Maryland 2024 2024 Regular Session

Maryland House Bill HB397 Enrolled / Bill

Filed 04/08/2024

                     
 
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. 
         Italics indicate opposite chamber/conference committee amendments. 
          *hb0397*  
  
HOUSE BILL 397 
M5, C5, P2   	(4lr0652) 
ENROLLED BILL 
— Economic Matters/Education, Energy, and the Environment — 
Introduced by Delegate Charkoudian 
 
Read and Examined by Proofreaders: 
 
_______________________________________________ 
Proofreader. 
_______________________________________________ 
Proofreader. 
 
Sealed with the Great Seal and presented to the Governor, for his approval this 
  
_______ day of _______________ at ________________________ o’clock, ________M. 
  
______________________________________________ 
Speaker.  
 
CHAPTER ______ 
 
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 certain gas company companies and authorizing certain 5 
gas companies to develop a plan for a pilot thermal energy network system or 6 
systems on or before a certain date; requiring each certain gas company companies 7 
to submit a certain proposal or proposals to the Public Service Commission for 8 
approval on or before a certain date; authorizing a municipal corporation, county, or 9 
community organization to submit neighborhoods to gas companies for consideration 10 
as part of a pilot system; establishing requirements and authorizations for the 11 
development and implementation of a proposal and thermal energy network system; 12 
requiring authorizing the Commission to approve, approve with modifications, or 13 
reject each proposal on or before a certain date; requiring the Commission, in 14 
consultation with the Maryland Energy Administration and, the Office of People’s 15  2 	HOUSE BILL 397  
 
 
Counsel, a certain company, a certain certified representative, and certain 1 
customers, to make a determination on whether to make a pilot system permanent 2 
after the completion of the pilot system’s pilot period; establishing funding 3 
requirements for the Administration to cover assist certain companies in covering 4 
certain costs; providing for the payment and recovery of certain costs; requiring the 5 
Administration to coordinate with the Department of Housing and Community 6 
Development to provide certain services or funding; requiring the Maryland 7 
Environmental Service to issue certain procurements for certain projects a gas 8 
company to be responsible for certain costs associated with certain 9 
behind–the–meter projects; establishing certain employment and wage 10 
requirements for certain projects; and generally relating to thermal energy network 11 
systems. 12 
 
BY repealing and reenacting, without amendments, 13 
 Article – Public Utilities 14 
Section 7–703(f)(1) 15 
 Annotated Code of Maryland 16 
 (2020 Replacement Volume and 2023 Supplement) 17 
 
BY adding to 18 
 Article – Public Utilities 19 
Section 7–1001 through 7–1006 to be under the new subtitle “Subtitle 10. Thermal 20 
Energy Network Systems” 21 
 Annotated Code of Maryland 22 
 (2020 Replacement Volume and 2023 Supplement) 23 
 
BY repealing and reenacting, without amendments, 24 
 Article – Environnent Environment 25 
Section 1–701(a)(1), (7), and (8) 26 
 Annotated Code of Maryland 27 
 (2013 Replacement Volume and 2023 Supplement) 28 
 
BY repealing and reenacting, without amendments, 29 
 Article – Housing and Community Development 30 
Section 4–1801(a) and (c) 31 
 Annotated Code of Maryland 32 
 (2019 Replacement Volume and 2023 Supplement) 33 
 
 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 34 
That the Laws of Maryland read as follows: 35 
 
Article – Public Utilities 36 
 
7–703. 37 
 
 (f) (1) (i) In this subsection the following words have the meanings 38 
indicated. 39   	HOUSE BILL 397 	3 
 
 
 
 (ii) “Area median income” has the meaning stated in § 4–1801 of the 1 
Housing and Community Development Article. 2 
 
 (iii) “Low or moderate income housing” means housing that is 3 
affordable for a household with an aggregate annual income that is below 120% of the area 4 
median income. 5 
 
SUBTITLE 10. THERMAL ENERGY NETWORK SYSTEMS. 6 
 
7–1001. 7 
 
 (A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 8 
INDICATED. 9 
 
 (B) “ADMINISTRATION ” MEANS THE MARYLAND ENERGY 10 
ADMINISTRATION . 11 
 
 (C) “BEHIND–THE–METER PROJECT ” MEANS A PROJECT THAT INVOLVES A 12 
PHYSICAL, OPERATIONAL , OR BEHAVIORAL MODIFI CATION ON THE CUSTOM ER SIDE 13 
OF A UTILITY METER , INCLUDING REPLA CEMENT OF APPLIANCES , RETROFITS, AND 14 
PANEL UPGRADES . 15 
 
 (D) “COMMUNITY BENEFIT AGR EEMENT” MEANS AN AGREEMENT 16 
APPLICABLE TO THE CO NSTRUCTION OF ANY TH ERMAL ENERGY NETWORK SYSTEM 17 
AND ANY ACCOMPANYING RESIDENTIAL ELECTRIF ICATION THAT: 18 
 
 (1) PROMOTES INCREASED OPPORTUNITIES FOR LO CAL BUSINESSES 19 
AND SMALL, MINORITY, WOMEN–OWNED, AND VETERAN –OWNED BUSINESSES IN THE 20 
CLEAN ENERGY INDUSTR Y; 21 
 
 (2) ENSURES THE TIMELY , SAFE, AND EFFICIENT COMPLE TION OF 22 
THE PROJECT BY : 23 
 
 (I) FACILITATING A STEAD Y SUPPLY OF HIGHLY S KILLED 24 
CRAFT WORKERS WHO SH ALL BE PAID NOT LESS THAN THE PREVAILING WAGE RATE 25 
DETERMINED BY THE COMMISSIONER OF LABOR AND INDUSTRY UNDER TITLE 17, 26 
SUBTITLE 2 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; AND 27 
 
 (II) GUARANTEEING THAT TH	E CONSTRUCTION WORK 28 
PERFORMED IN CONNECTI ON WITH THE PROJECT WILL BE SUBJECT TO A N 29 
AGREEMENT THAT : 30 
  4 	HOUSE BILL 397  
 
 
 1. ESTABLISHES THE TERM S AND CONDITIONS OF 1 
EMPLOYMENT AT THE CO NSTRUCTION SITE OF T HE PROJECT OR A PORT ION OF THE 2 
PROJECT; 3 
 
 2. GUARANTEES AGAINST S TRIKES, LOCKOUTS, AND 4 
SIMILAR DISRUPTIONS ; 5 
 
 3. ENSURES THAT ALL WOR K ON THE PROJECT FUL LY 6 
CONFORMS TO ALL RELE VANT STATE AND FEDERAL LAW S, RULES, AND 7 
REGULATIONS , INCLUDING ALL REQUIR ED TRAINING FOR EMPL OYEES; 8 
 
