WES MOORE, Governor Ch. 563
– 1 –
Chapter 563
(Senate Bill 570)
AN ACT concerning
Public Utilities – Thermal Energy Network Systems – Authorization and
Establishment
(Working for Accessible Renewable Maryland Thermal Heat (WARMTH) Act)
FOR the purpose of requiring each certain gas company companies and authorizing certain
gas companies to develop a plan for a pilot thermal energy network system or
systems on or before a certain date; requiring each certain gas company companies
to submit a certain proposal or proposals to the Public Service Commission for
approval on or before a certain date; authorizing a municipal corporation, county, or
community organization to submit neighborhoods to gas companies for consideration
as part of a pilot system; establishing requirements and authorizations for the
development and implementation of a proposal and thermal energy network system;
requiring authorizing the Commission to approve, approve with modifications, or
reject each proposal on or before a certain date; requiring the Commission, in
consultation with the Maryland Energy Administration and, the Office of People’s
Counsel, a certain company, a certain certified representative, and certain
customers, to make a determination on whether to make a pilot system permanent
after the completion of the pilot system’s pilot period; establishing funding
requirements for the Administration to cover assist certain companies in covering
certain costs; providing for the payment and recovery of certain costs; requiring the
Administration to coordinate with the Department of Housing and Community
Development to provide certain services or funding; requiring the Maryland
Environmental Service to issue certain procurements for certain projects a gas
company to be responsible for certain costs associated with certain
behind–the–meter projects; establishing certain employment and wage
requirements for certain projects; and generally relating to thermal energy network
systems.
BY repealing and reenacting, without amendments,
Article – Public Utilities
Section 7–703(f)(1)
Annotated Code of Maryland
(2020 Replacement Volume and 2023 Supplement)
BY adding to
Article – Public Utilities
Section 7–1001 through 7–1006 to be under the new subtitle “Subtitle 10. Thermal
Energy Network Systems”
Annotated Code of Maryland
(2020 Replacement Volume and 2023 Supplement)
Ch. 563 2024 LAWS OF MARYLAND
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BY repealing and reenacting, without amendments,
Article – Environnent Environment
Section 1–701(a)(1), (7), and (8)
Annotated Code of Maryland
(2013 Replacement Volume and 2023 Supplement)
BY repealing and reenacting, without amendments,
Article – Housing and Community Development
Section 4–1801(a) and (c)
Annotated Code of Maryland
(2019 Replacement Volume and 2023 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Public Utilities
7–703.
(f) (1) (i) In this subsection the following words have the meanings
indicated.
(ii) “Area median income” has the meaning stated in § 4–1801 of the
Housing and Community Development Article.
(iii) “Low or moderate income housing” means housing that is
affordable for a household with an aggregate annual income that is below 120% of the area
median income.
SUBTITLE 10. THERMAL ENERGY NETWORK SYSTEMS.
7–1001.
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(B) “ADMINISTRATION ” MEANS THE MARYLAND ENERGY
ADMINISTRATION .
(C) “BEHIND–THE–METER PROJECT ” MEANS A PROJECT T HAT INVOLVES A
PHYSICAL, OPERATIONAL , OR BEHAVIORAL MODIFI CATION ON THE CUSTOM ER SIDE
OF A UTILITY METER , INCLUDING REPLACEMEN T OF APPLIANCES , RETROFITS, AND
PANEL UPGRADES .
WES MOORE, Governor Ch. 563
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(D) “COMMUNITY BENEFIT AGR EEMENT” MEANS AN AGREEMENT
APPLICABLE TO THE CO NSTRUCTION OF ANY THERMAL E NERGY NETWORK SYSTEM
AND ANY ACCOMPANYING RESIDENTIAL ELECTRIF ICATION THAT:
(1) PROMOTES INCREASED O PPORTUNITIES FOR LOC AL BUSINESSES
AND SMALL, MINORITY, WOMEN–OWNED, AND VETERAN –OWNED BUSINESSES IN THE
CLEAN ENERGY INDUSTR Y;
(2) ENSURES THE TIMELY , SAFE, AND EFFICIENT COMPLE TION OF
THE PROJECT BY :
(I) FACILITATING A STEAD Y SUPPLY OF HIGHLY S KILLED
CRAFT WORKERS WHO SH ALL BE PAID NOT LESS THAN THE PREVAILING WAGE RATE
DETERMINED BY THE COMMISSIONER OF LABOR AND INDUSTRY UNDER TITLE 17,
SUBTITLE 2 OF THE STATE FINANCE AND PROCUREMENT ARTICLE; AND
(II) GUARANTEEING THAT TH E CONSTRUCTION WORK
PERFORMED IN CONNECT ION WITH THE PROJECT WILL BE SUBJECT TO A N
