By Extending EmPOWER, Maryland Solidifies a Leadership Position on Energy Efficiency

Posted by Daniel Bloom on Apr 26, 2017 4:10:00 PM


In the final days of Maryland’s legislative session, a bill to extend the state’s successful energy efficiency program – known as EmPOWER Maryland – through 2023 became law. With AEE and other efficiency advocates persuading Gov. Hogan not to veto the bill, which had passed the legislature with veto-proof majorities in both houses, the law took effect without his signature, but also with no need for an override vote. The result: an estimated $1.6 billion market opportunity for energy efficiency companies across Maryland unleashed over the next six years.

The enactment of Senate Bill 184 codifies into law a Maryland Public Service Commission Order requiring the state’s five largest utilities to achieve gross energy savings of at least 2% per year by providing cost-effective energy efficiency and conservation programs and services to their customers. Just as important, the new law signals that Maryland is “open for business” when it comes to energy efficiency, providing businesses with the regulatory and market certainty they need to continue investing in this low-cost resource to meet the needs of Maryland’s electricity customers. 

The new law, like the PSC order, builds on the success to date of EmPOWER Maryland, which has saved ratepayers more than $4 billion since 2008. But securing the extension would not have been possible without an active business community that engaged with key legislators in the General Assembly, the media, and advisors to Gov. Hogan to elevate the visibility of the benefits associated with energy efficiency in Maryland.

Throughout this legislative effort, AEE and its allies were cognizant of what happened with Maryland’s renewable portfolio standard (RPS). A bill to expand the state’s RPS from 20% to 25% by 2020 passed last year with veto-proof majorities, but was vetoed by Gov. Hogan after the legislative session was over. The General Assembly was able to override the veto, but only after legislators reconvened this year. In order to avoid a situation where the EmPOWER extension ordered by the PSC continued under the cloud of a gubernatorial veto, SB 184 had to make it into law with the governor’s approval – or acquiescence – and if not, at least in time for an override vote.

That meant a full-on push from Winter to Spring. Starting at the end of January, AEE and its member companies testified before the Senate Finance Committee on SB 184, as well as before the House Economic Matters Committee on House Bill 514, companion legislation introduced in the lower chamber. As a follow-up to that testimony, AEE Institute prepared a fact sheet summarizing the benefits of EmPOWER Maryland for residential, commercial, and industrial customers in the state, as well as the state’s economy. Those benefits included avoiding the need for expensive new power plants, reducing strain on the state’s aging electric grid, and bolstering an energy efficiency workforce that already supports more than 67,000 jobs in Maryland.

Then, in mid-February, AEE Institute convened a group of EmPOWER stakeholders in Annapolis to discuss how best to educate Maryland residents on the broad benefits of energy efficiency. Although utilized in every corner of the state, energy efficiency maintains a lower profile than traditional power generation assets. AEE Institute’s Energy Efficiency Roundtable served as a launching pad for public outreach efforts, attracting more than 25 public and private participants, including low-income energy efficiency program providers, home performance contractors, and utility efficiency program administrators.

Following the Roundtable, AEE and other organizations compiled a business support letter for EmPOWER Maryland that was later disseminated to media outlets such as the Baltimore Sun and Annapolis Gazette. That letter was signed by many companies, hospitals, and trade associations operating in Maryland. These included MGM Resorts International, Ameresco, Schneider Electric, Whirlpool, FirstFuel, Veolia North America, Nest, the National Electrical Manufacturers Association, Union Hospital, and Efficiency First Maryland.

Following coverage of the bill’s passage in the House, the Baltimore Sun published an editorial on “Maryland’s cost-effective approach to energy,” arguing that extending EmPOWER Maryland should be “an easy call” for Gov. Hogan. Soon after the Sun editorial, AEE brought member companies back to Annapolis to meet directly with members of the governor’s staff to address the investments those businesses were already making in the state through the use of incentives offered by utilities under EmPOWER Maryland. The programs offered under EmPOWER Maryland help homeowners and small businesses save energy by offering incentives and technical assistance for adding insulation, sealing air leaks, and installing more efficient appliances. EmPOWER programs also facilitate the installation of efficient commercial lighting and capital-intensive energy efficiency improvements at industrial facilities. 

Taken together, these actions put SB 184 on a path to become law. With veto-proof majorities secured in both chambers, Gov. Hogan chose not to veto the bill, allowing it to become law on April 6, the last day he could take action on the bill and only four days before the General Assembly adjourned for 2017. As a result, Maryland now has one of the most aggressive energy efficiency resource standards in the country.

With the responsibility for implementing that standard now shifting to the Maryland Public Service Commission, AEE, its members, and AEE Institute stand ready to provide our unique expertise on program design so that EmPOWER Maryland continues to help the state’s residential, commercial, and industrial customers save energy – and money.

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Topics: State Policy