Build Clean Energy Resources in Maryland with the Abundant, Affordable Clean Energy Act
Sponsored by Delegate Lorig Charkoudian, Senator Ben Brooks
Learn More About this Bill:
Listen to “Maryland Energy Talk” Podcast as Jamie DeMarco and Bill Sponsor, Lorig Charkoudian, Discuss The AACE Act
Here's The problem:
On the way to 100% Clean Energy, there are essential legislative changes required to ensure this transition provides maximum benefit to Marylanders.
Maryland is in a very precarious energy situation. Our grid is managed by an organization called PJM. PJM’s policies, which are driven in a large part by fossil fuel interests, have been a hindrance to Maryland’s clean energy goals. This has delayed our ability to reach our climate goals and will increase utility bills, especially in the Baltimore Gas and Electric Region. Further, our current structure for incentivizing the clean energy transition is broken. Very few new clean energy projects are being constructed in the state other than distributed (rooftop) solar projects. The current structure uses Renewable Energy Credits and seeks to protect rate-payers by setting a cap (in the form of Alternative Compliance Payments) on what REC price would be paid. However, because of the high prices in REC markets, utilities have ended up paying Alternative Compliance Payments instead of buying RECs. The result is that rate-payer funds have not effectively been invested in the development of new clean energy.
The AACE legislation accomplishes the following goals:
Note: There are many pieces of this legislation that are still being finalized.
1) Maximizes the amount of clean energy generation built within the boundaries of our state to add resources to the grid quickly
Even in the face of rising utility bills due to our grid operator’s mismanagement, clean energy projects are the quickest to construct to bring new energy sources onto the grid. In-state clean generation is the only way to prevent escalating utility bills for Marylanders. Increasing in-state generation also minimizes the number of transmission lines necessary to upgrade our grid and meet our increasing electricity needs.
2) Shifts the financial benefit of clean energy from developers to ratepayers
The price of energy is an equity issue. The major innovation of this legislation is the built-in ratepayer hedge. As Maryland expands its clean energy resources, we can codify a better system where clean energy successes benefit everyday Marylanders. This bill ensures that as energy prices stabilize because of clean energy deployment, utility bills become lower. And, as energy markets become more competitive, ratepayers will not continue to provide subsidies to industries that don’t need them.
Other Features of the Abundant, Affordable Clean Energy Act:
Profit sharing with Ratepayers
For all of the procurement based and variable REC scenarios, when the energy and capacity revenue exceed a fixed price from the procurement, additional revenue is passed back to ratepayers.
Data Centers
75% of revenues from energy sales and franchise taxes from data centers will be placed in an account to offset ratepayer costs associated with the procurements outlined in the bill.
Maintaining Carbon-Free In-State Generation
Currently, the Calvert Cliffs Nuclear Power Plant provides 40% of Maryland’s in-state energy generation and 80% of the state’s carbon-free energy generation. The IRA provides a production tax credit (PTC) for nuclear power plants. This bill creates a means-tested zero emissions credit for the plant that would be available if the PTC is no longer available and cease to be available if the PTC becomes available again.
Tell Your Legislators: Pass The AACE Act!
Resources
- Download the Fact Sheet
- Sign up to be a Lobby Captain in MD
- Attend MD 2025 Lobby Night For The Climate
- Explore our MD 2025 Legislative Priorities
For more information, please contact:
Brittany Baker, Maryland Director, CCAN) Action Fund
brittany@chesapeakeclimate.org