AGREEMENT THAT :
1. ESTABLISHES THE TERM S AND CONDITIONS OF
EMPLOYMEN T AT THE CONSTRUCTIO N SITE OF THE PROJEC T OR A PORTION OF TH E
PROJECT;
2. GUARANTEES AGAINST S TRIKES, LOCKOUTS, AND
SIMILAR DISRUPTIONS ;
3. ENSURES THAT ALL WOR K ON THE PROJECT FUL LY
CONFORMS TO ALL RELE VANT STATE AND FEDERAL LAW S, RULES, AND
REGULATIONS , INCLUDING ALL REQUIR ED TRAINING FOR EMPL OYEES;
4. CREATES MUTUALLY BIN DING PROCEDURES FOR
RESOLVING LABOR DISP UTES ARISING DURING THE TERM OF THE PROJ ECT;
5. SETS FORTH OTHER MEC HANISMS FOR
LABOR–MANAGEMENT COOPERATI ON ON MATTERS OF MUTUAL INTEREST AND
CONCERN, INCLUDING PRODUCTIVI TY, QUALITY OF WORK , SAFETY, AND HEALTH ;
AND
6. BINDS ALL CONTRACTOR S AND SUBCONTRACTORS TO
THE TERMS OF THE AGR EEMENT THROUGH THE I NCLUSION OF APPROPRI ATE
PROVISIONS IN ALL RE LEVANT SOLICITATION AND CONTRACT DOCUMENTS ;
Ch. 563 2024 LAWS OF MARYLAND
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(3) PROMOTES SAFE COMPLE TION OF THE PROJECT BY ENSURING
THAT AT LEAST 80% OF THE CRAFT WORKERS ON THE PROJECT HAVE COMPLETED
AN OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION 10–HOUR COURSE ;
(4) PROMOTES CAREER TRAI NING OPPORTUNITIE S IN THE
MANUFACTURING , MAINTENANCE , AND CONSTRUCTION IND USTRIES FOR LOCAL
RESIDENTS, VETERANS, WOMEN, MINORITIES, AND FORMERLY INCARCE RATED
INDIVIDUALS;
(5) INCLUDES PROVISIONS FOR LOCAL HIRING AND THE HIRING OF
HISTORICALLY DISADVA NTAGED GROUPS ;
(6) REFLECTS A 21ST–CENTURY LABOR –MANAGEMENT APPROACH BY
DEVELOPERS AND SUPPL IERS BASED ON COOPER ATION, HARMONY, AND
PARTNERSHIP THAT PRO ACTIVELY SEEKS TO EN SURE THAT WORKERS CA N FREELY
CHOOSE TO BOTH ORGAN IZE AND COLLECTIVELY BARGAIN;
(7) USES LOCALLY , SUSTAINABLY, AND DOMESTICALLY
MANUFACTURED CONSTRU CTION MATERIALS AND COMPONENTS TO THE EX TENT
PRACTICABLE ;
(8) (7) PROMOTES THE USE OF SKILLED LOCAL LABOR ,
PARTICULARLY WITH RE GARD TO THE CONSTRUC TION AND MANUFACTURI NG
COMPONENTS OF THE PR OJECT, USING METHODS INCLUDING OU TREACH, HIRING,
OR REFERRAL METHODS THAT ARE AFFILIATED WITH REGISTERED
APPRENTICESHIP PROGR AMS UNDER TITLE 11, SUBTITLE 4 OF THE LABOR AND
EMPLOYMENT ARTICLE; AND
(9) (8) AUTHORIZES THE MARYLAND DEPARTMENT OF LABOR AND
THE COMMISSION TO CONSIDE R, REVIEW, AND ENFORCE A PUBLIC SERVICE
COMPANY’S COMPLIANCE WITH AN Y COMMUNITY BENEFIT AGREEMENT .
(E) “FINANCING PROGRAM” MEANS THE ENERGY INFRASTRUCTURE
REINVESTMENT CATEGORY OF THE TITLE 17 CLEAN ENERGY FINANCING
PROGRAM.
(E) (F) “FRONT–OF–METER PROJECT ” MEANS A PROJECT THAT IMPACTS
THE UTILITY SIDE OF A METER.
(F) (G) “GEOTHERMAL BOREHOLE ” MEANS A GEOTHERMAL S HAFT
DRILLED INTO THE EAR TH FOR USE IN A SYST EM THAT USES THE THE RMAL
PROPERTIES OF THE EA RTH OR GROUNDWATER T O HEAT OR COOL BUILDINGS .
WES MOORE, Governor Ch. 563
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(H) “GREENHOUSE GAS REDUCTION FUND” MEANS THE GREENHOUSE GAS
REDUCTION FUND UNDER THE FEDERA L INFLATION REDUCTION ACT OF 2022.
(G) (I) “LEARNING FROM THE GROUND UP” MEANS THE LEARNING
FROM THE GROUND UP RESEARCH TEAM FORM ED BY THE HOME ENERGY
EFFICIENCY TEAM.
(H) (J) “LOW OR MODERATE INCOM E HOUSING” HAS THE MEANING
STATED IN § 7–703(F)(1)(III) OF THIS TITLE.
(I) (K) “PILOT SYSTEM” MEANS A PILOT THERMA L ENERGY NETWORK
SYSTEM DEVELOPED BY A GAS COMPANY TO REP LACE GAS INFRASTRUCT URE WITH
A THERMAL ENERGY NET WORK SYSTEM .
(J) (L) “PJM CAPACITY MARKET ” MEANS THE CAPACITY M ARKET OF
PJM INTERCONNECTION , LLC OR ANY SUCCESSOR ORG ANIZATION THAT SERVI CES
THE PJM REGION.
(K) (M) “THERMAL ENERGY NETWOR K SYSTEM” MEANS A SYSTEM :
(1) OF CLOSED LOOP UNDERGRO UND PIPING INFRASTRU CTURE,
INCLUDING GEOTHERMAL BOREHOLES , LEADING UP TO A UTIL ITY METER FOR THE
CONVEYANCE OR STORAG E OF RENEWABLE , NONGREENHOUSE GAS –EMITTING
THERMAL ENERGY ; AND
(2) THAT CREATES A NETWO RK OF CUSTOMERS WITH THERMAL
ENERGY FOR HEATING A ND COOLING THROUGH N ONCOMBUSTING ELECTRI C HEAT
PUMPS.
7–1002.
(A) (1) (I) ON OR BEFORE OCTOBER 1, 2024, EACH GAS COMPANY
THAT SERVES AT LEAST 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY
SHALL:
(I) 1. BEGIN TO DEVELOP A P LAN FOR A PILOT SYSTEM O R
SYSTEMS; AND
(II) 2. FILE NOTICE WITH THE COMMISSION THAT THE
COMPANY HAS BEGUN PL AN DEVELOPMENT .
(II) ON OR BEFORE OCTOBER 1, 2024, A GAS COMPANY THAT
SERVES FEWER THAN 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY MAY Ch. 563 2024 LAWS OF MARYLAND
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DEVELOP A PLAN FOR A PILO T SYSTEM OR SYSTEMS IN ACCORDANCE WITH T HE
REQUIREMENTS OF THIS SECTION.