 4. CREATES MUTUALLY BIN DING PROCEDURES FOR 9 
RESOLVING LABOR DISPUTES ARISING DUR ING THE TERM OF THE PROJECT; 10 
 
 5. SETS FORTH OTHER MEC	HANISMS FOR 11 
LABOR–MANAGEMENT COOPERATI ON ON MATTERS OF MUT UAL INTEREST AND 12 
CONCERN, INCLUDING PRODUCTIVI TY, QUALITY OF WORK , SAFETY, AND HEALTH ; 13 
AND 14 
 
 6. BINDS ALL CONTRACTOR S AND SUBCONTRACTORS T O 15 
THE TERMS OF THE AGR EEMENT THROUGH THE I NCLUSION OF APPROPRI ATE 16 
PROVISIONS IN ALL RE LEVANT SOLICITATION AND CONTRACT DOCUMEN TS; 17 
 
 (3) PROMOTES SAFE COMPLE TION OF THE PROJECT BY ENSURING 18 
THAT AT LEAST 80% OF THE CRAFT WORKERS ON THE PROJECT HAVE COMPLET ED 19 
AN OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION 10–HOUR COURSE ; 20 
 
 (4) PROMOTES CAREER TRAI NING OPPORTUNITIES I N THE 21 
MANUFACTURING , MAINTENANCE , AND CONSTRUCTION IND USTRIES FOR LOCAL 22 
RESIDENTS, VETERANS, WOMEN, MINORITIES, AND FORME RLY INCARCERATED 23 
INDIVIDUALS; 24 
 
 (5) INCLUDES PROVISIONS FOR LOCAL HIRING AND THE HIRING OF 25 
HISTORICALLY DISADVA NTAGED GROUPS ; 26 
 
 (6) REFLECTS A 21ST–CENTURY LABOR –MANAGEMENT APPROACH BY 27 
DEVELOPERS AND SUPPL IERS BASED ON COOPER ATION, HARMONY, AND 28 
PARTNERSH IP THAT PROACTIVELY SEEKS TO ENSURE THAT WORKERS CAN FREELY 29 
CHOOSE TO BOTH ORGAN IZE AND COLLECTIVELY BARGAIN; 30 
 
 (7) USES LOCALLY , SUSTAINABLY, AND DOMESTICALLY 31 
MANUFACTURED CONSTRU CTION MATERIALS AND COMPONENTS TO THE EX TENT 32 
PRACTICABLE ; 33 
   	HOUSE BILL 397 	5 
 
 
 (8) (7) PROMOTES THE USE OF 	SKILLED LOCAL LABOR , 1 
PARTICULARLY WITH RE GARD TO THE CONSTRUC TION AND MANUFACTURI NG 2 
COMPONENTS OF THE PR OJECT, USING METHODS INCLUD ING OUTREACH , HIRING, 3 
OR REFERRAL METHODS 	THAT ARE AFFILIATED 	WITH REGISTERED 4 
APPRENTICESHIP PROGR AMS UNDER TITLE 11, SUBTITLE 4 OF THE LABOR AND 5 
EMPLOYMENT ARTICLE; AND 6 
 
 (9) (8) AUTHORIZES THE MARYLAND DEPARTMENT OF LABOR AND 7 
THE COMMISSION TO CONSIDE R, REVIEW, AND ENFORCE A PUBLIC SERVICE 8 
COMPANY’S COMPLIANCE WITH AN Y COMMUNITY BENEFIT AGREEMENT . 9 
 
 (E) “FINANCING PROGRAM” MEANS THE ENERGY INFRASTRUCTURE 10 
REINVESTMENT CATEGORY OF THE TITLE 17 CLEAN ENERGY FINANCING PROGRAM.  11 
 
 (E) (F) “FRONT–OF–METER PROJECT ” MEANS A PROJECT THAT IMPACTS 12 
THE UTILITY SIDE OF A METER. 13 
 
 (F) (G) “GEOTHERMAL BOREHOLE ” MEANS A GEOTHERMAL SHAFT 14 
DRILLED INTO THE EAR TH FOR USE IN A SYST EM THAT USES THE THE RMAL 15 
PROPERTIES OF THE EA RTH OR GROUNDWATER T O HEAT OR COOL BUILD INGS. 16 
 
 (H) “GREENHOUSE GAS REDUCTION FUND” MEANS THE GREENHOUSE GAS 17 
REDUCTION FUND UNDER THE FEDERA L INFLATION REDUCTION ACT OF 2022.  18 
 
 (G) (I) “LEARNING FROM THE GROUND UP” MEANS THE LEARNING 19 
FROM THE GROUND UP RESEARCH TEAM FORM ED BY THE HOME ENERGY 20 
EFFICIENCY TEAM. 21 
 
 (H) (J) “LOW OR MODERATE INCOM E HOUSING” HAS THE MEANING 22 
STATED IN § 7–703(F)(1)(III) OF THIS TITLE. 23 
 
 (I) (K) “PILOT SYSTEM” MEANS A PILOT THERMA L ENERGY NETWORK 24 
SYSTEM DEVELOPED BY A GAS COMPANY TO REP LACE GAS INFRASTRUCT URE WITH 25 
A THERMAL ENERGY NET WORK SYSTEM . 26 
 
 (J) (L) “PJM CAPACITY MARKET ” MEANS THE CAPACITY M ARKET OF 27 
PJM INTERCONNECTION , LLC OR ANY SUCCESSOR ORG ANIZATION THAT SERVI CES 28 
THE PJM REGION. 29 
 
 (K) (M) “THERMAL ENERGY NETWOR K SYSTEM” MEANS A SYSTEM : 30 
 
 (1) OF CLOSED LOOP UNDER GROUND PIPING INFRAS TRUCTURE, 31 
INCLUDING GEOTHERMAL BOREHOLES , LEADING UP TO A UTIL ITY METER FOR THE 32  6 	HOUSE BILL 397  
 
 
CONVEYANCE OR STORAG E OF RENEWABLE , NONGREENHOUSE GAS –EMITTING 1 
THERMAL ENERGY ; AND 2 
 
 (2) THAT CREATES A NETWO RK OF CUSTOMERS WITH THERMAL 3 
ENERGY FOR HEATING A ND COOLING THROUGH N ONCOMBUSTING ELECTRI C HEAT 4 
PUMPS. 5 
 
7–1002. 6 
 
 (A) (1) (I) ON OR BEFORE OCTOBER 1, 2024, EACH GAS COMPANY 7 
THAT SERVES AT LEAST 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY 8 
SHALL: 9 
 
