# Public Utilities (GPU)

## Title 7. Gas, Electric, and Water Companies

### Subtitle 12. Energy Solicitation and Procurement

#### Section 7-1201

(a) In this part the following words have the meanings indicated.

(b) "Dispatchable energy generation" means a generating station or energy storage device with:

  (1) an effective load carrying capability of at least 65%, as determined by PJM Interconnection's most recent ELCC Class Ratings; and

  (2) a lower greenhouse gas emissions profile than coal or oil energy generating stations.

(c) "Effective load carrying capability" or "ELCC" means the expected capacity contribution of an energy resource during PJM Interconnection's operating hours when there is high electricity demand and low resource output.

(d) "Effective nameplate capacity" means the amount of energy an energy storage device can deliver continuously to the electric system over a period of at least 4 hours.

(e) "Energy storage device" has the meaning stated in Sec. 7-216 of this title.

(f) "Generating station" has the meaning stated in Sec. 7-207 of this title.

(g) "Large capacity energy resource" means a generating station or energy storage device that has a capacity rating equal to or greater than 20 megawatts after accounting for the effective load carrying capability.

#### Section 7-1202

(a) An application for a proposed project under Parts III and IV of this subtitle is subject to a community benefit agreement.

(b) A community benefit agreement shall:

  (1) promote increased opportunities for local businesses and small, minority, women-owned, and veteran-owned businesses in the clean energy industry;

  (2) ensure the timely, safe, and efficient completion of the project by:

    (i) facilitating a steady supply of highly skilled craft workers who shall be paid not less than the prevailing wage rate determined by the Commissioner of Labor and Industry under Title 17, Subtitle 2 of the State Finance and Procurement Article; and

    (ii) guaranteeing that the construction work performed in connection with the project will be subject to an agreement that:

      (1) establishes the terms and conditions of employment at the construction site of the project or a portion of the project;

      (2) guarantees against strikes, lockouts, and similar disruptions;

      (3) ensures that all work on the project fully conforms to all relevant State and federal laws, rules, and regulations, including all required training for employees;

      (4) creates mutually binding procedures for resolving labor disputes arising during the term of the dispatchable energy generation project;

      (5) sets forth other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

      (6) binds all contractors and subcontractors to the terms of the agreement through the inclusion of appropriate provisions in all relevant solicitation and contract documents;

  (3) promote safe completion of the project by ensuring that at least 80% of the craft workers on the project have completed a 10-hour Occupational Safety and Health Administration course;

  (4) promote career training opportunities in the manufacturing, maintenance, and construction industries for local residents, veterans, women, minorities, and formerly incarcerated individuals;

  (5) include provisions for local hiring and the hiring of historically disadvantaged groups;

  (6) use locally, sustainably, and domestically manufactured construction materials and components to the extent practicable;

  (7) require the use of skilled local labor, particularly with regard to the construction and manufacturing components of the project, using methods including outreach, hiring, and referral methods that are affiliated with registered apprenticeship programs under Title 11, Subtitle 4 of the Labor and Employment Article; and

  (8) authorize the Maryland Department of Labor and the Commission to consider, review, and enforce a storage developer or energy developer's compliance with any community benefit agreement.

#### Section 7-1203

The Commission may contract for the services of independent consultants and experts to implement and execute any part of this subtitle.

#### Section 7-1206

(a)

  (1) On or before October 1, 2025, and at other times as provided in subsection (b) of this section, the Commission shall issue one or more solicitations for proposals for the construction or expansion of:

    (i) dispatchable energy generation; and

    (ii) large capacity energy resources.

  (2) The Commission shall set the closing date for the solicitation period to be not sooner than 30 days after issuing the request for proposals under paragraph (1) of this subsection.

(b) The Commission may provide for an additional solicitation period if the capacity specified under Sec. 7-1208(d)(1) of this subtitle has not been met during the initial solicitation period.

(c) The Commission shall provide to the Power Plant Research Program a copy of each proposal received in response to the solicitation.

(d)

  (1) Except as provided in paragraph (2) of this subsection, the Commission may not approve or develop a financial commitment for the costs related to the construction or operation of a dispatchable energy generation project or large capacity energy resource project approved in accordance with this part.