(2) IN DEVELOPING A PLAN FOR A PILOT SYSTEM , A GAS COMPANY
SHALL COORDINATE WIT H COMMUNITY GROUPS , LOCAL GOVERNMENTS , ANY
CERTIFIED REPRESENTA TIVES OF THE EMPL OYEES OF THE GAS COM PANY, THE
COMMISSION, THE ADMINISTRATION , AND ANY OTHER GROUPS THE GAS COMPANY
CONSIDERS NECESSARY TO ALLOW FOR DIVERSE DESIGN AMONG PILOT S YSTEMS.
(3) EACH GAS COMPANY SHAL L INCLUDE IN THE NOT ICE FILED
UNDER PARAGRAPH (1) OF THIS SUBSECTION:
(I) DETAILS OF ANY COORD INATION WITH COMMUNI TY
GROUPS, LOCAL GOVERNMENTS , CERTIFIED REPRESENTA TIVES OF THE
EMPLOYEES OF THE GAS COMPANY, THE COMMISSION, THE ADMINISTRATION , AND
ANY OTHER GROUPS THE GAS COMPANY CONSIDER S NECESSARY TO ALLOW FOR
DIVERSE DESIGN AMONG PILOT SYSTEMS; AND
(II) ANY LETTERS OF SUPPO RT FROM INTERESTED G ROUPS.
(B) (1) (I) ON OR BEFORE JULY 1, 2025, EACH GAS COMPANY THAT
SERVES AT LEAST 75,000 CUSTOMERS IN ITS DIS TRIBUTION TERRITORY SHALL
SUBMIT EITHER ONE OR TWO PROPOSALS FOR A PILO T SYSTEM TO THE COMMISSION
FOR APPROVAL .
(II) A GAS COMPANY THAT SER VES FEWER THAN 75,000
CUSTOMERS IN ITS DIS TRIBUTION TERRITORY MAY SUBMIT A PROPOSA L FOR A
PILOT SYSTEM TO THE COMMISSION AFTER PROV IDING AT LEAST 60 DAYS’ NOTICE
TO THE COMMISSION OF THE COM PANY’S INTENT TO FILE A P ROPOSAL.
(2) A PROPOSAL FOR A PILOT SYSTEM SHALL ENSURE THAT AT LEAST
80% OF ITS CUSTOMERS ARE FROM LOW OR MODERATE INCOME HOUSING .
(3) A CUSTOMER MAY CHOOSE TO OPT OUT OF A PILO T SYSTEM
BEFORE THE PROPOSAL FOR THE PIL OT SYSTEM IS SUBMITT ED.
(4) EACH PROPOSAL FOR A P ILOT SYSTEM SHALL DE MONSTRATE
THAT THE GAS COMPANY HAS SOUGHT ACCESS TO OBTAINED, OR IS REASONABLY
CERTAIN TO OBTAIN , ANY AVAILABLE FEDERA L FUNDING IN THE FOR M OF A MATCH,
GRANT, LOAN, OR TAX CREDIT , INCLUDING THOSE ESTA BLISHED UNDER THE
ENERGY INFRASTRUCTURE REINVESTMENT CATEGORY OF THE TITLE 17 CLEAN
ENERGY FINANCING PROGRAM AND THE GREENHOUSE GAS REDUCTION FUND
UNDER THE FEDERAL INFLATION REDUCTION ACT OF 2022. WES MOORE, Governor Ch. 563
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(5) EACH GAS COMPANY IS R ESPONSIBLE FOR ENSUR ING THAT EACH
PROPOSAL SUBMITTED B Y THE GAS COMPANY CO MPLIES WITH ALL APPL ICABLE
FEDERAL STATUTES , REGULATIONS , AND GUIDANCE RELATIN G TO ANY FEDERAL
FUNDING.
(6) EACH PROPOSAL SHALL A DDRESS:
(I) HOW THE PILOT SYSTEM WILL DEVELOP USEFUL
INFORMATION FOR THE ADOPTION OF REGULATI ONS GOVERNING THERMA L
ENERGY NETWORK SYSTE MS;
(II) HOW THE PILOT SYSTEM FURTHERS GREENHOUSE GAS
EMISSIONS REDUCTION GOALS;
(III) HOW THE PILOT SYSTEM ADVANCES FINANCIAL A ND
TECHNICAL APPROACHES TO EQUITABLE AND AFF ORDABLE BUILDING
ELECTRIFICATION ;
(IV) HOW THE PILOT SYSTEM CREATES BENEFITS TO ITS
CUSTOMERS , EMPLOYEES, AND SOCIETY AT LARGE , INCLUDING PUBLIC HEA LTH
BENEFITS, QUALITY JOB RETENTION OR CREATION, RELIABILITY, AND INCREASED
AFFORDABILITY OF REN EWABLE THERMAL ENERG Y OPTIONS;
(V) HOW THE PILOT SYSTEM CONTRIBUTES TO AVOID ING COSTS
TO ELECTRIC DISTRIBU TION AND TRANSMISSIO N SYSTEMS THAT WOULD
OTHERWISE BE REQUIRE D FOR ELECTRIFICATION BY CO MPARING THE PROPOSED
SYSTEM TO THE COST O F ELECTRIFICATION US ING THE MOST WIDELY
COMMERCIALLY AVAILAB LE AIR–SOURCE HEAT PUMPS ;
(VI) HOW THE PILOT SYSTEM CONTRIBUTES TO AVOID ING COSTS
RELATED TO GAS PIPE REPLACEMENT ;
(VII) THE EXTENT TO WHICH THE PR OPOSAL GIVES PRIORIT Y TO
UNDERSERVED OR OVERB URDENED COMMUNITIES AS DEFINED IN § 1–701(A) OF
THE ENVIRONMENT ARTICLE;
(VIII) THE PILOT SYSTEM ’S ABILITY TO BID DEM AND REDUCTION
INTO THE PJM CAPACITY MARKET ;
(IX) NEIGHBORHOODS AT THE END POINT OF A G AS SYSTEM
WHERE A FULL TRANSIT ION FROM GAS SYSTEMS TO ELECTRIFICATION C OULD BE
FACILITATED WITHIN T HE PILOT PERIOD OR W ITHIN 5 YEARS AFTER THE PILO T
PERIOD CONCLUDES ; Ch. 563 2024 LAWS OF MARYLAND
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(X) SAFETY;
(XI) RELIABILITY;
(XII) ENVIRONMENTAL ACCEPTABILITY OF THE FLUID
TECHNOLOGY EMPLOYED ;
(XIII) OPERATIONS;
(XIV) MAINTENANCE ;
(XV) CUSTOMER COMPLAINT R ESOLUTION;
(XVI) EMERGENCY RESPONSE ;
(XVII) POINTS OF INTERCONNE CTION BETWEEN THE GA S
COMPANY AND HOMEOWNE R FOR ANY FLUID TRA NSFER;
(XVIII) TECHNOLOGY TO BE USE D TO SHUT OFF FLUID FLOW
TO CUSTOMERS ;
(XIX) CUSTOMER SERVICE TER MINATION IN THE EVEN T OF BILL
NONPAYMENT ;
(XX) LIFE EXPECTANCY OF T HE GEOTHERMAL SYSTEM ; AND
(XXI) THE EXTENT TO WHICH THE PROPOSAL IS COST–EFFECTIVE
FOR RATEPAYERS ; AND
(XXI) (XXII) ANY OTHER REQUIREMEN TS AS DETERMINED BY THE
COMMISSION.
