Maryland Energy Efficiency Advocates Provide Recommendations on 2024-2026 EmPOWER plans to the Public Service Commission
On November 8, 2023, Maryland Energy Efficiency Advocates (MEEA) coalition, represented by Susan Stevens Miller of Earth Justice and Jim Grevatt of Energy Futures Group, presented to the Maryland Public Service Commission (PSC) on MEEA’s recommendations regarding EmPOWER Maryland 2024-2026 proposals. Watch MEEA’s testimony here. You can also read MEEA’s full written comments here.
The presentation was a part of the PSC formal proceeding for the EmPOWER 2024-2026 cycle. MEEA’s recommendations cover proposals submitted this summer by the state’s regulated utilities and the state Department of Housing & Community Development (DHCD) and were the culmination of months of analysis and conversation among MEEA members, including data requests to each utility. We put the time in because these plans affect millions of rate-payer dollars, thousands of Maryland households, and our collective future as a state in terms of climate resilience and energy equity. Moreover, this is a moment of particular importance as millions of federal dollars will be coming into Maryland in 2024 to support energy efficiency and electrification; these new funds must be carefully coordinated with existing programs if state residents are to receive the maximum possible benefits and the state is to achieve its ambitious climate goals.
Created by state law in 2008, EmPOWER Maryland is designed to promote efficient use and conservation of energy across the state in order to ensure a stable energy supply while also reducing greenhouse gas emissions and providing other benefits to state residents. Surcharges on rate-payers’ bills fund the program, which is operated by each utility in their service area and DHCD for low-income households across service areas. Utilities offer programs for residential, commercial, and industrial clients covering various incentives to promote efficiency in new construction, appliance upgrades, behavior and more. DHCD reaches low-income clients through free services including home energy savings kits, energy audits, weatherization, and financing support for affordable multifamily housing
The PSC regulates the state’s public utility providers, including their EmPOWER programs. EmPOWER proposals must be submitted to the PSC for approval every three years, covering implementation strategies for the next three years. Of the five PSC Commissioners, three were appointed this year by Governor Wes Moore, meaning that fresh sets of eyes are looking at these proposals.
While MEEA recommended approving DHCD’s plan as-is, the coalition recommended that the five utility company plans should only be approved for the year 2024, with new proposals to be submitted this summer for 2025-2026 that incorporate our recommended changes and address outstanding questions. Beyond this major recommendation, we focused on several key issues:
Proposed programs vary widely on costs for the same programs and on a portfolio level, meaning that ratepayers in one service territory may receive a very different level of service than those adjacent to them (See Figure 13). This also makes it hard to evaluate if the programs are maximizing cost effectiveness to keep bill impacts minimal. The PSC should give a close look at this variation through an audit of costs, which will ensure best practices are being adopted and programs are equitable across territories.
Programs aimed at fostering rate-payer behavior changes make up too large a percentage of utilities’ proposed plans (see Figure 16) and should be capped at no more than 10% of savings targets, as these measures do not provide the same long-term energy efficiency and greenhouse gas reduction benefits as, for example, upgraded appliances and infrastructure.
Some utilities propose to continue to incentivize the installation of new gas-powered appliances and the construction of new gas-powered homes. For new construction there is a particular concern because the data shows that the vast majority of new gas meter installations require expanding the gas infrastructure through new main construction (see Table 5). Considering the state’s ambitious climate goals—which will necessitate a very rapid state-wide shift away from methane gas and towards electricity—all incentives for energy obtained from gas should be removed. This will ensure that customers receive a consistent message from the state and receive incentives for the best most affordable technologies.
Rather than utility-run programs targeting or serving low-income households, utilities should ensure that limited-income ratepayers are directed to DHCD programs as a one-stop-shop through which they can receive a higher level of benefits.
Further, the PSC should require that revised plans for future years include eliminating administrative redundancies and pursue joint program implementation wherever practicable.
The PSC should establish provisions for the creation of a uniform state-wide electrification program, also called a “third-party implementor” to assist state residents in switching from fossil fuel power to all-electric power. This will ensure that offerings are uniform and coordinated throughout the state.
The PSC should protect energy burdens by either establishing a percent of income payment plan mechanism for income-qualified households to limit total energy burdens to no more than six percent of income, or at a minimum establishing a $50 surcharge cap for low-income households.
In addition to our comments, we highlight the work of the staff at the Maryland Office of People’s Counsel (OPC), an independent state agency that advocates for residential utility customers, who provided their own highly detailed and specific comments, many of which align with ours. You can watch OPC’s testimony here. We also applaud the PSC’s decision to open the hearing with public comments (which you can watch here).
The PSC is expected to make its decisions in December 2023. We appreciate the opportunity to give input on these plans and hope for a favorable outcome to the PSC’s deliberations.