  (2) A dispatchable energy generation project or large capacity energy resource project approved in accordance with this part may participate in other processes under which ratepayer funds are awarded to dispatchable energy generation or large capacity energy resources.

#### Section 7-1207

The Commission shall include specifications in a solicitation issued under Sec. 7-1206 of this subtitle that require each proposal for a dispatchable energy generation project and large capacity energy resource project to:

(1) if the project is a natural gas energy generating station, ensure that the project can be converted to use only hydrogen or a zero-emissions biofuel as the energy source when the Commission determines that the conversion is feasible;

(2) include a detailed description of the timeline for construction of the project, including:

  (i) identifying the entity that has ownership or site control of the project site;

  (ii) queue position for PJM approval;

  (iii) the ability to procure materials, including turbines and other pipeline materials; and

  (iv) any information that demonstrates the applicant's:

    (1) readiness to apply for a certificate of public convenience and necessity under Sec. 7-207 or Sec. 7-207.4 of this title as soon as is reasonably feasible after receiving approval for the project, including the anticipated application date; and

    (2) ability to develop the project within the timeline presented;

(3) include a description of the location of the project site, including:

  (i) the proximity of the site to existing transmission lines and rights-of-way; and

  (ii) whether the project would be retrofitting a current or previous generating station site;

(4) if applicable, include a description of:

  (i) the type and amount of co-located energy generation from Tier 1 renewable sources, as defined in Sec. 7-701 of this title, that would be used with the project;

  (ii) the amount of co-located energy storage that would be used with the project;

  (iii) the use of carbon capture or sequestration technology to mitigate greenhouse gas emissions from the project; and

  (iv) the amount of hydrogen or zero-emissions biofuels that the project will mix with natural gas for energy generation; and

(5) state the emissions intensity of the generation output over the life of the project.

#### Section 7-1208

(a)

  (1) Within 45 days after the closing date for the solicitation period set in accordance with Sec. 7-1206 of this subtitle or sooner as determined by the Commission, the Power Plant Research Program shall recommend to the Commission proposals to be authorized to utilize the expedited certificate of public convenience and necessity process under Sec. 7-207.4 of this title.

  (2) The Power Plant Research Program shall base its recommendations on the information in the proposals received and the specifications listed in Sec.Sec. 7-1207 and 7-1209 of this subtitle.

(b) Subject to subsection (c) of this section and after considering the recommendations of the Power Plant Research Program made under subsection (a) of this section, unless the Commission grants a request for an extension for good cause, not later than 60 days after the close of the solicitation period the Commission shall approve, conditionally approve, or deny a proposal submitted in response to a solicitation issued under Sec. 7-1206 of this subtitle.

(c) In addition to the criteria specified in Sec. 7-1207 of this subtitle, the Commission shall determine which proposals to approve based on the factors and requirements specified in Sec. 7-1209 of this subtitle.

(d)

  (1) Subject to paragraph (2) of this subsection, the combined total capacity of dispatchable energy generation projects and large capacity energy resource projects approved under this section shall be greater than the combined summer peak capacity profile of coal and oil energy generating stations in the State as outlined under Table 9 of the Commission's Ten-Year Plan (2024-2033) of Electric Companies in Maryland.

  (2) The combined total capacity of natural gas dispatchable energy generation projects and large capacity energy resource projects approved under this section may not exceed the combined summer peak capacity profile of coal and oil energy generating stations in the State as outlined under Table 9 of the Commission's Ten-Year Plan (2024-2033) of Electric Companies in Maryland.

(e) Every 5 years after the date that a natural gas dispatchable energy generation project or large capacity energy resource project becomes operational under a certificate of public convenience and necessity issued under Sec. 7-207.4 of this title, the owner or operator of the natural gas dispatchable energy generation or large capacity energy resource shall submit to the Commission a report regarding the feasibility of converting the natural gas dispatchable energy generation or large capacity energy resource to the use of only hydrogen or zero-emissions biofuel.

(f) An approval or conditional approval of a project under this section does not guarantee that the project will be issued a certificate of public convenience and necessity under Sec. 7-207 or Sec. 7-207.4 of this title.