 (I) 1. BEGIN TO DEVELOP A P LAN FOR A PILOT SYST EM OR 10 
SYSTEMS; AND 11 
 
 (II) 2. FILE NOTICE WITH THE COMMISSION THAT THE 12 
COMPANY HAS BEGUN PL AN DEVELOPM ENT. 13 
 
 (II) ON OR BEFORE OCTOBER 1, 2024, A GAS COMPANY THAT 14 
SERVES FEWER THAN 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY MAY 15 
DEVELOP A PLAN FOR A PILOT SYSTEM OR SYST EMS IN ACCORDANCE WI TH THE 16 
REQUIREMENTS OF THIS SECTION.  17 
 
 (2) IN DEVELOPING A PLAN FOR A PILOT SYS TEM, A GAS COMPANY 18 
SHALL COORDINATE WIT H COMMUNITY GROUPS , LOCAL GOVERNMENTS , ANY 19 
CERTIFIED REPRESENTA TIVES OF THE EMPLOYE ES OF THE GAS COMPAN Y, THE 20 
COMMISSION, THE ADMINISTRATION , AND ANY OTHER GROUPS THE GAS COMPANY 21 
CONSIDERS NECESSAR Y TO ALLOW FOR DIVER SE DESIGN AMONG PILO T SYSTEMS. 22 
 
 (3) EACH GAS COMPANY SHAL L INCLUDE IN THE NOT ICE FILED 23 
UNDER PARAGRAPH (1) OF THIS SUBSECTION : 24 
 
 (I) DETAILS OF ANY COORD INATION WITH COMMUNI TY 25 
GROUPS, LOCAL GOVERNMENTS , CERTIFIED REPRESENTA TIVES OF THE 26 
EMPLOYEES OF THE GAS COMPANY, THE COMMISSION, THE ADMINISTRATION , AND 27 
ANY OTHER GROUPS THE GAS COMPANY CONSIDER S NECESSARY TO ALLOW FOR 28 
DIVERSE DESIGN AMONG PILOT SYSTEMS; AND 29 
 
 (II) ANY LETTERS OF SUPPO RT FROM INTERESTED G ROUPS. 30 
 
 (B) (1) (I) ON OR BEFORE JULY 1, 2025, EACH GAS COMPANY THAT 31 
SERVES AT LEAST 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY SHALL 32   	HOUSE BILL 397 	7 
 
 
SUBMIT EITHER ONE OR TWO PROPOSALS FOR A PILOT SYSTEM TO THE COMMISSION 1 
FOR APPROVAL . 2 
 
 (II) A GAS COMPANY THAT SER VES FEWER THAN 75,000 3 
CUSTOMERS IN ITS DISTRIBU TION TERRITORY MAY S UBMIT A PROPOSAL FOR A 4 
PILOT SYSTEM TO THE COMMISSION AFTER PROV IDING AT LEAST 60 DAYS’ NOTICE 5 
TO THE COMMISSION OF THE COM PANY’S INTENT TO FILE A P ROPOSAL.  6 
 
 (2) A PROPOSAL FOR A PILOT SYSTEM SHALL ENSURE THAT AT LEAST 7 
80% OF ITS CUSTOMERS ARE FROM LOW OR MODERATE INCOME HOUSING . 8 
 
 (3) A CUSTOMER MAY CHOOSE TO OPT OUT OF A PILO T SYSTEM 9 
BEFORE THE PROPOSAL FOR THE PILOT SYSTEM IS SUBMITTED. 10 
 
 (4) EACH PROPOSAL FOR A P ILOT SYSTEM SHALL DE MONSTRATE 11 
THAT THE GAS COMP ANY HAS SOUGHT ACCESS TO OBTAINED, OR IS REASONABLY 12 
CERTAIN TO OBTAIN , ANY AVAILABLE FEDERA L FUNDING IN THE FOR M OF A MATCH, 13 
GRANT, LOAN, OR TAX CREDIT , INCLUDING THOSE ESTA BLISHED UNDER THE 14 
ENERGY INFRASTRUCTURE REINVESTMENT CATEGORY OF THE TITLE 17 CLEAN 15 
ENERGY FINANCING PROGRAM AND THE GREENHOUSE GAS REDUCTION FUND 16 
UNDER THE FEDERAL INFLATION REDUCTION ACT OF 2022. 17 
 
 (5) EACH GAS COMPANY IS R ESPONSIBLE FOR ENSUR ING THAT EACH 18 
PROPOSAL SUBMITTED B Y THE GAS COMPANY CO MPLIES WITH ALL APPL ICABLE 19 
FEDERAL STAT UTES, REGULATIONS , AND GUIDANCE RELATIN G TO ANY FEDERAL 20 
FUNDING. 21 
 
 (6) EACH PROPOSAL SHALL A DDRESS: 22 
 
 (I) HOW THE PILOT SYSTEM WILL DEVELOP USEFUL 23 
INFORMATION FOR THE ADOPTION OF REGULATI ONS GOVERNING THERMA L 24 
ENERGY NETWORK SYSTE MS; 25 
 
 (II) HOW THE PIL OT SYSTEM FURTHERS G REENHOUSE GAS 26 
EMISSIONS REDUCTION GOALS; 27 
 
 (III) HOW THE PILOT SYSTEM ADVANCES FINANCIAL A ND 28 
TECHNICAL APPROACHES TO EQUITABLE AND AFF	ORDABLE BUILDING 29 
ELECTRIFICATION ; 30 
 
 (IV) HOW THE PILOT SYSTEM CREATES BENEFITS TO ITS 31 
CUSTOMERS , EMPLOYEES, AND SOCIETY AT LARGE , INCLUDING PUBLIC HEA LTH 32 
BENEFITS, QUALITY JOB RETENTIO N OR CREATION , RELIABILITY, AND INCREASED 33 
AFFORDABILITY OF REN EWABLE THERMAL ENERG Y OPTIONS; 34  8 	HOUSE BILL 397  
 
 
 
 (V) HOW THE PILOT SYSTEM CONTRIBUTES TO AVOID ING COSTS 1 
TO ELECTRIC DISTR IBUTION AND TRANSMIS SION SYSTEMS THAT WO ULD 2 
OTHERWISE BE REQUIRE D FOR ELECTRIFICATIO N BY COMPARING THE P ROPOSED 3 
SYSTEM TO THE COST O F ELECTRIFICATION US ING THE MOST WIDELY 4 
COMMERCIALLY AVAILAB LE AIR–SOURCE HEAT PUMPS ; 5 
 
