Published: April 18, 2025
By Danielle Powers and Lisa Quilici
Key Takeaways
Both Maryland and Ohio have recently advanced energy legislation aimed at regaining control of their energy resource mix, accelerating the development of new in-State generation, meeting the growing demand for electricity, and controlling rising rates. Maryland’s General Assembly passed a package of energy-related bills, with the cornerstone being the Next Generation Energy Act, HB 1035/SB 937, which is now with the Governor. In Ohio, both the House and Senate have passed bills (HB 15 and SB 2); a single bill must be agreed upon before it can be presented to the Governor.
The recent settlement agreement involving PJM, Talen Energy, the Maryland Public Service Commission, electric utilities, and others, which would keep certain coal-fired plants operating, provides a backdrop to these legislative initiatives. If FERC approves the settlement, Talen Energy will operate the Brandon Shores and H.A. Wagner coal plants until May 31, 2029, four years longer than their scheduled retirement dates, under reliability-must-run agreements to allow for necessary transmission upgrades for grid reliability to be put in service.
The laws proposed in Maryland and Ohio demonstrate a growing concern about the ability of existing competitive market structures to adapt to evolving reliability, demand, and affordability needs. Rising and volatile market prices, wholesale market design challenges, and projections of significant load growth have prompted both states to pursue additional tools to ensure long-term service adequacy while minimizing customer costs.
If enacted, the new laws in Maryland and Ohio would mark a shift away from reliance on competitive wholesale markets.
Maryland
The Next Generation Energy Act, HB1035/SB937, aims to encourage the development of new generation resources, modernize the state’s energy infrastructure, and control rising electric prices, among other objectives. Key provisions of the Next Generation Energy Act would:
- Promote the deployment of dispatchable energy generation, which as defined, would primarily include new natural gas generation provided it can be converted to use only hydrogen or zero-emission biofuel when the Public Service Commission determines such a conversion is feasible.
- Promote the deployment of new battery storage.
- Encourage the development of new nuclear power and support the extension or renewal of the Calvert Cliffs Nuclear Plant’s license.
- Eliminate subsidies for trash incineration, and the eligibility of waste-to-energy and refuse-derived fuel to satisfy the State Renewable Energy Portfolio Standard (RPS).
- Make the process and requirements for approval of gas infrastructure replacement projects more rigorous, including requirements to demonstrate public benefits.
- Establish a separate rate class for large load customers and make clear “that residential electric customers in the State should not bear the financial risks associated with large load customers”.
- Introduce various rate-related provisions intended to increase oversight of utility spending, such as requiring investor-owned utilities to demonstrate the reasonableness of the use of internal labor as compared to contracted labor in rate cases, and eliminate the ability of utilities with multi-year rate plans filed after January 1, 2025 from filing for reconciliation of cost or revenue variances.
- Provide refunds of approximately $80 per household funded by payments made by utilities in lieu of complying with the state’s RPS.
Other bills in the package are HB1036/SB931, which would create uniform standards for solar energy projects, and HB1037/SB909, which would establish a state office focused on energy planning. If signed by the Governor, the Next Generation Energy Act will take effect June 1, 2025.
Ohio
Ohio currently has two significant energy reform bills under consideration: SB2 and HB15. Both aim to modernize the state’s energy policies, enhance consumer protections, and encourage new energy generation to meet increasing demand. Key provisions of SB2 and HB15 would:
- Eliminate Electric Security Plans (ESPs) and require utilities to file full rate cases by December 31, 2029, and at least every three years thereafter.
- Introduce customer refunds if the Public Utilities Commission of Ohio or the Ohio Supreme Court determines that charges were unreasonable, unlawful, or imprudent.
- Expand the definition of “self-generator” to include entities that own or host electric generation facilities on property they control, not just on their premises. It also introduces “mercantile self-power systems” that can serve one or more mercantile customers, provided they meet specific criteria.1
- Create Priority Investment Areas (PIAs), allowing local governments to petition for the designation of brownfields or former coal mine sites as PIAs. Projects in these areas benefit from a five-year exemption from tangible personal property tax and expedited review processes by the Ohio Power Siting Board.
- Reform to tangible personal property tax rates to incentivize new energy investments. For example, new generation facilities placed into service after the bill’s effective date are subject to a reduced tax rate, encouraging modernization and development.
- Streamline regulatory timelines for decisions on certificate applications and rate case applications.
- Prohibit electric distribution utilities from owning generation facilities or participating in the wholesale market, and restrict utility ownership of behind-the-meter generation systems, with certain grandfathering provisions for existing projects.
SB2 has been referred to the House Energy Committee. Both the House and Senate are working towards reconciling differences between SB2 and House Bill15, with the goal of presenting a single energy reform package to the Governor.
Other States
Maryland and Ohio are not alone in their energy reform initiatives. In December 2024, the Governor of Pennsylvania filed a complaint against PJM’s capacity auction design and anticipated price increases with FERC. In January, this case settled with PJM agreeing to lower its auction price cap by 35%. In 2021, Illinois enacted the Climate and Equitable Jobs Act (CEJA), directing utilities to procure capacity outside of PJM’s capacity market to regain control over resource procurement to align with affordability and decarbonization goals. Other states have or are currently studying exiting competitive markets.
Collectively, these examples underscore the growing tension between competitive market structures and state priorities, signaling that more states may explore ways to assert greater control over their energy futures.
Concentric Energy Advisors helps utilities, independent power producers, and government entities in responding to changes in public policy, resource planning, and wholesale electric market design and operational issues. Contact Danielle Powers, Chief Executive Officer, 508.263.6219.
1 Under SB2, a mercantile self-power system is a generation or storage facility that provides electricity directly to one or more large commercial or industrial customers without using the utility’s distribution system. These systems must be located on property owned or controlled by the customer or system operator. SB2 exempts them from regulation as utilities, enabling large users to self-supply power more easily.
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All views expressed by the authors are solely the authors’ current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The authors’ views are based upon information the authors consider reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.
