CUSTOMERS ; 2
(XIX) CUSTOMER SERVICE TER MINATION IN THE EVEN T OF BILL 3
NONPAYMENT ; 4
(XX) LIFE EXPECTANCY OF T HE GEOTHERMAL SYSTEM ; AND 5
(XXI) ANY OTHER REQUIREMEN TS AS DETERMINED BY THE 6
COMMISSION. 7
(7) EACH PROPOSAL SHALL I NCLUDE: 8
(I) A PROPOSED RATE STRUCTURE FOR T HE PILOT SYSTEM 9
THAT ENSURES THAT AN Y CUSTOMER PARTICIPA TING IN THE PILOT SYSTEM DOES 10
NOT PAY MORE FOR UTILITIES THAN IF THE CUSTOMER HAD NOT PARTICIPATED ; 11
AND 12
(II) A PROPOSED SET OF ME ASUREMENTS OF ENERGY UNITS 13
AND ACCOU NTING STANDARDS . 14
(8) (I) A MUNICIPAL CORPORATION , COUNTY, OR COMMUNITY 15
ORGANIZATION MAY SUB MIT NEIGHBORHOODS TO GAS COMPANIES FOR 16
CONSIDERATION AS PAR T OF A PILOT SYSTEM. 17
(II) A MUNICIPAL CORPORATION , COUNTY, OR COMMUNITY 18
ORGANIZATION THAT SU BMITS A NEIGHBORHOOD TO A GAS COMPANY FOR 19
CONSIDERATION AS PAR T OF A PILOT SYSTEM UNDER SUBPARAGRAPH (I) OF THIS 20
PARAGRAPH SHALL SUBM IT A COPY OF ITS PROPOSAL TO THE COMMISSION. 21
(C) (1) ON OR BEFORE DECEMBER 31, 2025, THE COMMISSION MAY 22
APPROVE, APPROVE WITH MODIFIC ATIONS, OR REJECT A PROPOSAL . 23
(2) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION , IF THE 24
COMMISSION DETERMINES THAT A PROPOSAL IS IN THE PUBLIC INTERE ST, THE 25
COMMISSION SHALL APPR OVE THE PROPOSAL . 26
(3) IN DETERMINING WHETHE R TO APPROVE , APPROVE WITH 27
MODIFICATIONS , OR REJECT A PROPOSAL , THE COMMISSION SHAL L: 28
(I) CONSIDER THE PROJECT ED COSTS AND BENEFIT S OF THE 29
PROJECTS PROPOSED FO R INCLUSION IN THE P ILOT SYSTEM BY USING A TEST THAT 30
INCLUDES: 31 HOUSE BILL 397 9
1. SOCIETAL COSTS AND B ENEFITS; AND 1
2. AVOIDED ENERGY AND INFRASTRU CTURE 2
INVESTMENTS ; 3
(II) DETERMIN E WHETHER THE PILOT SYSTEM IS IN THE PUBLIC 4
INTEREST AND IN THE INTEREST OF RATEPAYE RS; 5
(III) DETERMINE HOW EACH P ILOT SYSTEM’S PERFORMANCE 6
WILL BE EVALUATED DURING THE PILOT SYSTEM’S DURATION; AND 7
(IV) ENSURE THAT EACH PILOT SYSTEM: 8
1. HAS A PROVISION FOR CUSTOMERS WHO MAY WI SH TO 9
OPT OUT DURING THE C OURSE OF THE PILOT PERIOD; AND 10
2. DETAILS RATEPAYER IM PACTS FOR PILOT SYST EM 11
PARTICIPANTS AND ALL CUSTOMERS IN THE GAS COMPANY’S SERVICE TERRITORY . 12
(4) (I) EXCEPT AS PROVIDE D IN SUBPARAGRAPH (II) OF THIS 13
PARAGRAPH , EACH GAS COMPANY SHALL COMPLETE CONSTRUCTIO N OF A PILOT 14
SYSTEM WITHIN 1 YEAR AFTER THE COMMISSION APPROVES T HE SYSTEM. 15
(II) THE COMMISSION MAY EXTEND THE DEADLINE UNDER 16
SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R GOOD CAUSE SHOWN . 17
(5) IF THE COMMISSION APPROVES A PROPOSAL WITH 18
MODIFICATIONS , THE COMMISSION SHALL GIVE THE GAS COMPANY A RE ASONABLE 19
AMOUNT OF TIME TO MAKE THE NECESSARY M ODIFICATIONS. 20
(6) ON COMPLETION OF A PI LOT SYSTEM, THE GAS COMPANY SHAL L 21
FILE WITH THE COMMISSION FOR EVALUA TION ANY INFORMATION RELE VANT TO 22