 (VI) HOW THE PILOT SYSTEM CONTRIBU TES TO AVOIDING COST S 6 
RELATED TO GAS PIPE REPLACEMENT ; 7 
 
 (VII) THE EXTENT TO WHICH THE PROPOSAL GIVES P RIORITY TO 8 
UNDERSERVED OR OVERB URDENED COMMUNITIES AS DEFINED IN § 1–701(A) OF 9 
THE ENVIRONMENT ARTICLE; 10 
 
 (VIII) THE PILOT SYSTEM ’S ABILITY TO BID DE MAND REDUCTION 11 
INTO THE PJM CAPACITY MARKET ; 12 
 
 (IX) NEIGHBORHOODS AT THE END POINT OF A GAS S YSTEM 13 
WHERE A FULL TRANSIT ION FROM GAS SYSTEMS TO ELECTRIFICATION C OULD BE 14 
FACILITATED WITHIN T HE PILOT PERIOD OR W ITHIN 5 YEARS AFTER THE PILO T 15 
PERIOD CONCLUDES ; 16 
 
 (X) SAFETY; 17 
 
 (XI) RELIABILITY; 18 
 
 (XII) ENVIRONMENTAL ACCEPT ABILITY OF THE FLUID 19 
TECHNOLOGY EMPLOYED ; 20 
 
 (XIII) OPERATIONS; 21 
 
 (XIV) MAINTENANCE ; 22 
 
 (XV) CUSTOMER COMPLAINT R ESOLUTION; 23 
 
 (XVI) EMERGENCY RESPONSE ; 24 
 
 (XVII) POINTS OF INTERCONNECTION BETW EEN THE GAS 25 
COMPANY AND HOMEOWNE R FOR ANY FLUID TRAN SFER; 26 
 
 (XVIII) TECHNOLOGY TO BE USE D TO SHUT OFF FLUID FLOW 27 
TO CUSTOMERS ; 28 
   	HOUSE BILL 397 	9 
 
 
 (XIX) CUSTOMER SERVICE TER MINATION IN THE EVEN T OF BILL 1 
NONPAYMENT ; 2 
 
 (XX) LIFE EXPECTANCY OF T HE GEOTHERMAL SYSTEM ; AND  3 
 
 (XXI) THE EXTENT TO WHICH THE PROPOSAL IS COST –EFFECTIVE 4 
FOR RATEPAYERS ; AND  5 
 
 (XXI) (XXII) ANY OTHER REQUIREMEN TS AS DETERMINED BY THE 6 
COMMISSION. 7 
 
 (7) EACH PROPOSAL SHALL I NCLUDE: 8 
 
 (I) A PROPOSED RATE STRU CTURE FOR THE PILOT SYSTEM 9 
THAT ENSURES IS PROJECTED TO ENSU RE THAT ANY CUSTOMER PA RTICIPATING IN 10 
THE PILOT SYSTEM DOE S NOT PAY MORE FOR U TILITIES THAN IF THE CUSTOMER 11 
HAD NOT PARTICIPATED ; AND 12 
 
 (II) A PROPOSED SET OF ME ASUREMENTS OF ENERGY UNITS 13 
AND ACCOUNTING STAND ARDS. 14 
 
 (8) (I) A MUNICIPAL CORPORATIO N, 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 CORPORATIO N, 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 PRO POSAL TO THE COMMISSION. 21 
 
 (C) (1) ON OR BEFORE DECEMBER 31, 2025, THE COMMISSION MAY 22 
SHALL MAY 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 I N THE PUBLIC INTERES T AND IS 25 
COST–EFFECTIVE, THE COMMISSION SHALL MAY APPROVE, APPROVE WITH 26 
MODIFICATIONS , OR REJECT THE PROPOSAL . 27 
 
 (3) (I) IN DETERMINING WHETHE R TO APPROVE , APPROVE WITH 28 
MODIFICATIONS , OR REJECT A PROPOSAL , THE COMMISSION SHALL : 29 
 
 (I) 1. CONSIDER THE PROJECT ED COSTS AND BENEFIT S OF 30 
THE PROJECTS PROPOSE D FOR INCLUSION IN THE PIL OT SYSTEM BY USING A TEST 31 
THAT INCLUDES : 32  10 	HOUSE BILL 397  
 
 
 
 1. A. SOCIETAL COSTS AND B ENEFITS; AND 1 
 
 2. B. AVOIDED ENERGY AND I	NFRASTRUCTURE 2 
INVESTMENTS ; 3 
 
 (II) 2. DETERMINE WHETHER TH E PILOT SYSTEM IS IN THE 4 
PUBLIC INTEREST AND IN THE INTEREST OF RATEPAYERS ; 5 
 
 (III) 3. DETERMINE HOW EACH P	ILOT SYSTEM ’S 6 
PERFORMANCE WILL BE EVALUATED DURING THE PILOT SYSTEM’S DURATION; AND 7 
 
 (IV) 4. ENSURE THAT EACH PIL OT SYSTEM: 8 
 
 1. A. HAS A PROVISION FOR CUSTOMERS WHO MAY WI SH TO 9 
OPT OUT DURING THE C OURSE OF THE PILOT PERIO D; AND 10 
 
 2. B. DETAILS RATEPAYER IM PACTS FOR PILOT SYST EM 11 
PARTICIPANTS AND ALL CUSTOMERS IN THE GAS COMPANY’S SERVICE TERRITORY ; 12 
AND  13 
 
 5. DETERMINE WHETHER TH	E PROPOSAL IS 14 
COST–EFFECTIVE IN ACCORDA NCE WITH SUBPARAGRAP H (II) OF THIS PARAGRAPH . 15 
 
 (II) A PROPOSAL UNDER THIS SECTION IS COST –EFFECTIVE IF 16 
THE COMMISSION DETERMINES THAT: 17 
 
 1. THE PROJECTED BENEFI TS ARE GREATER THAN THE 18 
PROJECTED COSTS FOR ALL RATEPAYERS IN TH E GAS COMPANY ’S SERVICE 19 
TERRITORY; 20 
 
 2. THE GAS COMPANY HAS 	OBTAINED, OR IS 21 
REASONABLY CERTAIN T O OBTAIN, FEDERAL FUNDING UNDE R THE FINANCING 22 
PROGRAM OR THE GREENHOUSE GAS REDUCTION FUND TO SUPPORT THE C OSTS 23 
OF A PILOT SYSTEM ; AND  24 
 