#### Section 7-1209

(a)

  (1) Except as provided in paragraph (2) of this subsection and subject to paragraph (3) of this subsection, the Commission may approve up to 10 proposals to be eligible to undergo the expedited certificate of public convenience and necessity process under Sec. 7-207.4 of this title.

  (2) The Commission may approve more than 10 proposals to be eligible to undergo the expedited certificate of public convenience and necessity process under Sec. 7-207.4 of this title only if the Commission determines that:

    (i) the Commission has sufficient resources to complete that number of expedited reviews of applications for a certificate of public convenience and necessity under Sec. 7-207.4 of this title; and

    (ii) the number of expedited reviews of applications for a certificate of public convenience and necessity under Sec. 7-207.4 of this title is in the public interest.

  (3) If not more than 10 projects respond to a solicitation issued under Sec. 7-1206 of this subtitle, the Commission shall approve, subject to Sec. 7-1208(d)(2) of this subtitle, all projects that apply for the solicitation.

(b)

  (1) For the purpose of this subsection, a transmission energy storage device shall be considered a non-emissions-emitting project.

  (2) Subject to paragraph (3) of this subsection, the Commission shall approve 4 non-emissions-emitting projects to every 1 emissions-emitting project.

  (3) The Commission may waive the requirement under paragraph (2) of this subsection if a sufficient number of applications for projects that meet the requirement are not received.

(c)

  (1) In determining which proposals to approve, the Commission shall prioritize dispatchable energy generation projects over large capacity energy resources.

  (2) In addition to the prioritization in paragraph (1) of this subsection, if the Commission receives more than 10 proposals or determines that more than 10 proposals may be approved under Sec. 7-1208 of this subtitle, the Commission shall base the approvals on:

    (i) which projects will provide the highest capacity value to the State;

    (ii) the timeliness of a project to begin construction;

    (iii) the timeliness of a project to begin operation; and

    (iv) which projects have the lowest emissions intensity.

(d) The Commission shall determine when the proceedings for a certificate of public convenience and necessity under Sec. 7-207.4 of this title will begin for a proposal approved under this part.

(e) The Commission may contract for the services of independent consultants and experts in evaluating and comparing whether a proposal shall be approved to be eligible to undergo an expedited certificate of public convenience and necessity process under Sec. 7-207.4 of this title.

(f) A proposal that is not approved to be eligible to undergo an expedited certificate of public convenience and necessity process under Sec. 7-207.4 of this title may apply for a certificate of public convenience and necessity under Sec. 7-207 of this title.

#### Section 7-1212

(a)

  (1) After the effective date of Commission regulations implementing this part, a person may submit an application to the Commission for approval of a proposed nuclear energy generation project, including an application to upgrade the generation capabilities of an existing nuclear energy generating station.

  (2) For an application submitted in accordance with paragraph (1) of this subsection, the long-term pricing schedule shall be based only on any new generation proposed in the application, including new generation at an existing nuclear energy generating station.

(b)

  (1) On receipt of an application for approval of a proposed nuclear energy generation project, the Commission shall:

    (i) open an application period during which other interested persons may submit applications for approval of a proposed nuclear energy generation project; and

    (ii) provide notice that the Commission is accepting applications for approval of proposed nuclear energy generation projects.

  (2) The Commission shall set the closing date for the application period to be not sooner than 90 days after the notice provided under paragraph (1) of this subsection.

(c) The Commission shall provide at least two additional application periods before January 1, 2031.

(d) The Commission may provide additional application periods that meet the requirements of this section.

#### Section 7-1213

(a) Subject to subsection (b) of this section, the Commission shall approve, conditionally approve, or deny an application submitted under Sec. 7-1212 of this subtitle within 1 year after the close of the application period.

(b) The Commission may extend the time to approve, conditionally approve, or deny an application under subsection (a) of this section for good cause.