THE CRITERIA ESTABLI SHED UNDER PARAGRAPH (3) OF THIS SUBSECTION . 23
(D) (1) EACH PILOT SYSTEM SHALL MEET THE REQUIREMENT S FOR 24
PILOT SYSTEMS UNDER THIS SUBTITLE FOR 2 YEARS AFTER THE PILOT SYSTEM IS 25
INITIATED. 26
(2) (I) ONCE THE 2–YEAR PERIOD UNDER PA RAGRAPH (1) OF THIS 27
SUBSECTION HAS PASSE D, THE COMMISSION, IN CONSULTATION WITH THE 28
ADMINISTRATION AND THE OFFICE OF PEOPLE’S COUNSEL, SHALL DETERMINE 29
WHETHER TO MAKE THE PILOT SYSTEM PERMANE NT. 30 10 HOUSE BILL 397
(II) A PILOT SYSTEM MADE PE RMANENT UNDER 1
SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL CONTINUE TO MEET THE 2
REQUIREMENTS PLACED ON PILOT SYSTEMS UNDER THIS S UBTITLE. 3
(E) (1) EACH GAS COMPANY IMPL EMENTING A PILOT SYSTEM SHALL 4
PARTICIPATE IN STAND ARDIZED DATA COLLECT ION COORDINATED BY THE 5
COMMISSION. 6
(2) ANY STANDARDIZED DATA COLLECTED UNDER PARA GRAPH (1) OF 7
THIS SUBSECTION SHAL L: 8
(I) BE FILED WITH THE COMMISSION BY THE APPROPRIATE 9
GAS COMPANY ; AND 10
(II) INCLUDE DATA FROM THE LEARNING FROM THE GROUND 11
UP AND ANY OTHER NATI ONAL RESEARCH PROJEC T FOR THE DEVELOPMEN T OF 12
THERMAL ENERGY NETWO RK SYSTEMS THAT THE COMMISSION CONSIDERS 13
APPROPRIATE . 14
(F) (1) THE ADMINISTRATION SHALL PROVIDE FUNDING IN T HE FORM OF 15
GRANTS TO COMMUNITY –BASED ORGANIZATIONS THAT PERFORM OUTREAC H IN 16
NEIGHBORHOODS TO INC REASE PARTICIPATION IN A PILOT SYSTEM AND 17
COORDINATE THE IMPLEMENTATION OF AN APPROVED PILOT SYSTEM. 18
(2) THE ADMINISTRATION MAY PR OVIDE UP TO $1,000,000 IN 19
FUNDING TO A COMMUNITY –BASED ORGANIZATION UNDER PARAGRAPH (1) OF THIS 20
SUBSECTION. 21
(3) FUNDING UNDER THIS SU BSECTION MAY BE PROVIDED ONLY 22
BEFORE OCTOBER 1, 2025. 23
(4) FUNDING UNDER THIS SUBSECTION MAY BE PROVIDED FROM THE 24
STRATEGIC ENERGY INVESTMENT FUND ESTABLISHED UNDE R § 9–20B–05 OF THE 25
STATE GOVERNMENT ARTICLE. 26
(G) (1) A GAS COMPANY MAY REQU EST APPROVAL FROM TH E 27
COMMISSION TO TRACK T HE COSTS OF DEVELOPING A PROPOSA L UNDER THIS 28
SECTION. 29
(2) A REQUEST UNDER PARAGR APH (1) OF THIS SUBSECTION S HALL 30
INCLUDE A PROPOSED D EVELOPMENT PLAN AND BUDGET. 31
HOUSE BILL 397 11
(3) THE COMMISSION SHALL APPR OVE A REQUEST UNDER 1
PARAGRAPH (1) OF THIS SUBSECTION O N FINDING THAT THE PROPOSED PLAN AND 2
COSTS ARE REASONABLE AND IN THE PUBLIC IN TEREST. 3
(4) AT A GAS COMPANY ’S NEXT RATE CASE PROCEEDING FOLLOWING 4
THE APPROVAL OF A RE QUEST UNDER THIS SUB SECTION, THE COMMISSION SHALL 5
AUTHORIZE RECOVERY O F PRUDENTLY INCURRED COSTS ASSOCIATED WIT H 6
DEVELOPING THE PROPO SAL AND ANY CARRYING COSTS T HAT THE COMMISSION 7
DETERMINES ARE APPROPRIATE . 8
7–1003. 9
(A) (1) THE ADMINISTRATION SHALL COORDINATE FUNDING SOURCES , 10
INCLUDING ALL AVAILA BLE FEDERAL FUNDING , PHILANTHROPIC FUNDIN G, 11
FUNDING AVAILABLE UN DER THE EMPOWER MARYLAND PROGRAM, AND 12