 3. THE FEDERAL FUNDING THAT THE GAS COMPANY HAS 25 
OBTAINED, OR IS REASONABLY CERT AIN TO OBTAIN, TO SUPPORT THE COSTS OF A 26 
PILOT SYSTEM WOULD N OT BE MORE COST –EFFECTIVE IN MEETING OTHER 27 
GREENHOUSE GAS REDUC TION OR ELECTRIFICAT ION MEASURES IN THE STATE. 28 
 
 (4) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS 29 
PARAGRAPH , EACH GAS COMPANY SHA LL COMPLETE CONSTRUC TION OF A PILOT 30 
SYSTEM WITHIN 1 YEAR AFTER THE COMMISSION APPROVES T HE SYSTEM. 31   	HOUSE BILL 397 	11 
 
 
 
 (II) THE COMMISSION MAY EXTEND THE DEADLINE UNDER 1 
SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R GOOD CAUSE SHOWN . 2 
 
 (5) IF THE COMMISSION APPROVES A PROPOSAL WITH 3 
MODIFICATIONS , THE COMMISSION SHALL GIVE THE GAS COMPANY A RE ASONABLE 4 
AMOUNT OF TIME TO MA KE THE NECESSARY MOD IFICATIONS. 5 
 
 (6) ON COMPLETION OF A PI LOT SYSTEM, THE GAS COMPANY SHAL L 6 
FILE WITH THE COMMISSION FOR EVALUATION ANY INFOR MATION RELEVANT TO 7 
THE CRITERIA ESTABLI SHED UNDER PARAGRAPH (3) OF THIS SUBSECTION . 8 
 
 (D) (1) EACH PILOT SYSTEM SHA LL MEET THE REQUIREM ENTS FOR 9 
PILOT SYSTEMS UNDER THIS SUBTITLE FOR 2 YEARS AFTER THE PILO T SYSTEM IS 10 
INITIATED AND OPERAT IONAL. 11 
 
 (2) (I) ONCE THE 2–YEAR PERIOD UNDER PA RAGRAPH (1) OF THIS 12 
SUBSECTION HAS PASSE D, THE COMMISSION, IN CONSULTATION WITH THE 13 
ADMINISTRATION , AND THE OFFICE OF PEOPLE’S COUNSEL, THE ELECTRIC , GAS, 14 
OR WATER COMPANY THA T OWNS AND MANAGES T HE PILOT SYSTEM, A CERTIFIED 15 
REPRESENTATIVE OF TH E EMPLOYEES OF THE E LECTRIC COMPANY , GAS COMPANY , 16 
OR WATER COMPANY THA T OWNS AND MANAGES T HE PILOT SYSTEM , AND 17 
PARTICIPATING CUSTOM ERS, SHALL DETERMINE WHET HER TO MAKE THE PILO T 18 
SYSTEM PERMANENT . 19 
 
 (II) A PILOT SYSTEM MADE PERMANENT UNDER 20 
SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL CONTINUE TO MEET THE 21 
REQUIREMENTS PLACED ON PILOT SYSTEMS UND ER THIS SUBTITLE. 22 
 
 (III) IF A DETERMINATION IS MADE THAT A PILOT SY STEM WILL 23 
NOT BE MADE PERMANEN T UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE 24 
COMMISSION SHALL MAY APPROVE RECOVERY OF ALL PRUDENTLY INCURRED 25 
COSTS NECESSARY FOR A GAS COMPANY TO COM PLY WITH THE DETERMI NATION. 26 
 
 (3) THE COMMISSION SHALL ADOP T REGULATIONS ADDRES SING THE 27 
DECOMMISSIONING OR D ISCONTINUANCE OF A P ILOT SYSTEM, INCLUDING 28 
REGULATIONS ENSURING THAT THE CUSTOMERS W HO PARTICIPATED IN T HE PILOT 29 
SYSTEM DO NOT INCUR ADDITIONAL EXPENSES FOR THE DECOMMISSION ING OR 30 
INSTALLATION OF AN A PPLIANCE THAT IS USE D IN THE PILOT SYSTE M AND IS 31 
DECOMMISSIONED BEFOR E THE END OF ITS USEFUL LIFE.  32 
 
 (E) (1) EACH GAS COMPANY IMPL EMENTING A PILOT SYS TEM SHALL 33 
PARTICIPATE IN STAND ARDIZED DATA COLLECT ION COORDINATED BY T HE 34 
COMMISSION. 35  12 	HOUSE BILL 397  
 
 
 
 (2) ANY STANDARDIZED DATA COLLECTED UNDER PARA GRAPH (1) OF 1 
THIS SUBSECTION SHAL L: 2 
 
 (I) BE FILED WITH THE COMMISSION BY THE APP ROPRIATE 3 
GAS COMPANY ; AND 4 
 
 (II) INCLUDE DATA FROM TH E LEARNING FROM THE GROUND 5 
UP AND ANY OTHER NATI ONAL RESEARCH PROJEC T FOR THE DEVELOPMEN T OF 6 
THERMAL ENERGY NETWO RK SYSTEMS THAT THE COMMISSION CONSIDERS 7 
APPROPRIATE . 8 
 
 (F) (1) THE ADMINISTRATION SHALL PROVIDE FUNDING IN T HE FORM OF 9 
GRANTS TO COMMUNITY –BASED ORGANIZATIONS THAT PERFORM OUTREAC H IN 10 
NEIGHBORHOODS TO INC REASE PARTICIPATION IN A PILOT SYSTEM AN D 11 
COORDINATE THE IMPLE MENTATION OF AN APPR OVED PILOT SYSTEM . 12 
 
 (2) THE ADMINISTRATION MAY PR OVIDE UP TO $1,000,000 IN 13 
FUNDING TO A COMMUNI TY–BASED ORGANIZATION U NDER PARAGRAPH (1) OF THIS 14 
SUBSECTION. 15 
 
 (3) FUNDING UNDER THIS SU BSECTION MAY BE PROV IDED ONLY 16 
BEFORE OCTOBER 1, 2025. 17 
 
 (4) FUNDING UNDER THIS SU BSECTION MAY BE PROVIDED FROM THE 18 
STRATEGIC ENERGY INVESTMENT FUND ESTABLISHED UNDE R § 9–20B–05 OF THE 19 
STATE GOVERNMENT ARTICLE OR ANY OTHER SOURCE OF STATE OR FEDERAL 20 
FUNDING. 21 
 
 (G) (1) A GAS COMPANY MAY REQU	EST APPROVAL FROM TH E 22 
COMMISSION TO TRACK T HE COSTS OF DEVE LOPING A PROPOSAL UN DER THIS 23 
SECTION. 24 
 
