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The Maryland Public Service Commission (PSC) adopted the green product pricing order that is to be based on the most recent trailing 12-month average standard offer service rate plus a green power adder based on the Tier 2 alternative compliance payment price.

From Order: 

[ *** ] PUA § 7-707(c) states that retail electricity suppliers marketing to residential customers may not market electricity as green power unless the percentage of the green power being offered exceeds the greater of 51%, or 1% higher than the current RPS for the year the electricity is provided to the customer. PUA § 7-707(c)(2) requires retail electricity suppliers who market and sell green power to charge rates that do not exceed a Commission-approved baseline.

PUA § 7-707(d)(2) requires that the Commission hold a proceeding each year to set a price per MWh for electricity marketed as green power. This price may not be exceeded by an electricity supplier unless a supplier requests that the Commission hold a proceeding for that supplier’s green product pursuant to PUA § 7-707(d)(3), at which their green product price may be established. PUA § 7-707(d)(2)(iii) requires the Commission to consider the following factors in setting the baseline green power price: 

(1) the price of the energy purchased, including the total cost of the renewable energy credits;

(2) the amount of electricity that is eligible for inclusion in meeting the renewable energy portfolio standard;
(3) the state in which the electricity was generated; and
(4) applicable market data.PUA §7-707(d)(2)(iii) also allows the Commission to consider whether the purchase of RECs was bundled with a power purchase agreement from the energy sources associated with the credit.

The General Assembly passed SB 1 to strengthen consumer protections against deceptive practices in the retail electricity market. The legislation calls for increased Commission oversight in order to prevent unfair retail supplier price gouging. The Commission is tasked with establishing a maximum price that suppliers may charge residential customers for green power. The Commission recognizes its responsibility to set a price guideline that limits a supplier’s ability to make an unfair profit, as well as the challenges that go with setting the price cap, given the ways in which green products may vary, including the type and source of the green power as well as how “green” the product actually is.

After careful consideration of the filings and testimony received in this matter, as well as the requirements and guidance provided by SB 1, the Commission approves Staff’s proposal for green product pricing under PUA § 7-707(d)(2). The Commission directs retail electricity suppliers in each service territory that offer green power to residential customers to do so at a price not exceeding the most recent 12-month average SOS rate of the customer’s respective utility service territory, along with the Tier 2 ACP of $15 per MWh, including the GPPF and GPP as identified by Staff. 

The Commission continues to find the trailing 12-month average SOS rate to be beneficial in that it provides actual, known figures that do not risk overestimation, require the need for speculation, or cause delay, whereas the use of prospective SOS rates might. Trailing average SOS rates are required to be posted on utility websites to enforce transparency and enable supplier compliance, and allow the Commission, suppliers, and the general public to access data on trailing SOS rates regularly. The Commission finds that the use of trailing 12-month average SOS rates also protects against unfair supplier profits, thereby conforming to the statutory intent of SB 1.

Similarly, the proposal by Staff to utilize the Tier 2 ACP price allows for the use of accessible, substantiated data, as the PUA verifies the cost. The use of the Tier 2 ACP also limits the ability of suppliers to achieve an unfair profit by basing pricing off of the least expensive RECs. This decision does not prevent retail electricity suppliers from making a fair profit, as PUA § 7-707(d)(3) provides a means for suppliers that wish to use the more expensive Tier 1 RECs to seek the Commission’s authority to charge a price higher than the established baseline. 

The Commission also finds that Staff’s proposal enables variation in the amount of RECs composed in a green power product through the GPPF. As a result, it incentivizes green power by reducing greenhouse gas emissions and eliminating carbon-fueled generation, establishing a market for electricity from renewable elements within the State, and enabling flexibility based on the amount of RECs eligible for inclusion in meeting the renewable portfolio standard.

The Commission notes that the SB 1 built-in review mechanism in PUA § 7- 707(d)(2) requires the Commission to establish a maximum green product price annually, thereby allowing subsequent proceedings to ideally inform the Commission and interested parties of lessons learned, price fluctuations, and market indicators. Unfortunately, with there being no green product offers currently available for customers to select on the Maryland Electric Choice website, and with there apparently having been no green product offers available earlier in 2025, the Commission and interested parties are without data and feedback pertaining to prior examples. Nonetheless, the Commission continues to provide a directive intended to reflect reasonable, low-risk considerations for the green power pricing requirements. [ *** ] 

Order No. 91975 (11/07/2025)
9757 (10/09/2024)
(Petition Of Commission Technical Staff For Green Product Pricing)