STRATEGIC ENERGY INVESTMENT FUND FUNDING ALLOCATE D TO ENERGY 13
EFFICIENCY, TO COVER THE COSTS FOR ALL BEHIND–THE–METER PROJECTS , 14
INCLUDING FULL ELECT RIFICATION AND WEATHERIZATION , ASSOCIATED WITH A 15
THERMAL ENERGY NETWO RK SYSTEM SO THAT ANY AFFECTED RESIDENTIAL 16
CUSTOMERS ARE NOT REQUIRED TO PAY FOR CONNECTION TO THE TH ERMAL 17
ENERGY NETWORK SYSTE M OR ANY APPLIANCE REPLAC EMENTS REQUIRED FOR 18
ELECTRIFICATION . 19
(2) UNLESS PRECLUDED BY FEDERAL LAW , REGULATION , OR 20
PROGRAM REQUIREMENT GUIDELINES, THE ADMINISTRATION SHALL RESERVE 21
$12,000,000 OF FEDERAL FUNDING FROM THE U.S. DEPARTMENT OF ENERGY TO 22
ENSURE ADEQUATE FUND ING FOR ANY APPLIANC ES INSTALLED IN CONNECTION 23
WITH A PILOT SYSTEM. 24
(3) THE ADMINISTRATION SHALL COORDINATE WITH THE 25
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO PROVID E 26
SERVICES OR FUNDING FOR WEATHERIZATION FOR A LL LOW OR MODERATE INCOME 27
HOUSING WITHIN THE PILOT SYS TEM’S AREA. 28
(4) IN PROVIDING FUNDING MADE AVAILAB LE UNDER THE FEDERAL 29
INFLATION REDUCTION ACT OF 2022 FOR BEHIND–THE–METER PROJECTS, THE 30
ADMINISTRATION SHALL GIVE PRIORITY TO LOW AND MODERATE INCOME HOUSING. 31
(B) THE MARYLAND ENVIRONMENTAL SERVICE: 32
(1) SHALL ISSUE PROCUREMENTS F OR BEHIND–THE–METER 33
PROJECTS RELATING TO ANY APPL IANCE OR PANEL REPLA CEMENTS OR UPGRADES 34
NECESSARY TO CONNECT TO A THERMAL ENERGY NETWORK SYSTE M AND OPERATE 35 12 HOUSE BILL 397
WITHOUT GAS; 1
(2) SHALL PROVIDE A PROCUREMEN T SUBMISSION WINDOW OF NOT 2
LESS THAN 90 DAYS; 3
(3) SHALL AWARD CONTRACTS IN A TIMELY MANNER ; AND 4
(4) MAY ENTER INTO A CON TRACT OR CONTRACTS F OR THE 5
PROCUREMENT . 6
(C) THE ADMINISTRATION AND THE MARYLAND ENVIRONMENTAL 7
SERVICE SHALL COORDIN ATE WITH GAS COMPANI ES TO ENSURE THAT 8
BEHIND–THE–METER PROJECTS CONNECT TO THERMAL E NERGY NETWORK 9
SYSTEMS THAT SERVE CUSTOMER S. 10
7–1004. 11
(A) FOR ANY FRONT –OF–METER PROJECTS RELAT ED TO THE 12
CONSTRUCTION OF ANY THERMAL ENERGY NETWO RK SYSTEM UNDER THIS 13
SUBTITLE, AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY SHALL: 14
(1) WORK WITH EMPLOYEES ALREADY UNDER CONTRACT WITH THE 15
COMPANY; OR 16
(2) USE QUALIFIED CONTRA CTORS THAT ABIDE BY A COMMUNITY 17
BENEFIT AGREEMENT . 18
(B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY SHALL 19
GIVE ITS EMPLOYEE BARGAINING UNIT AN OPPORTUNITY TO WO RK ON ANY 20
FRONT–OF–METER PROJECTS RELAT ED TO THE CONSTRUCTION OF ANY THERMAL 21
ENERGY NETWORK SYSTE M. 22
(C) ANY RESIDENTIAL ELECT RIFICATION OR EFFICI ENCY CONTRACTS 23
PROCURED BY THE MARYLAND ENVIRONMENTAL SERVICE SHALL BE SUBJECT TO A 24
COMMUNITY BENEFIT AG REEMENT. 25
(D) (1) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY 26
OPERATING A THERMAL ENERGY NETWO RK SYSTEM SHALL PROVIDE ITS EMPLOYEE 27