 (2) A REQUEST UNDER PARAGR APH (1) OF THIS SUBSECTION S HALL 25 
INCLUDE A PROPOSED D EVELOPMENT PLAN AND BUDGET. 26 
 
 (3) THE COMMISSION SHALL APPR OVE A REQUEST UNDER 27 
PARAGRAPH (1) OF THIS SUBSECTION O N FINDING THAT THE P ROPOSED PLAN AND 28 
COSTS ARE NECESSARY TO MEET TH E REQUIREMENTS UNDER THIS SECTION, 29 
REASONABLE , AND IN THE PUBLIC INTEREST . 30 
 
 (4) AT A GAS COMPANY ’S NEXT RATE CASE PRO CEEDING FOLLOWING 31 
THE APPROVAL OF A RE QUEST UNDER THIS SUB SECTION, THE COMMISSION SHALL 32 
MAY AUTHORIZE RECOVERY O F PRUDENTLY INCURRED COSTS ASSOCIATED WIT H 33   	HOUSE BILL 397 	13 
 
 
DEVELOPING THE PROPO SAL AND ANY CARRYING COSTS THAT THE COMMISSION 1 
DETERMINES ARE APPRO PRIATE. 2 
 
7–1003. 3 
 
 (A) (1) (I) THE ADMINISTRATION SHALL COORDINATE FUNDING 4 
SOURCES, INCLUDING ALL AVAILA BLE FEDERAL FUNDING , PHILANTHROPIC 5 
FUNDING, FUNDING AVAILABLE UN DER THE EMPOWER MARYLAND PROGRAM, 6 
AND STRATEGIC ENERGY INVESTMENT FUND FUNDING ALLOCATE D TO ENERGY 7 
EFFICIENCY, TO COVER ASSIST AN ELECTRIC C OMPANY, A GAS COMPANY , OR A 8 
WATER COMPANY IN COV ERING THE COSTS FOR ALL BE HIND–THE–METER 9 
PROJECTS, INCLUDING FULL ELECT RIFICATION AND WEATHERIZATION , 10 
ASSOCIATED WITH A TH ERMAL ENERGY NETWORK SYSTEM SO THAT ANY A FFECTED 11 
RESIDENTIAL CUSTOMER S ARE NOT REQUIRED T O PAY FOR CONNECTION TO THE 12 
THERMAL ENERGY NETWO RK SYSTEM OR ANY APPLIA NCE REPLACEMENTS 13 
REQUIRED FOR ELECTRI FICATION. 14 
 
 (II) FUNDS FROM THE FEDERA L INFLATION REDUCTION ACT 15 
MAY NOT EXCEED :  16 
 
 1. $14,000 PER RESIDENTIAL UNIT ; AND  17 
 
 2. $9,000,000 IN TOTAL.  18 
 
 (2) (I) UNLESS PRECLUDED BY F EDERAL LAW , REGULATION , OR 19 
PROGRAM REQUIREMENT GUIDELINES, THE ADMINISTRATION SHALL RESERVE 20 
$12,000,000 $9,000,000 OF FEDERAL FUNDING F ROM THE U.S. DEPARTMENT OF 21 
ENERGY TO ENSURE ADEQ UATE FUNDING FOR ANY APPLIANCES INSTALLED IN 22 
CONNECTION WITH A PI LOT SYSTEM. 23 
 
 (II) FUNDS RESERVED UNDER SUBPARAGRAPH (I) OF THIS 24 
PARAGRAPH SHALL BE A LLOCATED NOT LATER T HAN DECEMBER 31, 2029 JUNE 30, 25 
2028, AND SPENT NOT LATER THAN DECEMBER 31, 2031 JUNE 30, 2030.  26 
 
 (3) THE ADMINISTRATION SHALL COORDINATE WITH THE 27 
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO PROVID E 28 
SERVICES OR FUNDING FOR WEATHERIZATION F OR ALL LOW OR MODERA TE INCOME 29 
HOUSING WITHIN THE P ILOT SYSTEM’S AREA. 30 
 
 (4) IN PROVIDING FUNDING MADE AVAILABLE UNDER THE FEDERAL 31 
INFLATION REDUCTION ACT OF 2022 FOR BEHIND–THE–METER PROJECTS , THE 32 
ADMINISTRATION SHALL GIVE PRIORITY TO LOW AND MODERATE INCOME HOUSING. 33 
  14 	HOUSE BILL 397  
 
 
 (B) THE MARYLAND ENVIRONMENTAL SERVICE A GAS COMPANY 1 
IMPLEMENTING A PILOT SYSTEM SHALL : 2 
 
 (1) SHALL ISSUE PROCUREM	ENTS BE RESPONSIBLE FOR 3 
CONSTRUCTION , INCLUDING ANY NECESS	ARY RENOVATIONS , FOR  4 
BEHIND–THE–METER PROJECTS RELAT ING TO ANY APPLIANCE OR PANEL 5 
REPLACEMENTS OR UPGR ADES NECESSARY TO CO NNECT TO A THERMAL E NERGY 6 
NETWORK SYSTEM AND O PERATE WITHOUT GAS; 7 
 
 (2) PURSUE ALL TAX CREDI TS AND FEDERAL FUNDI NG AVAILABLE 8 
FOR FRONT–OF–METER AND BEHIND –THE–METER PROJECTS ; AND 9 
 
 (3) COORDINATE WITH THE ADMINISTRATION TO ACC ESS FUNDS 10 
AVAILABLE UNDER THE FEDERAL INFLATION REDUCTION ACT, REBATES AND 11 
CREDITS AVAILABLE UN DER THE EMPOWER MARYLAND PROGRAM, AND ANY 12 
OTHER AVAILABLE FUNDS . 13 
 
 (C) (1) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY 14 
THAT OWNS AND MANAGE S A PILOT SYSTEM SHA LL PAY FOR ANY COST NOT COVERED 15 
BY THE FUNDS AND TAX CREDITS SPECIFIED IN SUBSECTIONS (A) AND (B) OF THIS 16 
SECTION. 17 
 
 (2) SUBJECT TO SUBSECTION (D) OF THIS SECTION , ANY COSTS 18 
INCURRED BY AN ELECT RIC COMPANY , A GAS COMPANY , OR A WATER COMPANY 19 
AFTER ALL FUNDS AND TAX CREDITS SPECIFIE D UNDER SUBSECTIONS (A) AND (B) 20 
OF THIS SECTION HAVE BEEN APPLIED MAY BE RECOVERED WITHIN 1 YEAR OF 21 
INCURRING THE COSTS THROUG H RATE ADJUSTMENTS O R ANOTHER MECHANISM 22 
APPROVED BY THE COMMISSION. 23 
 
