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Say It’s Not So! – Maryland Retail Energy Reform Bill Passes Both Committees & Now Awaits Governor’s Signature
Conference committee amendments passed the Senate on third reading, which substantively align with SB001 most recent version. This enrolled bill is the final version of a measure agreed to by both chambers and has been sent to the governor for approval.
“The act shall be construed to apply only prospectively and may not be applied or interpreted to have any effect on or application to any electricity supply agreement or gas supply agreement that is in effect on or before December 31, 2024.”
Regarding previously reported limits and obligations for retail energy suppliers, the conference committee amendments align with the previously reported requirements under the bill. For example, as previously reported the bill includes the following limitations:
Residential electricity offers – Residential electricity supplier may only offer electricity “at a price that does not exceed the trailing 12–month average of the electric company’s standard offer service rate in the electric company’s service territory as of the date of agreement with the customer.” Also, residential plans may not exceed 12 months in length.
Green Products – A residential retail electric supplier would be permitted to market a green product, defined below, without being subject to the SOS-based price cap, but the supplier’s price under the green plan would need to be approved by the PSC. Moreover, a residential green power plan must be, based on supply or RECs, either 51% green; or 1% higher than the renewable energy portfolio standard for the year the electricity is provided to the customer. Also, green power plans would need to have their RECs sourced from the PJM region on a staggered schedule, from a 0% requirement for the 12-month period starting July 1, 2025, increasing to at least 10% for the 12-month period starting July 1, 2027, and further increasing each year until the bill requires that, beginning July 1, 2035, at least 50% of the RECs shall be generated in the PJM region. In addition, green power plans may not be automatically renewed.
Variable Rates – Variable rates would be banned, with the ban excluding rates with seasonal variation or which vary based on therms consumed in a billing period.
POR – The bill would end Purchase of Receivables (POR) for residential receivables but would not apply to municipal aggregations.
Licensing/Compensation of energy salespersons/contractors/subcontractors/vendors – Beginning July 1, 2025, a person may not engage in the business of an “energy salesperson” in the state unless the person holds a license issued by the PSC. An “energy salesperson” means an individual who is licensed by the commission to sell: (i) electricity or electricity supply services to residential retail electric customers on behalf of an electricity supplier as an employee or agent of the electricity supplier; or (ii) gas or gas supply services to residential retail gas customers on behalf of a gas supplier as an employee or agent of the gas supplier.
Moreover, a licensed energy salesperson may offer or sell electricity supply agreements or gas supply agreements to customers only if the energy salesperson is associated with a licensed electricity supplier or licensed gas supplier, respectively. In addition, a residential retail supplier, “may not pay a commission or other incentive–based compensation to an energy salesperson for enrolling customers.”
The PSC is authorized to require that an energy salesperson must post a bond or other similar instrument if, in the Commission’s judgment, the bond or similar instrument is necessary to ensure an energy salesperson’s financial integrity.
The bill also requires entities which serve as sales contractors or subcontractors of retail suppliers to be licensed, by requiring an “energy vendor” to be licensed by the PSC “Energy vendor” means a person that has a contract or subcontract to provide energy sales services to an electricity supplier or a gas supplier that provides electricity supply services or gas supply services, respectively, to a residential customer.
Marketing requirements or prohibitions – The bill allows the PSC to require or prohibit the use of specific language in a residential energy retailer’s marketing materials, disclaimers, disclosures, and legal documents, including requiring or prohibiting the use of specific language based on service or product type. The PSC may also require a residential energy retailer to post notices and disclosures required under the bill on the retailer’s website.
