Maryland Policy Updates

July 2025 Updates

PSC Eliminates Gas Line Extension Subsidies in Historic Climate Decision
The Maryland Public Service Commission issued Order No. 91683 on June 13, 2025, approving reforms to eliminate subsidies for new gas service and mainline extensions. This landmark decision, responding to the Office of People’s Counsel’s February 2023 petition, requires new customers to pay the full cost of service extensions to prevent future stranded costs as Maryland moves toward clean energy. The Commission directed Staff to draft implementing regulations by December 1, 2025. This reform marks a significant shift in utility policy, aligning gas infrastructure investments with Maryland’s climate goals and shielding existing ratepayers from bearing the costs of expanding gas systems that could become obsolete.

“Cash In On Clean Energy” Convening Prepares Contractors for Clean Heat Transition
The Building Decarbonization Coalition and Green & Healthy Homes Initiative successfully hosted the “Cash In On Clean Energy” contractor training event on June 24 at Prince George’s Community College Performing Arts Center. The gathering brought together HVAC contractors with representatives from the Maryland Department of the Environment, the Maryland Energy Administration, the Maryland Department of Housing and Community Development, and the Maryland Clean Energy Center. Heat pump manufacturers—including Mitsubishi, Fujitsu, and LG—provided hands-on training and technical expertise. The event focused on preparing contractors for the business opportunities created by Maryland’s shift to zero-emission heating equipment and available incentive programs.

Clean Heat Standard Reporting Rule Advances with Unanimous AQCAC Support
The Air Quality Control Advisory Council unanimously voted on June 16 to advance the Clean Heat Standard (CHS) reporting rule, marking the first formal step in Maryland’s comprehensive approach to tracking and reducing emissions from building heating. The draft reporting rule, expected to be issued in September 2025, will require heating fuel providers to report detailed data on gas deliveries by source, establishing crucial benchmarks for Maryland’s clean heat transition. Public comment opportunities will follow the release of the draft rule, with finalization of the rule expected by the end of the year. This reporting framework will inform future regulatory programs and support Maryland’s commitment to achieving net-zero emissions by 2045.

June 2025 Updates

Clean Heat Regulation Planning Advances While ZEHES Timeline Extended

The Maryland Department of the Environment (MDE) held a feedback session on the Heating Fuel Provider Reporting Program on May 15, gathering stakeholder input for future regulatory programs. In addition, the Air Quality Control Advisory Council meeting scheduled for June 16 will present draft regulations for heating fuel providers, though neither the Clean Heat Standard (CHS) nor Zero-Emission Heating Equipment Standards (ZEHES) are on the agenda for this meeting. MDE also now indicates ZEHES rules will come next year in order to allow more time for comprehensive stakeholder engagement.

Contractor Training and Webinar Series Expands Heat Pump Education

BDC partnered with LG Electronics and MDE to host “The Heat Pump Edge: Winning Customers in Maryland’s Zero-Emission Market” webinar on June 3rd, featuring experts from LG discussing heat pump technology and how the state’s ZEHES rules will create new business opportunities for HVAC contractors. Building on this momentum, Maryland’s Green and Healthy Homes Initiative is organizing in-person contractor convenings with multiple manufacturers to provide contractors with hands-on training and education about heat pump installations and the transition to zero-emission heating equipment.

Maryland Clean Heat Coalition Grows to Address Implementation Challenges

The Maryland Clean Heat Coalition has expanded over the past year, adding 11 new member organizations, demonstrating growing stakeholder engagement in the state’s clean heat transition. The coalition is currently forming subcommittees to address specific implementation challenges, including correcting misperceptions about heat pumps and finding ways to help Low and moderate-income families decarbonize their homes.

May 2025 Updates

Maryland Department of the Environment Revises Timeline for Zero-Emission Heating Equipment Standard (ZEHES), Maintains Timeline for Clean Heat Standard

The Maryland Department of the Environment (MDE) has announced a revised timeline for one of its clean heat regulations, postponing the implementation of the Zero-Emission Heating Equipment Standard (ZEHES) regulations until 2026. However, the MDE will move forward with its current timeline for its Clean Heat Standard reporting rule.

According to a recent meeting between MDE officials and the Maryland Clean Heat Coalition, the department is “looking closely” at California’s South Coast rule on electrification of water heaters and boilers for guidance on how to implement its Clean Heat Standard. MDE plans to present its reporting approach for the Clean Heat Standard at the June meeting of the state’s Air Quality Control Advisory Council.

Clean Heat Reporting Rule Stakeholder Session Scheduled by MDE
MDE will hold a virtual stakeholder session on Thursday, May 15th, from 9:00 to 10:00 a.m. ET to provide an overview of the Maryland Heating Fuel Provider Reporting Program. This initiative will collect data to improve the state’s greenhouse gas emissions inventory and inform future regulatory programs, including the Clean Heat Standard required by Executive Order 01.01.2024.19. Stakeholders are encouraged to register even if they are unable to attend, in order to receive materials and the feedback form after the session.