 (D) IF AN ELECTRIC COMPAN Y, A GAS COMPANY , OR A WATER COMPANY I S 24 
REQUIRED TO OWN BEHI ND–THE–METER INFRASTRUCTURE FOR A SPECIFIED 25 
PERIOD OF TIME TO QU ALIFY FOR A FUNDI NG SOURCE SPECIFIED UNDER 26 
SUBSECTION (A)(1)(I) OF THIS SECTION: 27 
 
 (1) THE COST ASSOCIATED WITH THE BEHIND –THE–METER 28 
INFRASTRUCTURE SHALL BE RECOVERED WITHIN THE SPECIFIED OWNERS HIP 29 
PERIOD REQUIRED FOR THE FUNDING; 30 
 
 (2) THE ELECTRIC COMPANY , GAS COMPANY , OR WATER COMPANY 31 
SHALL MAINTAIN THE B EHIND–THE–METER INFRASTRUCTURE DURING THE 32 
SPECIFIED OWNERSHIP PERIOD REQUIRED FOR THE FUNDING; AND 33 
 
 (3) OWNERSHIP OF THE BEH IND–THE–METER INFRASTRUCTURE 34 
SHALL TRANSFER TO TH E ELECTRIC, GAS, OR WATER CUSTOMER WH O THE 35   	HOUSE BILL 397 	15 
 
 
INFRASTRUCTURE WAS I NSTALLED TO BENEFIT WHEN THE SPECIFIED O WNERSHIP 1 
PERIOD REQUIRED FOR THE FUNDING LAPSES . 2 
 
 (E) NOTHING IN THIS SECTI ON MAY BE CONSTRUED TO AUTHORIZE OR 3 
PROHIBIT AN ELECTRIC COMPANY, A GAS COMPANY , OR A WATER COMPANY F ROM 4 
RECOVERING COSTS OF BEHIND –THE–METER INFRASTRUCTURE THAT DOES NOT 5 
MEET THE REQUIREMENT S OF THIS SUBTITLE.  6 
 
 (2) SHALL PROVIDE A PROC UREMENT SUBMISSION W INDOW OF NOT 7 
LESS THAN 90 DAYS; 8 
 
 (3) SHALL AWARD CONTRACT S IN A TIMELY MANNER ; AND 9 
 
 (4) MAY ENTER INTO A CON TRACT OR CONTRACTS FO R THE 10 
PROCUREMENT . 11 
 
 (C) THE ADMINISTRATION AND TH E MARYLAND ENVIRONMENTAL 12 
SERVICE SHALL COORDIN ATE WITH GAS COMPANI ES TO ENSURE THAT 13 
BEHIND–THE–METER PROJECTS CONNE CT TO THERMAL ENERGY NETWORK 14 
SYSTEMS THAT SERVE C USTOMERS. 15 
 
7–1004. 16 
 
 (A) FOR ANY FRONT –OF–METER OR BEHIND –THE–METER PROJECTS 17 
RELATED TO THE CONST RUCTION OF ANY THERM AL ENERGY NETWORK SY STEM 18 
UNDER THIS SUBTITLE , AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER 19 
COMPANY SHALL : 20 
 
 (1) WORK WITH EMPLOYEES ALREADY UNDER CONTRA CT WITH THE 21 
COMPANY; OR 22 
 
 (2) USE QUALIFIED CONTRA CTORS THAT ABIDE BY A COMMUNITY 23 
BENEFIT AGREEMENT . 24 
 
 (B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY S HALL 25 
GIVE ITS EMPLOYEE BA RGAINING UNIT AN OPP ORTUNITY TO WORK ON ANY  26 
FRONT–OF–METER OR BEHIND –THE–METER PROJECTS RELATED TO THE 27 
CONSTRUCTION OF ANY THERMAL ENERGY NETWO RK SYSTEM. 28 
 
 (C) ANY RESIDENTIAL ELECT RIFICATION OR EFFICI ENCY CONTRACTS 29 
PROCURED BY THE MARYLAND ENVIRONMENTAL SERVICE SHALL BE SUBJ ECT TO A 30 
COMMUNITY BENEFIT AG REEMENT. 31 
  16 	HOUSE BILL 397  
 
 
 (D) (1) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY 1 
OPERATING A THERMAL ENERGY NETWORK SYSTE M SHALL PROVIDE ITS EMPLOYEE 2 
BARGAINING UNIT AN O PPORTUNITY TO PROVID E MAINTENANCE AND OP ERATIONS 3 
FOR ANY THERMAL ENER GY NETWORK SYSTEM . 4 
 
 (2) (I) SUBJECT TO SUBPA RAGRAPH (II) OF THIS PARAGRAPH , AN 5 
ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY CONTRACT ANY 6 
WORK UNDER THIS SUBT ITLE NOT CONDUCTED B Y THE COMPANY ’S EMPLOYEE 7 
BARGAINING UNIT TO A QUALIFIED CONTRACTOR . 8 
 
 (II) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER 9 
COMPANY SHALL REQUIR E A CONTRACTOR OR SU BCONTRACTOR ON A PRO JECT 10 
UNDER THIS SUBTITLE TO: 11 
 
 1. PAY THE AREA PREVAIL ING WAGE RATE DETERMINED 12 
BY THE COMMISSIONER OF LABOR AND INDUSTRY, INCLUDING WAGES AND FRINGE 13 
BENEFITS; 14 
 
 2. OFFER HEALTH CARE AND RETIREMENT BENEFITS TO 15 
THE EMPLOYEES WORKIN G ON THE PROJECT ; 16 
 
 3. PARTICIPATE IN AN AP PRENTICESHIP PROGRAM 17 
REGISTERED WITH THE STATE OR THE U.S. DEPARTMENT OF LABOR; 18 
 
 4. ESTABLISH AND EXECUT E A PLAN FOR OUTREAC H, 19 
RECRUITMENT , AND RETENTION OF STATE RESIDENTS TO PE RFORM WORK ON THE 20 
PROJECT, WITH AN ASPIRATIONAL GOAL OF 25% OF TOTAL WORK HOURS 21 
PERFORMED BY MARYLAND RESIDENTS , INCLUDING RESIDENTS WHO ARE: 22 
 