(7) EACH PROPOSAL SHALL I NCLUDE:
(I) A PROPOSED RATE STRU CTURE FOR THE PILOT SYSTEM
THAT ENSURES IS PROJECTED TO ENSU RE THAT ANY CUSTOMER PA RTICIPATING IN
THE PILOT SYSTEM DOE S NOT PAY MORE FOR U TILITIES THAN IF THE CUSTOMER
HAD NOT PARTICIPATED ; AND
(II) A PROPOSED SET OF ME ASUREMENTS OF ENERGY UNITS
AND ACCOUNTING STAND ARDS.
WES MOORE, Governor Ch. 563
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(8) (I) A MUNICIPAL CORPORATIO N, COUNTY, OR COMMUNITY
ORGANIZATION MAY SUB MIT NEIGHBORHOODS TO GAS COMPANIES FOR
CONSIDERATION AS PAR T OF A PILOT SYSTEM .
(II) A MUNICIPAL CORPORATIO N, COUNTY, OR COMMUNITY
ORGANIZATION THAT SU BMITS A NEIGHBORHOOD TO A GAS COMPANY FOR
CONSIDERATION AS PAR T OF A PILOT SYSTEM UNDER SUBPARAGRAPH (I) OF THIS
PARAGRAPH SHALL SUBM IT A COPY OF ITS PRO POSAL TO THE COMMISSION.
(C) (1) ON OR BEFORE DECEMBER 31, 2025, THE COMMISSION MAY
APPROVE, APPROVE WITH MODIFIC ATIONS, OR REJECT A PROPOSAL .
(2) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, IF THE
COMMISSION DETERMINES THAT A PROPOSAL IS I N THE PUBLIC INTERES T AND IS
COST–EFFECTIVE, THE COMMISSION SHALL MAY APPROVE, APPROVE WITH
MODIFICATIONS , OR REJECT THE PROPOSAL .
(3) (I) IN DETERMINING WHETHE R TO APPROVE , APPROVE WITH
MODIFICATIONS, OR REJECT A PROPOSAL , THE COMMISSION SHALL :
(I) 1. CONSIDER THE PROJECT ED COSTS AND BENEFIT S OF
THE PROJECTS PROPOSE D FOR INCLUSION IN T HE PILOT SYSTEM BY U SING A TEST
THAT INCLUDES :
1. A. SOCIETAL COSTS AND B ENEFITS; AND
2. B. AVOIDED ENERGY AND I NFRASTRUCTURE
INVESTMENTS ;
(II) 2. DETERMINE WHETHER TH E PILOT SYSTEM IS IN THE
PUBLIC INTEREST AND IN THE INTEREST OF R ATEPAYERS;
(III) 3. DETERMINE HOW EACH P ILOT SYSTEM ’S
PERFORMANCE WILL BE EVALUATED DURING THE PILOT SYSTEM’S DURATION; AND
(IV) 4. ENSURE THAT EACH PIL OT SYSTEM:
1. A. HAS A PROVISION FOR CUSTOMERS WHO MAY WI SH TO
OPT OUT DURING THE C OURSE OF THE PILOT P ERIOD; AND
2. B. DETAILS RATEPAYER IM PACTS FOR PILOT SYST EM
PARTICIPANTS AND ALL CUSTOMERS IN THE GAS COMPANY ’S SERVICE TERRITORY ;
AND
Ch. 563 2024 LAWS OF MARYLAND
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5. DETERMINE WHETHER TH E PROPOSAL IS
COST–EFFECTIVE IN ACCORDA NCE WITH SUBPARAGRAP H (II) OF THIS PARAGRAPH .
(II) A PROPOSAL UNDER THIS SECTION IS COST–EFFECTIVE IF
THE COMMISSION DETERMINES THAT:
1. THE PROJECTED BENEFI TS ARE GREATER THAN THE
PROJECTED COSTS FOR ALL RATEPAYERS IN TH E GAS COMPANY ’S SERVICE
TERRITORY;
2. THE GAS COMPANY HAS OBTAINED, OR IS
REASONABLY CERTAIN T O OBTAIN, FEDERAL FUNDING UNDE R THE FINANCING
PROGRAM OR THE GREENHOUSE GAS REDUCTION FUND TO SUPPORT THE C OSTS
OF A PILOT SYSTEM ; AND
3. THE FEDERAL FUNDING THAT THE GAS COMPANY HAS
OBTAINED, OR IS REASONABLY CERT AIN TO OBTAIN, TO SUPPORT THE COSTS OF A
PILOT SYSTEM WOULD N OT BE MORE COST –EFFECTIVE IN MEETING OTHER
GREENHOUSE GAS REDUC TION OR ELECTRIFICAT ION MEASURES IN THE STATE.