EmPOWER Program Increases Heat Pump Incentives
Maryland’s flagship energy efficiency program, EmPOWER Maryland, has significantly increased heat pump rebates to as much as $15,000 per unit as part of its expanded focus on helping the state achieve greenhouse gas reduction goals. Despite these enhanced incentives, MDE officials note that contractor quotes for heat pump installations remain high, indicating the continued need for workforce development and market transformation efforts to make building electrification more affordable.

April 2025 Updates

Maryland PSC Rules Washington Gas Light Misled Customers

The Maryland Public Service Commission ruled that Washington Gas Light (WGL) violated regulations by misleading environmental claims in customer bills from 2017 to 2022, including unverified statements that natural gas was “clean energy” and “one-third less expensive than electric.” WGL could not explain how these claims were developed or verify their accuracy, and the PSC determined that these statements were “not adequate, just, and reasonable.”

The ruling establishes an essential precedent for utility marketing regarding environmental claims in the region, with potential civil penalties yet to be determined. This decision follows a 2021 complaint filed by the Maryland Office of People’s Counsel, which was later joined by the Sierra Club Maryland Chapter and represented by Earthjustice.

Montgomery County Establishes Building Energy Performance Standards

The Montgomery County Council approved regulations for building energy performance standards for commercial and multifamily structures of 25,000 square feet or larger, establishing targets for energy use intensity and guidelines for incorporating renewable energy. These standards aim to reduce the county’s carbon emissions, 52% of which originate from buildings, supporting Montgomery County’s objective to eliminate greenhouse gas emissions by 2035.

The county received $68 million from the EPA’s Greenhouse Gas Reduction Fund to assist building owners in meeting these standards through the Montgomery County Green Bank. Buildings have 10 years to comply, with approximately one-third already meeting the standards, one-third close to compliance, and one-third requiring significant investment.

The Maryland Department of Energy Launches Alternative Fuels Working Group

The Maryland Department of Energy (MDE) launched its Alternative Fuels and Technologies Working Group on March 20, with the first session exploring the role of various technologies in the state’s building decarbonization strategies. The working group will evaluate biofuels, carbon capture, fuel cells, hydrogen, and other technologies as potential components of Maryland’s decarbonization policies.

This initiative is part of MDE’s broader effort to develop comprehensive approaches to reducing emissions from buildings while maintaining energy reliability and affordability. Future sessions will continue throughout spring 2025, with stakeholder input helping to shape final policy recommendations. A recording of the Working Group’s first session can be viewed here.

Montgomery County’s Building Energy Performance Standards Face Legal Challenge

Apartment building owners, trade groups, and Washington Gas have filed a lawsuit challenging Montgomery County’s Building Energy Performance Standards (BEPS), alleging that the federal Energy Policy and Conservation Act preempts the 2022 law. This marks the second lawsuit targeting the county’s environmental laws, following a previous challenge to its Decarbonization Law in October.

The plaintiffs argue that BEPS regulations on energy use intensity for large commercial and multifamily buildings would effectively restrict the use of natural gas appliances. Environmental advocates claim that gas appliances harm public health, citing poor air quality and high asthma rates among children in households with gas stoves. These legal challenges mirror similar cases in other states following a Ninth Circuit decision that blocked Berkeley, California’s gas ban.

 

March 2025 Updates

Clean Heat Rules Advance with Executive Order Support

The Maryland Department of the Environment continues developing Zero-Emission Heating Equipment Standards (ZEHES) and Clean Heat Standards to reduce emissions from buildings, with implementation supported by recent executive actions to accelerate climate goals. These standards build on Maryland’s ambitious climate targets established in the Climate Solutions Now Act, which requires a 60% reduction in emissions by 2031 and net-zero emissions by 2045. The department plans to hold additional stakeholder sessions throughout this spring to finalize implementation details. The standards would establish emissions targets for building heating equipment while ensuring energy affordability for all Marylanders. Learn more about these standards in the Maryland Department of the Environment Climate Pollution Reduction Plan.

Consumer Protection Law SB1 Shows Success in Energy Market

Maryland’s SB1 legislation has saved consumers significant money while preserving clean energy options, correcting a decade of predatory pricing practices where suppliers charged exorbitant rates to most customers while offering discounts to a few. Data shows Maryland families paid $1.5 billion more than regulated energy rates from 2014 to 2023 before SB1 was enacted. The law now requires suppliers to meet or beat regulated rates, disclose Renewable Energy Certificate (REC) types supporting green energy claims, obtain Public Service Commission (PSC) approval for green energy offers, eliminate purchase of receivables regulation, and provide regulators with enhanced reporting and enforcement tools. More details on SB1’s impact can be found at Legislation Details – SB1 (2024) and at the Energy Supplier Help Desk. 