 A. RETURNING CITIZENS ; 23 
 
 B. WOMEN; 24 
 
 C. MINORITY INDIVIDUALS ; OR 25 
 
 D. VETERANS; 26 
 
 5. HAVE BEEN IN COMPLIA NCE WITH FEDERAL , STATE, 27 
AND LOCAL WAGE AND H OUR LAWS FOR THE PRE VIOUS 3 YEARS; 28 
 
 6. BE SUBJECT TO ALL STATE REPORTING AND 29 
COMPLIANCE REQUIREME NTS; AND 30 
   	HOUSE BILL 397 	17 
 
 
 7. MAINTAIN ALL APPROPR IATE LICENSES IN GOO D 1 
STANDING; AND 2 
 
 8. ESTABLISH AND EXECUT E A PLAN TO MEET OR 3 
EXCEED THE MINORITY 	BUSINESS ENTERPRISE PARTICIPATION GOALS 4 
ESTABLISHED UNDER SU BSECTION (D)(3) OF THIS SECTION. 5 
 
 (E) (D) (1) THE FINDINGS AND EVID ENCE RELIED ON BY TH E GENERAL 6 
ASSEMBLY FOR THE CONT INUATION OF TH E MINORITY BUSINESS ENTERPRISE 7 
PROGRAM UNDER TITLE 14, SUBTITLE 3 OF THE STATE FINANCE AND 8 
PROCUREMENT ARTICLE ARE INCORPORA TED IN THIS SUBSECTI ON. 9 
 
 (2) TO THE EXTENT PRACTIC ABLE AND AUTHORIZED BY THE U. S. 10 
CONSTITUTION, AN APPROVED PILOT SY STEM APPLICANT AND THE MARYLAND 11 
ENVIRONMENTAL SERVICE SHALL COMPLY WITH THE STATE’S MINORITY BUSINESS 12 
ENTERPRISE PROGRAM. 13 
 
 (3) (I) WITHIN 6 MONTHS AFTER THE APP ROVAL OF A PILOT 14 
SYSTEM UNDER § 7–1002(C) OF THIS SUBTITLE , THE GOVERNOR’S OFFICE OF 15 
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS, IN CONSULTATION WITH THE 16 
OFFICE OF THE ATTORNEY GENERAL AND THE GAS C OMPANY OPERATING THE 17 
APPROVED PILOT SYSTE M, SHALL ESTABLISH A CL EAR PLAN FOR SETTING 18 
REASONABLE AND APPRO PRIATE MINORITY BUSI NESS ENTERPRISE PART ICIPATION 19 
GOALS AND PROCEDURES FOR THE PILOT SYSTEM . 20 
 
 (II) TO THE EXTENT PRACTIC ABLE, THE GOALS AND 21 
PROCEDURES SPECIFIED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE 22 
BASED ON THE REQUIRE MENTS OF TITLE 14, SUBTITLE 7 OF THE STATE FINANCE 23 
AND PROCUREMENT ARTICLE AND THE REGULATIONS I MPLEMENTING THAT 24 
SUBTITLE. 25 
 
 (4) (I) A GAS COMPANY OPERATIN G A PILOT SYSTEM AND THE 26 
MARYLAND ENVIRONMENTAL SERVICE SHALL SUBMIT AN ANNUAL REPORT ON 27 
MINORITY ENTERPRISE PARTICIPATION TO THE COMMISSION. 28 
 
 (II) THE COMMISSION SHALL PROVIDE ANY REPORTS 29 
RECEIVED UNDER SUBPA RAGRAPH (I) OF THIS PARAGRAPH TO THE GENERAL 30 
ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE. 31 
 
7–1005. 32 
 
 (A) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY 33 
OWN, MANAGE, AND RECOVER C OSTS ASSOCIATED WITH A THERMAL ENERGY 34 
NETWORK SYSTEM SUBJE CT TO THE APPROVAL O F THE COMMISSION. 35  18 	HOUSE BILL 397  
 
 
 
 (B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY 1 
DRILL A GEOTHERMAL B OREHOLE IN A PUBLIC UTILITY RIGHT–OF–WAY WHERE 2 
FEASIBLE TO MEET THE REQUIREMENTS OF THIS SUBTIT LE. 3 
 
7–1006. 4 
 
 THE COMMISSION MAY RETAIN INDEPENDENT CONSULTA NTS AND EXPERTS 5 
TO: 6 
 
 (1) ASSIST THE COMMISSION WITH ITS E VALUATION OF PILOT 7 
SYSTEM APPLICATIONS UNDER § 7–1002(C) OF THIS SUBTITLE; AND 8 
 
 (2) SUPPORT THE COMMISSION IN THE COMPLETION OF ANY 9 
REQUIREMENTS UNDER T HIS SUBTITLE. 10 
 
Article – Environment 11 
 
1–701. 12 
 
 (a) (1) In this section the following words have the meanings indicated. 13 
 
 (7) “Overburdened community” means any census tract for which three or 14 
more of the following environmental health indicators are above the 75th percentile 15 
statewide: 16 
 
 (i) Particulate matter (PM) 2.5; 17 
 
 (ii) Ozone; 18 
 
 (iii) National Air Toxics Assessment (NATA) diesel PM; 19 
 
 (iv) NATA cancer risk; 20 
 
 (v) NATA respiratory hazard index; 21 
 
 (vi) Traffic proximity; 22 
 
 (vii) Lead paint indicator; 23 
 
 (viii) National Priorities List Superfund site proximity; 24 
 
 (ix) Risk Management Plan facility proximity; 25 
 
 (x) Hazardous waste proximity; 26 
   	HOUSE BILL 397 	19 
 
 
 (xi) Wastewater discharge indicator; 1 
 
 (xii) Proximity to a Concentrated Animal Feeding Operation (CAFO); 2 
 
 (xiii) Percent of the population lacking broadband coverage; 3 
 
 (xiv) Asthma emergency room discharges; 4 
 
 (xv) Myocardial infarction discharges; 5 
 
 (xvi) Low–birth–weight infants; 6 
 
 (xvii) Proximity to emitting power plants; 7 
 
 (xviii) Proximity to a Toxic Release Inventory (TRI) facility; 8 
 
 (xix) Proximity to a brownfields site; 9 
 
 (xx) Proximity to mining operations; and 10 
 
 (xxi) Proximity to a hazardous waste landfill. 11 
 
 (8) “Underserved community” means any census tract in which, according 12 
to the most recent U.S. Census Bureau Survey: 13 
 
 (i) At least 25% of the residents qualify as low–income; 14 
 
 (ii) At least 50% of the residents identify as nonwhite; or 15 
 
 (iii) At least 15% of the residents have limited English proficiency. 16 
 
Article – Housing and Community Development 17 
 
4–1801. 18 
 
 (a) In this subtitle the following words have the meanings indicated. 19 
 
 (c) “Area median income” means the median household income for the area 20 
adjusted for household size as published and annually updated by the United States 21 
Department of Housing and Urban Development. 22 
 
 SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23 
1, 2024.  24