(4) (I) EXCEPT AS PROVIDED IN SUBPARAGRAPH (II) OF THIS
PARAGRAPH, EACH GAS COMPANY SHA LL COMPLETE CONSTRUC TION OF A PILOT
SYSTEM WITHIN 1 YEAR AFTER THE COMMISSION APPROVES T HE SYSTEM.
(II) THE COMMISSION MAY EXTEND THE DEADLINE UNDER
SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R GOOD CAUSE SHOWN .
(5) IF THE COMMISSION APPROVES A PROPO SAL WITH
MODIFICATIONS , THE COMMISSION SHALL GIVE THE GAS COMPANY A RE ASONABLE
AMOUNT OF TIME TO MA KE THE NECESSARY MOD IFICATIONS.
(6) ON COMPLETION OF A PI LOT SYSTEM, THE GAS COMPANY SHAL L
FILE WITH THE COMMISSION FOR EVALUA TION ANY INFORMATION RELEVANT TO
THE CRITERIA ESTABLI SHED UNDER PARAGRAPH (3) OF THIS SUBSECTION .
(D) (1) EACH PILOT SYSTEM SHA LL MEET THE REQUIREM ENTS FOR
PILOT SYSTEMS UNDER THIS SUBTITLE FOR 2 YEARS AFTER THE PILO T SYSTEM IS
INITIATED AND OPERATIONAL .
(2) (I) ONCE THE 2–YEAR PERIOD UNDER PA RAGRAPH (1) OF THIS
SUBSECTION HAS PASSE D, THE COMMISSION, IN CONSULTATION WITH THE
ADMINISTRATION , AND THE OFFICE OF PEOPLE’S COUNSEL, THE ELECTRIC , GAS,
OR WATER COMPANY THA T OWNS AND MANAGES T HE PILOT SYSTEM , A CERTIFIED WES MOORE, Governor Ch. 563
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REPRESENTATIVE OF TH E EMPLOYEES OF THE E LECTRIC COMPANY , GAS COMPANY ,
OR WATER COMPANY THA T OWNS AND MANAGES T HE PILOT SYSTEM , AND
PARTICIPATING CUSTOM ERS, SHALL DETERMINE WHET HER TO MAKE THE PILO T
SYSTEM PERMANENT .
(II) A PILOT SYSTEM MADE PE RMANENT UNDER
SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL CONTINUE TO MEET THE
REQUIREMENTS PLACED ON PILOT SYSTEMS UND ER THIS SUBTITLE.
(III) IF A DETERMINATION IS MADE THAT A PILOT SY STEM WILL
NOT BE MADE PERMANEN T UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE
COMMISSION MAY APPROV E RECOVERY OF ALL PR UDENTLY INCURRED COS TS
NECESSARY FOR A GAS COMPANY TO COMPLY WI TH THE DETERMINATION .
(3) THE COMMISSION SHALL ADOP T REGULATIONS ADDRES SING THE
DECOMMISSIONING OR D ISCONTINUANCE OF A P ILOT SYSTEM , INCLUDING
REGULATIONS ENSURING THAT THE CUSTOMERS W HO PARTICIPATED IN T HE PILOT
SYSTEM DO NOT INCUR ADDITIONAL EXPENSES FOR THE DECOMMISSION ING OR
INSTALLATION OF AN A PPLIANCE THAT IS USE D IN THE PILOT SYSTE M AND IS
DECOMMISSIONED BEFOR E THE END OF ITS USE FUL LIFE.
(E) (1) EACH GAS COMPANY IMPL EMENTING A PILOT SYS TEM SHALL
PARTICIPATE IN STAND ARDIZED DATA COLLECT ION COORDINATED BY T HE
COMMISSION.
(2) ANY STANDARDIZED DATA COLLECTED UNDER PARA GRAPH (1) OF
THIS SUBSECTION SHAL L:
(I) BE FILED WITH THE COMMISSION BY THE APPROPRIAT E
GAS COMPANY ; AND
(II) INCLUDE DATA FROM TH E LEARNING FROM THE GROUND
UP AND ANY OTHER NATI ONAL RESEARCH PROJEC T FOR THE DEVELOPMEN T OF
THERMAL ENERGY NETWO RK SYSTEMS THAT THE COMMISSION CONSIDERS
APPROPRIATE .
(F) (1) THE ADMINISTRATION SHALL PROVID E FUNDING IN THE FOR M OF
GRANTS TO COMMUNITY –BASED ORGANIZATIONS THAT PERFORM OUTREAC H IN
NEIGHBORHOODS TO INC REASE PARTICIPATION IN A PILOT SYSTEM AN D
COORDINATE THE IMPLE MENTATION OF AN APPR OVED PILOT SYSTEM .
(2) THE ADMINISTRATION MAY PROVIDE UP TO $1,000,000 IN
FUNDING TO A COMMUNI TY–BASED ORGANIZATION U NDER PARAGRAPH (1) OF THIS
SUBSECTION. Ch. 563 2024 LAWS OF MARYLAND
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(3) FUNDING UNDER THIS SU BSECTION MAY BE PROV IDED ONLY
BEFORE OCTOBER 1, 2025.
(4) FUNDING UNDER THIS SU BSECTION MAY BE PROV IDED FROM THE
STRATEGIC ENERGY INVESTMENT FUND ESTABLISHED UNDE R § 9–20B–05 OF THE
STATE GOVERNMENT ARTICLE OR ANY OTHER SOURCE OF STATE OR FEDERAL
FUNDING.