Gas Rate Reform Bill Advances to Senate Hearing

The Strategic Infrastructure Development and Enhancement Plan (STRIDE) reform bill—HB419, the Strategic Infrastructure Development and Enhancement (Ratepayer Protection Act)—which is designed to address Maryland’s soaring gas utility bills, is scheduled for a Senate hearing on March 13th. Testimony has revealed that gas delivery rates have tripled since 2010, despite increased hazardous leaks and $1.4 billion spent on pipeline replacements. The Ratepayer Protection Act aims to prioritize safety, control spending, and reduce unnecessary infrastructure expansion by requiring utilities to ensure their gas infrastructure spending is cost-effective, consider non-pipeline alternatives, create new consumer protection measures around infrastructure spending, establish two-year notice requirements before infrastructure work begins, and introduce stricter oversight of utility cost recovery mechanisms. Read about the Ratepayer Protection Act and its implications at Maryland General Assembly – HB419 Bill Details

Climate Commission Recommends Enhanced Spending Accountability

The Maryland Commission on Climate Change is advocating for improved tracking of climate-related expenditures through climate budget tagging (CBT), standardized climate cost codes, enhanced damage tracking and resiliency planning, and better documentation of disaster recovery spending. These recommendations aim to create greater transparency in how climate funds are allocated and spent, enabling more effective decision-making and resource allocation across state agencies. The commission has emphasized that better tracking will help ensure climate investments reach the communities most vulnerable to climate impacts, including low-income neighborhoods and environmental justice communities. For more details, visit Maryland Mitigation Working Group 

BGE Rate Hearing Highlights Gas Infrastructure Concerns

Baltimore City Council held a hearing in February that revealed troubling trends in gas infrastructure investment. Testimony showed that gas delivery rates have tripled since 2010, while BGE’s hazardous gas leaks increased from 3,000 in 2014 to over 4,000 in 2023, despite $1.4 billion spent on pipeline replacements. The hearing highlighted that the STRIDE law lacks critical safety and spending safeguards, and the multi-year rate-making pilot has led to higher rates without adequate cost discipline. Environmental and consumer advocates testified that continued investment in gas infrastructure represents a significant financial risk to ratepayers as Maryland transitions toward building electrification. For more information, visit the Baltimore City Council’s Website or view the City Council Hearing: Committee on Legislative Investigations

Building Electrification Programs Expanding Through EmPOWER Maryland

Maryland’s flagship energy efficiency program, EmPOWER Maryland, has introduced significant new incentives for heat pumps and building electrification measures, reflecting its expanded focus on helping the state achieve greenhouse gas reduction goals. The 2025 program includes enhanced rebates for income-qualified households, new technical assistance for multifamily building owners, and expanded contractor training programs to build workforce capacity. The program aims to accelerate the transition from fossil fuel heating systems to efficient electric alternatives while ensuring energy affordability and comfort for all Marylanders. Learn about the updated incentives at EmPOWER Maryland Program

February 2025 Updates

Ratepayer Protection Act Advances

New legislation aims to reform the Strategic Infrastructure Development and Enhancement Plan (STRIDE program) that has led to soaring gas utility bills, with gas customers seeing delivery rates triple since 2010. The bill would:

• Require utilities to ensure their gas infrastructure spending is cost-effective
• Mandate consideration of non-pipeline alternatives to gas infrastructure projects
• Create new consumer protection measures around infrastructure spending
• Establish two-year notice requirements for customers before infrastructure work begins
• Introduce stricter oversight of utility cost recovery mechanisms

Legislature Tackles Grid Reliability Crisis

Maryland lawmakers are responding to PJM’s agreement to keep 2 GW of coal and oil generation online through 2029 at Brandon Shores and H.A. Wagner plants with multiple bills addressing transmission upgrades and accelerated clean energy deployment, including:

The New Generation Energy Act (Ferguson/Jones) which aims to:

• Lower Maryland’s reliance on out-of-state energy (currently 40%)
• Reduce the need for additional transmission lines
• Allow state control over energy source selection
• Require the Public Service Commission (PSC) to fast-track RFPs for new energy generation to replace coal/oil capacity

The Renewable Energy Certainty Act (Feldman/Wilson) which would:

• Set statewide standards for solar and battery storage projects
• Remove local roadblocks to project construction
• Create streamlined permitting processes
• Establish study requirements for utility partnerships in clean energy projects

The Resource Adequacy and Planning Act creates:

• An independent office within PSC to improve state-level planning and reduce reliance on PJM for forecasting
• Requirements for better state-level planning on 2-10 year energy needs
• Coordination mechanisms between state agencies on energy planning

Clean Energy Goals Face Grid Hurdles

Maryland’s ambitious Climate Solutions Now Act targets of 60% emissions reduction by 2031 and net-zero by 2045 are being challenged by interconnection delays and transmission constraints. This has prompted the Maryland legislature to prioritize grid modernization, with the Resource Adequacy and Planning Act creating an independent office within PSC to improve state-level planning.

Clean Heat Standard Development

Maryland’s Department of the Environment is continuing stakeholder engagement on Clean Heat Standard regulations, with draft rules expected in early 2025. The standards aim to accelerate the transition to zero-emission heating equipment while ensuring energy affordability.