#### Section 7-1214

An application submitted for a nuclear energy generation project under Sec. 7-1212 of this subtitle shall include:

(1) a detailed description and financial analysis of the project;

(2) the proposed method of financing the project, including documentation demonstrating that the applicant has applied for all current eligible State and federal grants, rebates, tax credits, loan guarantees, and other programs available to offset the cost of the project or provide tax advantages;

(3) a commitment that the applicant will use best efforts to apply for all eligible State and federal grants, rebates, tax credits, loan guarantees, or other similar benefits as those benefits become available;

(4) a cost-benefit analysis that shall include, at a minimum:

  (i) a detailed input-output analysis of the impact of the project on income, employment, wages, and taxes in the State;

  (ii) detailed information concerning assumed employment impacts in the State, including the expected duration of employment opportunities, the salary of each position, and other supporting evidence of employment impacts;

  (iii) an analysis of any impact on residential, commercial, and industrial ratepayers over the life of the project;

  (iv) an analysis of any long-term effect on energy and capacity markets as a result of the project;

  (v) an analysis of any impact the project would have on businesses in the State;

  (vi) an analysis of the anticipated environmental benefits, health benefits, and economic impacts of the project to the citizens of the State; and

  (vii) an analysis of other benefits resulting from the project, including increased in-State construction, operation and maintenance needs, and equipment purchases;

(5) a proposed long-term pricing schedule for the project that shall specify a price for the generation attributes, including the energy, capacity, ancillary services, and environmental attributes;

(6) a decommissioning and waste storage plan for the project, including provisions for decommissioning or waste storage as required by the U.S. Nuclear Regulatory Commission;

(7) a commitment to abide by the requirements set forth in Sec. 7-1202 of this subtitle;

(8) a description of the applicant's plan for engaging small businesses, as defined in Sec. 14-501 of the State Finance and Procurement Article;

(9) if applicable, the statement specified in Sec. 7-1215(b)(2) of this subtitle; and

(10) any other information the Commission requires.

#### Section 7-1215

(a) The Commission shall use the following criteria to evaluate and compare applications for nuclear energy generation projects submitted during an application period under  Sec. 7-1212 of this subtitle:

  (1) the lowest cost impact on ratepayers of the price set under a proposed long-term pricing schedule;

  (2) potential reductions in transmission congestion prices within the State;

  (3) potential changes in capacity prices within the State;

  (4) potential reductions in locational marginal pricing;

  (5) potential long-term changes in capacity prices within the State from the project as it compares to conventional energy sources;

  (6) the extent to which the cost-benefit analysis submitted under  Sec. 7-1214 of this subtitle demonstrates positive net economic, environmental, and health benefits to the State;

  (7) the extent to which an applicant's plan for engaging small businesses meets the goals specified in Title 14, Subtitle 5 of the State Finance and Procurement Article;

  (8) the extent to which an applicant's plan provides for the use of skilled labor, particularly with regard to the construction and manufacturing components of the project, through outreach, hiring, or referral systems that are affiliated with registered apprenticeship programs under Title 11, Subtitle 4 of the Labor and Employment Article;

  (9) the extent to which an applicant's plan provides for the use of an agreement designed to ensure the use of skilled labor and to promote the prompt, efficient, and safe completion of the project, particularly with regard to the construction, manufacturing, and maintenance of the project;

  (10) the extent to which an applicant's plan provides for compensation to its employees and subcontractors consistent with wages outlined under Title 17, Subtitle 2 of the State Finance and Procurement Article;

  (11) siting and project feasibility;

  (12) the extent to which the project would require transmission or distribution infrastructure improvements in the State; and

  (13) any other criteria that the Commission determines are appropriate.

(b)

  (1) In this paragraph, "minority" means an individual who is a member of any of the groups listed in Sec. 14-301(k)(1)(i) of the State Finance and Procurement Article.

  (2) If an applicant is seeking investors in a proposed nuclear energy generation project, the applicant shall take the following steps before the Commission may approve the proposed project:

    (i) make serious, good-faith efforts to solicit and interview a reasonable number of minority investors;

    (ii) as part of the application, submit a statement to the Commission that lists the names and addresses of all minority investors interviewed and whether or not any of those investors have purchased an equity share in the entity submitting the application;

    (iii) sign a memorandum of understanding with the Commission that requires the applicant to again make serious, good-faith efforts to solicit and interview a reasonable number of minority investors in any future attempts to raise venture capital or attract new investors to the project;

    (iv) sign a memorandum of understanding with the Commission that requires the applicant to use best efforts and effective outreach to obtain, as a goal, contractors and subcontractors for the project that are minority business enterprises, to the extent practicable, as supported by a disparity study; and

    (v) sign a memorandum of understanding with the Commission and skilled labor organizations that requires the applicant to follow the portions of the applicant's plan that relate to the criteria set forth in subsection (a)(8) and (9) of this section.