BARGAINING UNIT A N OPPORTUNITY TO PROVI DE MAINTENANCE AND O PERATIONS 28
FOR ANY THERMAL ENER GY NETWORK SYSTEM . 29
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , AN 30
ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY MAY CO NTRACT ANY 31 HOUSE BILL 397 13
WORK UNDER THIS SUBTITLE NOT CONDUCTED BY THE COMPANY’S EMPLOYEE 1
BARGAINING UNIT TO A QUALIFIED CONTRACTOR . 2
(II) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER 3
COMPANY SHALL REQUIRE A CONT RACTOR OR SUBCONTRAC TOR ON A PROJECT 4
UNDER THIS SUBTITLE TO: 5
1. PAY THE AREA PREVAI LING WAGE, INCLUDING WAGES 6
AND FRINGE BENEFITS ; 7
2. OFFER HEALTH CARE AN D RETIREMENT BENEFIT S TO 8
THE EMPLOYEES WORKIN G ON THE PROJECT ; 9
3. PARTICIPATE IN AN AP PRENTICESHIP PROGRAM 10
REGISTERED WITH THE STATE OR THE U.S. DEPARTMENT OF LABOR; 11
4. ESTABLISH AND EXECUTE A PLAN FOR OUTREACH , 12
RECRUITMENT , AND RETENTION OF STATE RESIDENTS TO PE RFORM WORK ON THE 13
PROJECT, WITH AN ASPIRATIONAL GOAL OF 25% OF TOTAL WORK HOURS 14
PERFORMED BY MARYLAND RESIDENTS , INCLUDING RESIDENTS WHO ARE: 15
A. RETURNING CIT IZENS; 16
B. WOMEN; 17
C. MINORITY INDIVIDUALS ; OR 18
D. VETERANS; 19
5. HAVE BEEN IN COMPLIA NCE WITH FEDERAL , STATE, 20
AND LOCAL WAGE AND H OUR LAWS FOR THE PRE VIOUS 3 YEARS; 21
6. BE SUBJECT TO ALL STATE REPORTING AND 22
COMPLIANCE REQUIREME NTS; AND 23
7. MAINTAIN ALL APPROPR IATE LICENSES IN GOO D 24
STANDING. 25
(E) (1) THE FINDINGS AND EVID ENCE RELIED ON BY TH E GENERAL 26
ASSEMBLY FOR THE CONT INUATION OF THE MINORITY BUSINESS ENTERPRISE 27
PROGRAM UNDER TITLE 14, SUBTITLE 3 OF THE STATE FINANCE AND 28
PROCUREME NT ARTICLE ARE INCORPORA TED IN THIS SUBSECTI ON. 29
14 HOUSE BILL 397
(2) TO THE EXTENT PRACTIC ABLE AND AUTHORIZED BY THE U. S. 1
CONSTITUTION, AN APPROVED PILOT SY STEM APPLICANT AND T HE MARYLAND 2
ENVIRONMENTAL SERVICE SHALL COMPLY WITH THE STATE’S MINORITY BUSINESS 3
ENTERPRISE PROGRAM. 4
(3) (I) WITHIN 6 MONTHS AFTER THE APP ROVAL OF A PILOT 5
SYSTEM UNDER § 7–1002(C) OF THIS SUBTITLE , THE GOVERNOR’S OFFICE OF 6
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS, IN CONSULTATION WITH THE 7
OFFICE OF THE ATTORNEY GENERAL AND THE GAS COMPANY OPERATING THE 8
APPROVED PILOT SYSTE M, SHALL ESTABLISH A CL EAR PLAN FOR SETTING 9
REASONABLE AND APPRO PRIATE MINORITY BUSI NESS ENTERPRISE PART ICIPATION 10
GOALS AND PROCEDURES FOR THE PILOT SYSTEM. 11
(II) TO THE EXTENT PRACTIC ABLE, THE GOALS AND 12
PROCEDURES SPEC IFIED IN SUBPARAGRAP H (I) OF THIS PARAGRAPH SH ALL BE 13
BASED ON THE REQUIRE MENTS OF TITLE 14, SUBTITLE 7 OF THE STATE FINANCE 14
AND PROCUREMENT ARTICLE AND THE REGUL ATIONS IMPLEMENTING THAT 15
SUBTITLE. 16
(4) (I) A GAS COMPANY OPERATIN G A PILOT SYSTEM AND THE 17
MARYLAND ENVIRONMENTAL SERVICE SHALL SUBMIT AN ANNUAL REPORT O N 18
MINORITY ENTERPRISE PARTICIPATION TO THE COMMISSION. 19