(G) (1) A GAS COMPANY MAY REQU EST APPROVAL FROM TH E
COMMISSION TO TRACK T HE COSTS OF DEVELOPI NG A PROPOSAL U NDER THIS
SECTION.
(2) A REQUEST UNDER PARAGR APH (1) OF THIS SUBSECTION S HALL
INCLUDE A PROPOSED D EVELOPMENT PLAN AND BUDGET.
(3) THE COMMISSION SHALL APPR OVE A REQUEST UNDER
PARAGRAPH (1) OF THIS SUBSECTION O N FINDING THAT THE P ROPOSED PLAN AND
COSTS ARE NECESSARY TO MEET TH E REQUIREMENTS UNDER THIS SECTION,
REASONABLE , AND IN THE PUBLIC INTEREST .
(4) AT A GAS COMPANY ’S NEXT RATE CASE PROCEEDING FOLL OWING
THE APPROVAL OF A RE QUEST UNDER THIS SUB SECTION, THE COMMISSION SHALL
MAY AUTHORIZE RECOVERY O F PRUDENTLY INCURRED COSTS ASSOCIATED WIT H
DEVELOPING THE PROPO SAL AND ANY CARRYING COSTS THAT THE COMMISSION
DETERMINES ARE APPRO PRIATE.
7–1003.
(A) (1) (I) THE ADMINISTRATION SHALL COORDINATE FUNDING
SOURCES, INCLUDING ALL AVAILA BLE FEDERAL FUNDING , PHILANTHROPIC
FUNDING, FUNDING AVAILABLE UN DER THE EMPOWER MARYLAND PROGRAM,
AND STRATEGIC ENERGY INVESTMENT FUND FUNDING ALLOCATE D TO ENERGY
EFFICIENCY, TO COVER ASSIST AN ELECTRIC C OMPANY, A GAS COMPANY , OR A
WATER COMPANY IN COV ERING THE COSTS FOR ALL BE HIND–THE–METER
PROJECTS, INCLUDING FULL ELECT RIFICATION AND WEATHERIZATION ,
ASSOCIATED WITH A TH ERMAL ENERGY NETWORK SYSTEM SO THAT ANY A FFECTED
RESIDENTIAL CUSTOMERS ARE NOT RE QUIRED TO PAY FOR CO NNECTION TO THE
THERMAL ENERGY NETWO RK SYSTEM OR ANY APP LIANCE REPLACEMENTS
REQUIRED FOR ELECTRI FICATION.
(II) FUNDS FROM THE FEDERA L INFLATION REDUCTION ACT
MAY NOT EXCEED : WES MOORE, Governor Ch. 563
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1. $14,000 PER RESIDENTIAL UNIT ; AND
2. $9,000,000 IN TOTAL.
(2) (I) UNLESS PRECLUDED BY F EDERAL LAW , REGULATION , OR
PROGRAM REQUIREMENT GUIDELINES, THE ADMINISTRATION SHALL RESERVE
$12,000,000 $9,000,000 OF FEDERAL FUNDING F ROM THE U.S. DEPARTMENT OF
ENERGY TO ENSURE ADEQ UATE FUNDING FOR ANY APPL IANCES INSTALLED IN
CONNECTION WITH A PI LOT SYSTEM.
(II) FUNDS RESERVED UNDER SUBPARAGRAPH (I) OF THIS
PARAGRAPH SHALL BE A LLOCATED NOT LATER T HAN JUNE 30, 2028, AND SPENT
NOT LATER THAN JUNE 30, 2030.
(3) THE ADMINISTRATION SHA LL COORDINATE WITH T HE
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO PROVID E
SERVICES OR FUNDING FOR WEATHERIZATION F OR ALL LOW OR MODERA TE INCOME
HOUSING WITHIN THE P ILOT SYSTEM’S AREA.
(4) IN PROVIDING FUNDING MADE AVAILABLE UNDER THE FEDERAL
INFLATION REDUCTION ACT OF 2022 FOR BEHIND–THE–METER PROJECTS , THE
ADMINISTRATION SHALL GIVE PRIORITY TO LOW AND MODERATE INCOME HOUSING.
(B) THE MARYLAND ENVIRONMENTAL SERVICE A GAS COMPANY
IMPLEMENTING A PILOT SYSTEM SHALL :
(1) SHALL ISSUE PROCUREM ENTS BE RESPONSIBLE FOR
CONSTRUCTION , INCLUDING ANY NECESS ARY RENOVATIONS , FOR
BEHIND–THE–METER PROJECTS RELAT ING TO ANY APPLIANCE OR PANEL
REPLACEMENTS OR UPGR ADES NECESSARY TO CO NNECT TO A THERMAL E NERGY
NETWORK SYSTEM AND O PERATE WITHOUT GAS;
(2) PURSUE ALL TAX CREDITS AND FEDERAL FUNDING AVAILABLE
FOR FRONT–OF–THE–METER AND BEHIND –THE–METER PROJECTS ; AND
(3) COORDINATE WITH THE ADMINISTRATION TO ACC ESS FUNDS
AVAILABLE UNDER THE FEDERAL INFLATION REDUCTION ACT, REBATES AND
CREDITS AVAILABLE UN DER THE EMPOWER MARYLAND PROGRAM, AND ANY
OTHER AVAILABLE FUND S.
(C) (1) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY
THAT OWNS AND MANAGE S A PILOT SYSTEM SHA LL PAY FOR ANY COST NOT COVERED Ch. 563 2024 LAWS OF MARYLAND
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BY THE FUNDS AND TAX CREDITS SPECIFIED IN SUBSECTIONS (A) AND (B) OF THIS
SECTION.
(2) SUBJECT TO SUBSECTION (D) OF THIS SECTION , ANY COSTS
INCURRED BY AN ELECT RIC COMPANY , A GAS COMPANY , OR A WATER COMPANY
AFTER ALL FUNDS AND TAX CREDITS SPECIFIE D UNDER SUBSECTIONS (A) AND (B)
OF THIS SECTION HAVE BEEN APPLIED MAY BE RECOV ERED WITHIN 1 YEAR OF
INCURRING THE COSTS THROUGH RATE ADJUSTM ENTS OR ANOTHER MECH ANISM
APPROVED BY THE COMMISSION.