  (3) The Governor's Office of Small, Minority, and Women Business Affairs, in consultation with the Office of the Attorney General, shall provide assistance to all potential applicants and potential minority investors to satisfy the requirements under paragraph (2)(i) and (iii) of this subsection.

#### Section 7-1216

(a) The Commission may not approve an application for a nuclear energy generation project submitted under Sec. 7-1212 of this subtitle unless:

  (1) the project is connected to the electric system serving the State;

  (2) over the duration of the proposed long-term pricing schedule, the projected net rate impact for an average residential customer, based on annual consumption of 12,000 kilowatt-hours and combined with the projected net rate impact of other nuclear energy generation projects, does not exceed an amount determined by the Commission;

  (3) over the duration of the proposed long-term pricing schedule, the projected net rate impact for all nonresidential customers, considered as a blended average and combined with the projected net rate impact of other nuclear energy generation projects, does not exceed a percentage determined by the Commission of nonresidential customers' total annual electric bills; and

  (4) the price specified in the proposed long-term pricing schedule does not exceed an amount determined by the Commission.

(b) When calculating the projected net average rate impacts for nuclear energy generation projects under this section, the Commission shall consider the net long-term cost per megawatt-hour applied to residential and nonresidential customers.

#### Section 7-1217

(a) An order the Commission issues approving an application for a nuclear energy generation project submitted under Sec. 7-1212 of this subtitle shall:

  (1) specify the long-term pricing schedule;

  (2) specify the duration of the long-term pricing schedule, not to exceed 30 years;

  (3) provide that:

    (i) a payment may not be made under a long-term pricing schedule until electricity supply is generated by the project; and

    (ii) ratepayers and the State shall be held harmless for any cost overruns associated with the project; and

  (4) require that any debt instrument issued in connection with the project include language specifying that the debt instrument does not establish a debt, an obligation, or a liability of the State.

(b) An order approving a nuclear energy generation project vests the owner of the project with the right to receive payments according to the terms in the order.

(c) On or before March 1 each year, the Commission shall report to the Governor and, in accordance with Sec. 2-1257 of the State Government Article, the Senate Committee on Education, Energy, and the Environment and the House Economic Matters Committee on:

  (1) applicant compliance with the minority business enterprise participation goals under Sec. 7-1215(b) of this subtitle; and

  (2) with respect to the community benefit agreement under Sec. 7-1202 of this subtitle:

    (i) the availability and use of opportunities for local businesses and small, minority, women-owned, and veteran-owned businesses;

    (ii) the success of efforts to promote career training opportunities in the manufacturing, maintenance, and construction industries for local residents, veterans, women, and minorities; and

    (iii) compliance with the minority workforce goal under Sec. 7-1202 of this subtitle.

#### Section 7-1218

(a) If the Commission approves an application that demonstrates, based on the criteria specified in Sec. 7-1214 of this subtitle, positive net economic impacts and environmental and health benefits to the State, the Commission shall issue an order in compliance with Sec. 7-1217 of this subtitle.

(b) The Commission may not issue an order to facilitate the financing of a nuclear energy generation project unless the project is subject to a community benefit agreement under Sec. 7-1202 of this subtitle.

#### Section 7-1219

(a) The findings and evidence relied on by the General Assembly for the continuation of the Minority Business Enterprise Program under Title 14, Subtitle 3 of the State Finance and Procurement Article are incorporated in this section.

(b) To the extent practicable and authorized by the United States Constitution, an applicant approved for a nuclear energy generation project under Sec. 7-1213 of this subtitle shall comply with the State's Minority Business Enterprise Program.

