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REAL and Green Mountain filed the motion for a preliminary injunction in the United States District Court for the District of Maryland, asking the court to provide relief before the new law’s speech restrictions start being enforced on January 1, 2025.

Plaintiffs (REAL and Green Mountain) “[S]eek declaratory and injunctive relief against the Act to prevent the imminent, irreparable injuries it is about to impose on suppliers of renewable residential electricity in Maryland. The Act’s “green power” provisions are central to the Act’s overall scheme, which sought to create one regulatory scheme for the renewable electricity market and another regulatory scheme for the standard electricity market. Without the “green power” provisions, suppliers in the renewable electricity market will be subject to the regulatory scheme the General Assembly intended to apply to suppliers in the standard electricity market, contrary to the legislature’s intent. In these circumstances, the Act is inseverable and must be enjoined entirely.”

Defendants to this lawsuit include:

• Defendant Anthony G. Brown is the Attorney General of Maryland is sued in his official capacity. 
• Defendant Frederick H. Hoover is the Chair of the PSC. He is sued in his official capacity.
• Defendant Michael T. Richard is a Commissioner of the PSC is sued in his official capacity.
• Defendant Kumar P. Barve is a Commissioner of the PSC is sued in his official capacity.
• Defendant Bonnie A. Suchman is a Commissioner of the PSC is sued in her official capacity.

REAL and Green Mountain sought from the court: (1) a declaratory judgment against the defendants that SB1 is unconstitutional and inseverable, and (2) preliminary and permanent injunctive relief preventing the implementation and enforcement of SB 1.

Excerpts from REAL’s Press Release:

Maryland’s current Renewable Portfolio Standard (RPS) requires both utilities and suppliers to source 36% of the electricity sold in the state with premium RECs from specific types of energy resources and geographic areas. 

The legislation also directs the Maryland Public Service Commission to set an annual price cap for all RECs marketed as green energy by retail energy suppliers.

REAL’s lawsuit explains that the marketing restrictions on renewable energy plans in SB1 are unconstitutional, as REAL’s members use the terms prohibited by statute consistently with the guidance set forth by the EPA and Federal Trade Commission to highlight to consumers the environmental benefits provided by voluntary RECs. SB1 prohibits retail energy suppliers from using words such as “renewable,” “green,” and “clean” to market and communicate truthful information to customers about how plans with voluntary RECs can help reduce carbon emissions and combat climate change, among other benefits. 

The prohibited and compelled speech provisions contained in SB1 violate the First Amendment to the U.S. Constitution and Article 40 of the Maryland Declaration of Rights. These and other restrictions imposed by SB1 will cause irreparable harm by stifling suppliers’ ability to market their products, thus leading to a loss of business and consumer choice in Maryland’s energy market. {***}

Excerpts from the lawsuit:

{***} “2. The law at issue, introduced in the Maryland General Assembly as Senate Bill 1 and signed into law on May 9, 2024 (the “Act”), purports to be “[a]n Act concerning . . . regulation and consumer protection” in the retail energy supply sector. See generally 2024 Maryland Laws ch. 537 (S.B. 1). But in reality, the Act imposes an environmental speech code on suppliers of renewable residential electricity who—accurately, truthfully, and consistently with federal standards and other states’ laws—describe their products as “renewable,” “green,” “clean,” “ecofriendly,” and the like (collectively, “green power”). 