(D) IF AN ELECTRIC COMPAN Y, A GAS COMPANY , OR A WATER COMPANY I S
REQUIRED TO OWN BEHI ND–THE–METER INFRASTRUCTURE FOR A SPECIFIED
PERIOD OF TIME TO QU ALIFY FOR A FUNDING SOURCE SPECIFIED UND ER
SUBSECTION (A)(1)(I) OF THIS SECTION:
(1) THE COST ASSOCIATED WITH THE BEHIND –THE–METER
INFRASTRUCTURE SHALL BE RECOVERED WITHIN THE SPECIFIED OWNERS HIP
PERIOD REQUIRED FOR THE FUNDING;
(2) THE ELECTRIC COMPANY , GAS COMPANY , OR WATER COMPANY
SHALL MAINTAIN THE B EHIND–THE–METER INFRASTRUCTURE DURING THE
SPECIFIED OWNERSHIP PERIOD REQUIRED FOR THE FUNDING; AND
(3) OWNERSHIP OF THE BEH IND–THE–METER INFRASTRUCTURE
SHALL TRANSFER TO THE ELECTRIC , GAS, OR WATER CUSTOMER WH O THE
INFRASTRUCTURE WAS I NSTALLED TO BENEFIT WHEN THE SPECIFIED O WNERSHIP
PERIOD REQUIRED FOR THE FUNDING LAPSES .
(E) NOTHING IN THIS SECTI ON MAY BE CONSTRUED TO AUTHORIZE OR
PROHIBIT AN ELECTRIC COMPANY, A GAS COMPANY, OR A WATER COMPANY F ROM
RECOVERING COSTS OF BEHIND–THE–METER INFRASTRUCTURE THAT DOES NOT
MEET THE REQUIREMENT S OF THIS SUBTITLE.
(2) SHALL PROVIDE A PROC UREMENT SUBMISSION W INDOW OF NOT
LESS THAN 90 DAYS;
(3) SHALL AWARD CONTRACT S IN A TIMELY MANNER; AND
(4) MAY ENTER INTO A CON TRACT OR CONTRACTS F OR THE
PROCUREMENT .
(C) THE ADMINISTRATION AND TH E MARYLAND ENVIRONMENTAL
SERVICE SHALL COORDIN ATE WITH GAS COMPANI ES TO ENSURE THAT WES MOORE, Governor Ch. 563
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BEHIND–THE–METER PROJECTS CONNE CT TO THERMAL ENERGY NETWORK
SYSTEMS THAT SERVE C USTOMERS.
7–1004.
(A) FOR ANY FRONT –OF–METER OR BEHIND –THE–METER PROJECTS
RELATED TO THE CONST RUCTION OF ANY THERM AL ENERGY NETWORK SY STEM
UNDER THIS SUBTITLE , AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER
COMPANY SHALL :
(1) WORK WITH EMPLOYEES ALREADY UNDER CONTRA CT WITH THE
COMPANY; OR
(2) USE QUALIFIED CONTRA CTORS THAT ABIDE BY A COMMUNITY
BENEFIT AGREEMENT .
(B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY S HALL
GIVE ITS EMPLOYEE BA RGAINING UNIT AN OPP ORTUNITY TO WORK ON ANY
FRONT–OF–METER OR BEHIND –THE–METER PROJECTS RELATED TO THE
CONSTRUCTION OF ANY THERMAL ENERGY NETWO RK SYSTEM.
(C) ANY RESIDENTIA L ELECTRIFICATION OR EFFICIENCY CONTRACTS
PROCURED BY THE MARYLAND ENVIRONMENTAL SERVICE SHALL BE SUBJ ECT TO A
COMMUNITY BENEFIT AG REEMENT.
(D) (1) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY
OPERATING A THERMAL ENERGY NETWORK SYSTE M SHALL PROVIDE ITS EMPLOYEE
BARGAINING UNIT AN O PPORTUNITY TO PROVID E MAINTENANCE AND OP ERATIONS
FOR ANY THERMAL ENER GY NETWORK SYSTEM .
(2) (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS PARAGRAPH , AN
ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY CONTRACT ANY
WORK UNDER THIS SUBT ITLE NOT CONDUCTED B Y THE COMPANY ’S EMPLOYEE
BARGAINING UNIT TO A QUALIFIED CONTRACTOR .
(II) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER
COMPANY SHALL REQUIR E A CONTRACTOR OR SU BCONTRACTOR ON A PRO JECT
UNDER THIS SUBTITLE TO:
1. PAY THE AREA PREVAIL ING WAGE RATE DETERMINED
BY THE COMMISSIONER OF LABOR AND INDUSTRY, INCLUDING WAGES AND FRINGE
BENEFITS;
Ch. 563 2024 LAWS OF MARYLAND
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2. OFFER HEALTH CARE AN D RETIREMENT BENEFIT S TO
THE EMPLOYEES WORKIN G ON THE PROJECT ;
3. PARTICIPATE IN AN AP PRENTICESHIP PROGRAM
REGISTERED WITH THE STATE OR THE U.S. DEPARTMENT OF LABOR;
4. ESTABLISH AND EXECUT E A PLAN FOR OUTREAC H,
RECRUITMENT , AND RETENTION OF STATE RESIDENTS TO PE RFORM WORK ON THE
PROJECT, WITH AN ASPIRATIONAL GOAL OF 25% OF TOTAL WORK HOU RS
PERFORMED BY MARYLAND RESIDENTS , INCLUDING RESIDENTS WHO ARE:
A. RETURNING CITIZENS ;
B. WOMEN;
C. MINORITY INDIVIDUALS ; OR
D. VETERANS;
5. HAVE BEEN IN COMPLIA NCE WITH FEDERAL , STATE,
AND LOCAL WAGE AND H OUR LAWS FOR THE PREVIOUS 3 YEARS;
6. BE SUBJECT TO ALL STATE REPORTING AND
COMPLIANCE REQUIREME NTS; AND
7. MAINTAIN ALL APPROPR IATE LICENSES IN GOO D
STANDING; AND
8. ESTABLISH AND EXECUT E A PLAN TO MEET OR
EXCEED THE MINORITY BUSINESS ENTERPRISE PARTICIPATION GOALS
ESTABLISHED UNDER SU BSECTION (D)(3) OF THIS SECTION.