(c)

  (1) Within 6 months after the issuance of an order that approves a nuclear energy generation project and includes a long-term pricing component, the Governor's Office of Small, Minority, and Women Business Affairs, in consultation with the Office of the Attorney General and the approved applicant, shall establish a clear plan for setting reasonable and appropriate minority business enterprise participation goals and procedures for each phase of the nuclear energy generation project.

  (2) To the extent practicable, the goals and procedures set in accordance with paragraph (1) of this subsection shall be based on the requirements of Title 14, Subtitle 3 of the State Finance and Procurement Article and the regulations implementing that subtitle.

  (3) Every 6 months following the issuance of an order that approves a nuclear energy generation project and includes a long-term pricing component, the approved applicant shall submit a report on the progress made to establish and implement minority business enterprise goals and procedures to the Commission.

#### Section 7-1220

(a) In this section, "zero-emission credit" means a credit equal to the environmental attributes of 1 megawatt-hour of electricity that is derived from a nuclear energy generating station approved by the Commission under Sec. 7-1217 of this subtitle.

(b) The Commission shall adopt regulations that:

  (1) establish the nuclear energy long-term pricing purchase obligation sufficiently in advance to allow an electric company to reflect nuclear energy long-term pricing costs as a nonbypassable surcharge that is added to the electric company's base distribution rate on customer bills;

  (2) define rules that facilitate and ensure the secure and transparent transfer of revenues and long-term pricing payments among parties;

  (3) define the terms and procedures of the nuclear energy long-term pricing schedule obligations, including:

    (i) establishing a formula and process to adjust the value of the long-term pricing schedule every 2 years based on projected wholesale market prices adjusted by the locational value and earning potential in the PJM region of the nuclear energy generating station; and

    (ii) establishing a per megawatt hour cap on any long-term pricing schedule specified in an order issued under Sec. 7-1217 of this subtitle;

  (4) require the Commission to establish an escrow account; and

  (5) to meet the total statewide long-term pricing purchase obligation for all applications approved in an order issued under Sec. 7-1217 of this subtitle, require the Commission to annually establish each electric company's zero-emission credit purchase obligation based on the most recent final electricity sales data as reported by PJM Interconnection and measured at the customer's meter in proportion to the electric company's share of statewide load.

(c)

  (1) Each electric company shall procure from the escrow account established by regulation under this section a quantity of zero-emission credits equal to the electric company's respective percentage of retail electric sales each year.

  (2) Subject to any escrow account reserve requirement the Commission establishes, if there are insufficient zero-emission credits available to satisfy the electric companies' zero-emission credit purchase obligations, the overpayment shall be distributed to electric companies to be refunded or credited to each distribution customer based on the customer's consumption of electricity supply that is subject to the renewable energy portfolio standard.

(d) A debt, an obligation, or a liability of a nuclear energy generation project or of an owner or operator of a nuclear energy generation project may not be considered a debt, an obligation, or a liability of the State.

(e)

  (1) Subject to paragraph (2) of this subsection, and before the nuclear energy generation project begins commercial operation, the Commission may approve an increase of the total cost of a nuclear energy generation project under a long-term pricing purchase obligation.

  (2) The total cost of a nuclear energy generation project that may be recovered under a long-term pricing purchase obligation may not be increased by more than 15% of the original total project cost.

#### Section 7-1221

On or before July 1, 2027, the Commission shall adopt regulations to carry out this part.

#### Section 7-1224

(a) The Commission shall, by regulation or order, establish a competitive process for the procurement of projects for the construction and deployment of front-of-the-meter transmission energy storage devices in the State.

(b)

  (1)

    (i) On or before January 1, 2026, the Commission shall issue a procurement solicitation for applications for projects for the construction and deployment of front-of-the-meter transmission energy storage devices.

    (ii) Except as provided in subparagraph (iii) of this paragraph, the procurement solicitation shall be for 800 megawatts of cumulative energy storage capacity, as measured in effective nameplate capacity.

    (iii) The procurement solicitation may exceed 800 megawatts of cumulative energy storage capacity, as measured in effective nameplate capacity, if the Commission determines that the proposals are cost-effective and adequately support the goals established under this subtitle, including the goal of securing affordable, reliable electrical service for Maryland residents.

  (2) On or before October 1, 2026, the Commission shall issue a decision on whether to approve one or more proposals in accordance with Sec. 7-1226(c) of this subtitle.