(II) THE COMMISSION SHALL PROV IDE ANY REPORTS 20
RECEIVED UNDER SUBPA RAGRAPH (I) OF THIS PARAGRAPH TO THE GENERAL 21
ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE. 22
7–1005. 23
(A) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY 24
OWN, MANAGE, AND RECOVER COSTS AS SOCIATED WITH A THER MAL ENERGY 25
NETWORK SYSTEM SUBJE CT TO THE APPROVAL O F THE COMMISSION. 26
(B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY 27
DRILL A GEOTHERMAL BOREHOLE IN A PUBLIC UTILITY RIGHT–OF–WAY WHERE 28
FEASIBLE TO MEET THE REQUIREMENTS OF THIS SUBTITLE. 29
7–1006. 30
THE COMMISSION MAY RETAIN INDEPENDENT CONSULTA NTS AND EXPERTS 31
TO: 32
(1) ASSIST THE COMMISSION WITH ITS EVALUATION OF PILOT 33 HOUSE BILL 397 15
SYSTEM APPLICATIONS UNDER § 7–1002(C) OF THIS SUBTITLE; AND 1
(2) SUPPORT THE COMMISSION IN THE COMPLETION OF ANY 2
REQUIREMENTS UNDER T HIS SUBTITLE. 3
Article – Environment 4
1–701. 5
(a) (1) In this section the following words have the meanings indicated. 6
(7) “Overburdened community” means any census tract for which three or 7
more of the following environmental health indicators are above the 75th percentile 8
statewide: 9
(i) Particulate matter (PM) 2.5; 10
(ii) Ozone; 11
(iii) National Air Toxics Assessment (NATA) diesel PM; 12
(iv) NATA cancer risk; 13
(v) NATA respiratory hazard index; 14
(vi) Traffic proximity; 15
(vii) Lead paint indicator; 16
(viii) National Priorities List Superfund site proximity; 17
(ix) Risk Management Plan facility proximity; 18
(x) Hazardous waste proximity; 19
(xi) Wastewater discharge indicator; 20
(xii) Proximity to a Concentrated Animal Feeding Operation (CAFO); 21
(xiii) Percent of the population lacking broadband coverage; 22
(xiv) Asthma emergency room discharges; 23
(xv) Myocardial infarction discharges; 24
(xvi) Low–birth–weight infants; 25
16 HOUSE BILL 397
(xvii) Proximity to emitting power plants; 1
(xviii) Proximity to a Toxic Release Inventory (TRI) facility; 2
(xix) Proximity to a brownfields site; 3
(xx) Proximity to mining operations; and 4
(xxi) Proximity to a hazardous waste landfill. 5
(8) “Underserved community” means any census tract in which, according 6
to the most recent U.S. Census Bureau Survey: 7
(i) At least 25% of the residents qualify as low–income; 8
(ii) At least 50% of the residents identify as nonwhite; or 9
(iii) At least 15% of the residents have limited English proficiency. 10
Article – Housing and Community Development 11
4–1801. 12
(a) In this subtitle the following words have the meanings indicated. 13
(c) “Area median income” means the median household income for the area 14
adjusted for household size as published and annually updated by the United States 15
Department of Housing and Urban Development. 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
1, 2024. 18