(E) (D) (1) THE FINDINGS AND EVID ENCE RELIED ON BY TH E GENERAL
ASSEMBLY FOR THE CONT INUATION OF THE MINORITY BUSINESS ENTERPRISE
PROGRAM UNDER TITLE 14, SUBTITLE 3 OF THE STATE FINANCE AND
PROCUREMENT ARTICLE ARE INCORPORA TED IN THIS SUBSECTI ON.
(2) TO THE EXTENT PRACTIC ABLE AND AUTHORIZED BY THE U. S.
CONSTITUTION, AN APPROVED PILOT SY STEM APPLICANT AND T HE MARYLAND
ENVIRONMENTAL SERVICE SHALL COMPLY WITH THE STATE’S MINORITY BUSINESS
ENTERPRISE PROGRAM.
WES MOORE, Governor Ch. 563
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(3) (I) WITHIN 6 MONTHS AFTER THE APP ROVAL OF A PILOT
SYSTEM UNDER § 7–1002(C) OF THIS SUBTITLE , THE GOVERNOR’S OFFICE OF
SMALL, MINORITY, AND WOMEN BUSINESS AFFAIRS, IN CONSULTATION WITH THE
OFFICE OF THE ATTORNEY GENERAL AND THE GAS COMPANY OPERATING THE
APPROVED PILOT SYSTE M, SHALL ESTABLISH A CL EAR PLAN FOR SETTING
REASONABLE AND APPRO PRIATE MINORITY BUSI NESS ENTERPRISE PART ICIPATION
GOALS AND PROCEDURES FOR THE PILOT SYSTEM .
(II) TO THE EXTENT PRACTIC ABLE, THE GOALS AND
PROCEDURES SPECIFIED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH SH ALL BE
BASED ON THE REQUIRE MENTS OF TITLE 14, SUBTITLE 7 OF THE STATE FINANCE
AND PROCUREMENT ARTICLE AND THE REGUL ATIONS IMPLEMENTING THAT
SUBTITLE.
(4) (I) A GAS COMPANY OPERATIN G A PILOT SYSTEM AND THE
MARYLAND ENVIRONMENTAL SERVICE SHALL SUBMIT AN ANNUAL REPORT ON
MINORITY ENTERPRISE PARTICIPATION TO THE COMMISSION.
(II) THE COMMISSION SHALL PROV IDE ANY REPORTS
RECEIVED UNDER SUBPA RAGRAPH (I) OF THIS PARAGRAPH TO THE GENERAL
ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE.
7–1005.
(A) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY
OWN, MANAGE, AND RECOVER COSTS AS SOCIATED WITH A THER MAL ENERGY
NETWORK SYSTEM SUBJE CT TO THE APPROVAL O F THE COMMISSION.
(B) AN ELECTRIC COMPANY , A GAS COMPANY , OR A WATER COMPANY M AY
DRILL A GEOTHERMAL B OREHOLE IN A PUBLIC UTILITY RIGHT–OF–WAY WHERE
FEASIBLE TO MEET THE REQUIREMENTS OF THIS SUBTITLE.
7–1006.
THE COMMISSION MAY RETAIN INDEPENDENT CONSULTA NTS AND EXPERTS
TO:
(1) ASSIST THE COMMISSION WITH ITS E VALUATION OF PILOT
SYSTEM APPLICATIONS UNDER § 7–1002(C) OF THIS SUBTITLE; AND
(2) SUPPORT THE COMMISSION IN THE COM PLETION OF ANY
REQUIREMENTS UNDER T HIS SUBTITLE.
Article – Environment Ch. 563 2024 LAWS OF MARYLAND
– 18 –
1–701.
(a) (1) In this section the following words have the meanings indicated.
(7) “Overburdened community” means any census tract for which three or
more of the following environmental health indicators are above the 75th percentile
statewide:
(i) Particulate matter (PM) 2.5;
(ii) Ozone;
(iii) National Air Toxics Assessment (NATA) diesel PM;
(iv) NATA cancer risk;
(v) NATA respiratory hazard index;
(vi) Traffic proximity;
(vii) Lead paint indicator;
(viii) National Priorities List Superfund site proximity;
(ix) Risk Management Plan facility proximity;
(x) Hazardous waste proximity;
(xi) Wastewater discharge indicator;
(xii) Proximity to a Concentrated Animal Feeding Operation (CAFO);
(xiii) Percent of the population lacking broadband coverage;
(xiv) Asthma emergency room discharges;
(xv) Myocardial infarction discharges;
(xvi) Low–birth–weight infants;
(xvii) Proximity to emitting power plants;
(xviii) Proximity to a Toxic Release Inventory (TRI) facility;
(xix) Proximity to a brownfields site; WES MOORE, Governor Ch. 563
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(xx) Proximity to mining operations; and
(xxi) Proximity to a hazardous waste landfill.
(8) “Underserved community” means any census tract in which, according
to the most recent U.S. Census Bureau Survey:
(i) At least 25% of the residents qualify as low–income;
(ii) At least 50% of the residents identify as nonwhite; or
(iii) At least 15% of the residents have limited English proficiency.
Article – Housing and Community Developm ent
4–1801.
(a) In this subtitle the following words have the meanings indicated.
(c) “Area median income” means the median household income for the area
adjusted for household size as published and annually updated by the United States
Department of Housing and Urban Development.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2024.
Approved by the Governor, May 9, 2024.