  (3)

    (i) Except as provided in subparagraph (ii) of this paragraph, the transmission energy storage devices procured in accordance with this subsection shall be operational within 24 months after a project is selected by the Commission.

    (ii) The Commission may extend the operating deadline under subparagraph (i) of this paragraph for good cause shown.

(c)

  (1) On or before January 1, 2027, the Commission shall issue a second procurement solicitation for the procurement of projects for the construction and deployment of front-of-the-meter transmission energy storage devices.

  (2)

    (i) Except as provided in subparagraph (ii) of this paragraph, the procurement solicitation shall be for 800 megawatts of cumulative energy storage capacity, as measured in effective nameplate capacity.

    (ii) The procurement solicitation may exceed 800 megawatts of cumulative energy storage capacity, as measured in effective nameplate capacity, if the Commission determines that the proposals are cost-effective and adequately support the goals established under this subtitle, including the goal of securing affordable, reliable electrical service for Maryland residents.

  (3) On or before October 1, 2027, the Commission shall issue a decision on whether to approve one or more proposals in accordance with Sec. 7-1226(c) of this subtitle.

  (4)

    (i) Except as provided in subparagraph (ii) of this paragraph, the transmission energy storage devices procured in accordance with this subsection shall be operational within 24 months after a project is selected by the Commission.

    (ii) The Commission may extend the operating deadline under subparagraph (i) of this paragraph for good cause shown.

#### Section 7-1225

(a) The Commission shall include specifications in a procurement solicitation issued under Sec. 7-1224 of this subtitle that require each proposal to:

  (1) include a proposed pricing schedule for the transmission energy storage project that:

    (i) is for at least 15 years; and

    (ii) represents the anticipated monthly wholesale value of capacity per megawatt and other benefits identified in a cost-benefit analysis, but not including any anticipated wholesale energy and ancillary services revenue;

  (2) include a cost-benefit analysis of the project and proposed pricing schedule comparison on a dollar-per-megawatt-hour basis, including an analysis of:

    (i) the locational value and time to deployment of the energy storage devices;

    (ii) the value of long-duration storage, including its capacity accreditation value for resource adequacy as measured in PJM Interconnection's effective load carrying capability class ratings;

    (iii) avoided or delayed transmission, generation, and distribution costs;

    (iv) avoided emissions in the short term and projected avoided emissions in the long term, measured using the social cost of carbon, as determined by the U.S. Environmental Protection Agency as of January 1, 2025;

    (v) the value of the rapid deployment of energy storage devices;

    (vi) the value of reliability during periods of electric system stress, including the ability to deliver capacity during periods of extreme weather, fuel scarcity, and large unplanned resource outages; and

    (vii) any other avoided costs;

  (3) ensure that the owner or operator of the project has the capability to export electricity for sale on the wholesale market and bid into the PJM capacity market under an agreement with PJM Interconnection;

  (4) ensure that the energy storage devices can deliver their effective nameplate capacity;

  (5) incorporate a community benefit agreement;

  (6) attest in writing that all contractors and subcontractors working on the project have been in compliance with federal and State wage and hour laws for the immediately preceding 3 years or the duration of the contractor's or subcontractor's business operation, whichever is longer; and

  (7) ensure a competitive bidding process, including by redacting proprietary information provided to the Commission.

(b) An energy storage device shall be considered capable of delivering its effective nameplate capacity under this section if:

  (1) the energy storage device will have the capacity interconnection rights with PJM Interconnection equal to its effective nameplate capacity; or

  (2)

    (i) the energy storage device will have surplus interconnection service with PJM Interconnection; and

    (ii) the ability of the energy storage device to deliver its effective nameplate capacity will be limited only by the generation of another nonenergy storage generation resource with which the energy storage device shares a point of interconnection to the electric transmission system.

(c) Projects that include any of the following devices may be included in a proposal in response to a procurement solicitation under Sec. 7-1224 of this subtitle:

  (1) front-of-the-meter transmission energy storage devices paired with Tier 1 or Tier 2 renewable sources, as defined under Sec. 7-701 of this title; and

  (2) front-of-the-meter energy storage devices:

    (i) interconnected to a facility within the State; and

    (ii) that have been assigned a project identifier in the PJM Interconnection process in response to a request for new service.

