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Staff Counsel Files Comments On Green Product Pricing
From Maryland PSC Staff Comments:
[ *** ] Staff recommends that the Commission set a maximum green product price that includes the most recent 12-month average SOS rate of the customer’s respective utility service territory, along with the Tier 2 alternative compliance payment (“ACP”) of $15 per MWh. Previously, Staff had recommended using the average Tier 2 Renewable Energy Credit (“REC”) price in the previous year’s RPS annual reports as a baseline. However, as the difference between the two figures is under $0.003 per kWh, Staff chose the full ACP to reflect that Tier 2 REC prices may have increased throughout 2025. This methodology limits a supplier’s ability to make an unreasonable profit that would result if the pricing model used Tier 1 prices as a baseline.
The green product price for the respective service territory will be calculated by taking the difference between the current year’s RPS requirements and the green power percentage that is being offered in the subject product. For example, if the green product is comprised of 51% green power, then this will be subtracted from that year’s RPS requirements. For 2026 the total RPS requirement is 40.5%.4 The resulting percentage would be 51% – 40.5% = 10.5%. This 10.5% will be known as the Green Power Premium Factor (“GPPF”). Under this model, suppliers will be rewarded for offering a greener product by being able to achieve a higher GPPF.
The GPPF is then multiplied by the Tier 2 ACP which produces the Green Product Premium (“GPP”) that the supplier will be permitted to add on to the most recent 12-month average SOS rate in the customer’s respective service territory. This method should limit the ability for a supplier to game the system by marketing a green product that corresponds to the percentage of green power offered in the product while purchasing the least expensive RECs, i.e. Tier 2 RECs. Table 1 shows this calculation with a 51% green power product, which is the minimum requirement for a green product pursuant to PUA §7–707(c). [ *** ]
Staff Comments (ML# 323355) (10/15/2025)
9757 (10/09/2024)
(Petition of Commission Technical Staff For Green Product Pricing)