3. The Act does so by prohibiting suppliers of renewable residential electricity from truthfully and accurately describing their existing products as “green power,” on pain of civil penalties. See Md. Code, Pub. Util. §§ 7-507(k), 7-707(a)–(c). And if suppliers wish to continue to engage in “green power” marketing, they must adopt Maryland’s preferred understanding of those terms, change the products they offer accordingly, and obtain advance approval from the Maryland Public Service Commission (“PSC”) pursuant to a process that does not exist 
4. REAL members like CleanChoice Energy, Inc. (“CleanChoice”), supply renewable residential electricity to customers in Maryland and elsewhere. So too do subsidiaries of REAL members, like Green Mountain, a subsidiary of REAL member NRG Energy, Inc. These entities do so by purchasing renewable energy certificates (also called renewable energy credits)— “RECs,” for short—from all over the country and pairing those RECs with the electricity they supply to their customers. RECs are fungible commodities that embody the renewable attributes of renewable energy generation and are recognized federally and by states as the way to substantiate “green power” claims. 
5. Consistent with the “Green Guides” promulgated by the Federal Trade Commission, as well as the laws of other states in which they sell renewable energy, REAL members and their subsidiaries describe their current renewable energy products—electricity paired with RECs—as “green power” accurately, truthfully, and lawfully. They also make disclosures about their products to the extent necessary to comply with federal standards.
6. Maryland’s conception of “green power,” however, would require REAL members and their subsidiaries to change their current renewable products sold to Maryland customers in order to be able to continue describing those products as “green power.” Specifically, under Maryland’s conception of “green power,” REAL members and their subsidiaries cannot describe their renewable products as “green power” unless they obtain 51% of the RECs paired with their electricity supply to Maryland customers from renewable energy generation sources in and around Maryland. 
7. Further, to describe their products as “green power,” suppliers of renewable residential electricity are forced by the Act to make controversial and inaccurate disclosures about the nature of their product offerings, including the claim that a REC can be sold separately from the “renewable” electricity on which it is based, a claim the Green Guides deem misleading. 
8. Absent relief from the Act’s requirements, REAL members and their subsidiaries either will have to cancel their existing contracts with residential customers (and thus lose customers permanently to the default local utilities) or sell their more expensive products at a substantially lower price and without the ability to describe their product as “green power”—the reason they attract and retain customers in the first place. Either way, then, the speech of REAL members and their subsidiaries will be silenced, and they will lose customers and market share to the default local utilities. 
9. By foisting a speech code on REAL members and their subsidiaries, the Act violates the First Amendment of the U.S. Constitution and Article 40 of the Maryland Declaration of Rights. Maryland’s speech code fails any relevant level of constitutional scrutiny, as any purported interests served by the Act’s “green power” provisions are not sufficiently compelling or serious to justify the speech burdens imposed and those provisions are not sufficiently tailored to serve any purported government interest. 
10. Further, by prohibiting REAL members and their subsidiaries from acquiring certain of their RECs from sources around the country rather than sources in and around Maryland, the Act violates the Commerce Clause of the U.S. Constitution. This prohibition discriminates against interstate commerce by restricting renewable residential electricity suppliers from purchasing RECs they otherwise would from renewable generation sources outside the Maryland region (thereby disfavoring those renewable energy sources) and forcing those suppliers to purchase more RECs from renewable generation sources in the Maryland region (thereby favoring those renewable energy sources). And this prohibition unduly burdens interstate commerce as well—from a renewability standpoint, local and national RECs are fungible and provide the same benefits towards ameliorating climate change and related issues. The burdens imposed by the Act on renewable generation sources outside the Maryland region outweigh any putative local benefit from this prohibition. 
11. Plaintiffs seek declaratory and injunctive relief against the Act as a whole to prevent the imminent, irreparable injuries it is about to impose on suppliers of renewable residential electricity in Maryland. The Act’s “green power” provisions are central to the Act’s overall scheme, which sought to create one regulatory scheme for the renewable electricity market and another regulatory scheme for the standard electricity market. Without the “green power” provisions, suppliers in the renewable electricity market will be subject to the regulatory scheme the General Assembly intended to apply to suppliers in the standard electricity market, contrary to the legislature’s intent. In these circumstances, the Act is inseverable and must be enjoined entirely.”  {***}

REAL & Green Mountain Lawsuit  (10/01/2024)
Civil Action No. 1:24-cv-2820