#### Section 7-1226

(a) In selecting a proposal for a front-of-the-meter transmission energy storage device project, the Commission:

  (1) shall specify:

    (i) a 15-year pricing schedule that uses a monthly fixed price for each megawatt that represents the anticipated wholesale value of capacity for the front-of-the-meter transmission energy storage device and the benefits identified in Sec. 7-1225(a)(2) of this subtitle;

    (ii) that each electricity supplier shall be responsible for purchasing storage capacity credits at the monthly fixed price schedule proportional to the electricity supplier's capacity obligation;

    (iii) that all PJM capacity market revenue earned by the energy storage project be transmitted to the Commission to be held in escrow for distribution to electric companies to be refunded or credited to each distribution customer proportional to the electricity supplier's monthly capacity purchase obligation;

    (iv) that the energy storage project shall retain any energy and ancillary services revenue earned;

    (v) that electric companies must jointly select an escrow administrator, in consultation with the Commission; and

    (vi) for any cost recovery by an electric company, that the recovery shall be done through a nonbypassable surcharge established by the electric company that is added to the electric company's base distribution rate or supply rate on customer bills;

  (2) shall specify that for continued receipt of payment under item (1) of this subsection, an applicant shall demonstrate, to the satisfaction of the Commission, that the applicant's energy storage device is available;

  (3) shall incorporate penalties for nonperformance and underperformance in the contract, including withholding of payment that reflects the degree of underperformance, for energy storage devices that fail to meet availability metrics;

  (4) may terminate energy storage devices from the program if device performance does not improve after appropriate notice and opportunity to cure;

  (5) shall consider other nonprice factors to ensure project deliverability within 24 months after the award date, such as:

    (i) project maturity dates;

    (ii) interconnection queue status;

    (iii) site control;

    (iv) developer experience, including procuring, constructing, and operating front-of-the-meter transmission energy storage devices;

    (v) any evidence of key development milestones to substantiate project deliverability within 24 months after the award date;

    (vi) safety plans; and

    (vii) any other relevant nonprice factors as determined by the Commission; and

  (6) shall require, at a minimum, all energy storage devices that utilize lithium-ion batteries to comply with the most up-to-date revision of the National Fire Protection Association 855: Standard for the Installation of Stationary Energy Storage Systems in effect at the project's final permit application date.

(b)

  (1) Each energy storage project shall include a proposed decommissioning plan.

  (2) The proposed decommissioning plan shall include a plan to maximize the recycling or reuse of all qualifying components of each energy storage device.

  (3) The owner or operator of an energy storage device may submit a revised recycling and reuse plan that incorporates emerging recycling and reuse opportunities up to 1 year before executing the decommissioning plan.

(c) The Commission shall:

  (1) after giving public notice, hold one or more public hearings to receive public comment and evaluate the proposals; and

  (2) subject to subsection (d) of this section, issue one or more orders to select a proposal or proposals for development.

(d) The Commission may end the solicitation process without selecting a proposal if the Commission finds that none of the proposals adequately support the goals established under this subtitle, including the goal of securing affordable, reliable electrical service for Maryland residents.

#### Section 7-1227

(a) For any proposal selected under this part, the Commission may adopt conditions for the construction and operation of facilities included in the proposal.

(b) An order selecting a proposal under Sec. 7-1226 of this subtitle bestows the same rights to the selected proposal that a generating system would otherwise be granted through a certificate of public convenience and necessity under Sec. 7-207 of this title if the selected proposal is reviewed under an alternative process as determined by the Commission.

#### Section 7-1228

Any transmission energy storage device built in accordance with this subtitle shall count toward the energy storage device deployment goals under Sec. 7-216.1 of this title.

#### Section 7-1229

On or before December 31, 2026, the Commission shall report, in accordance with Sec. 2-1257 of the State Government Article, to the General Assembly on the effectiveness of the procurement process established under this part.

---

Md. Code Ann., Pub. Util. (as displayed at mgaleg.maryland.gov, October 16, 2026)