Maryland Goes Big on Offshore Wind and Electric Transmission

Last Friday in Baltimore, I watched as Maryland Governor Wes Moore signed the Promoting Offshore Wind Energy Resources (POWER) Act into law, a foundational step for the state as it works to build out its electric grid infrastructure, build up its offshore wind industry, and reach its ambitious renewable energy goals.

With the passage of the POWER Act, Maryland will serve as an example for state legislators across the country in showing the type of action that must be taken for states to make the transition to clean energy. Specifically, this law will greatly improve the planning processes needed to build transmission lines and get the electric grid ready for Maryland’s noteworthy 8.5 GW offshore wind power production goal, as well as for increased onshore clean energy production. Improving the grid will also boost the state’s grid efficiency and resiliency, lower utility bills for homes and businesses, and create good-paying union jobs that will connect Maryland to both wind and solar resources.

Delegate Lorig Charkoudian and Senator Katie Fry Hester deserve special praise for their work in championing this legislation in their respective chambers, and Gov. Moore can use this policy as a foundation from which to grow Maryland’s clean energy economy, built on advanced energy technologies. 

Passing the POWER Act was Advanced Energy United’s top priority this January – April legislative session in Annapolis. And as with many of United’s victories, our member companies played a critical role in providing first-hand expertise to lawmakers, helping them understand how our industry’s vital work can best be supported by clean energy policy. 

One prime example was the work of United member CPower and its parent company LS Power in successfully advocating for passage of the POWER Act. In early February, United reached out to CPower, LS Power, and other United Transmission Campaign Committee members to begin an advocacy campaign around this legislation. To help key legislators understand why the POWER Act was so important, United organized a dinner with members of the Senate Education, Energy, and Environment Committee. CPower and LS Power, along with Enel, CTC Global, Amazon, and New Leaf Energy, attended this event and shared their companies’ interests in strengthening and expanding transmission in Maryland through passage of the POWER Act. 

Due to lawmakers’ interest in lessons learned from other states’ efforts to strengthen and expand transmission systems, LS Power’s Sharon Segner was invited to testify before both the Senate and House committee hearings on the POWER Act. Segner reiterated her company’s support for the bill, and discussed LS Power’s experience with New Jersey’s offshore wind transmission process, and how Maryland could learn from their success: 

“New Jersey’s real-life experience is that using proactive holistic planning and competitive bidding to select the necessary system reinforcements for multiple offshore wind projects is 37% cheaper than the status quo that plans and builds new transmission for one generation at a time. Absent the competitive solicitation framework, New Jersey ratepayers would have ultimately paid almost $2 billion in offshore wind transmission costs. Quite simply, the competitive transmission solicitation process provided New Jersey with higher quality transmission at a substantially lower price,” Segner testified. 

As proof of the value of LS Power’s perspective, Del. Lorig Charkoudian, the POWER Act’s prime sponsor in the House of Delegates, highlighted the 37% cost savings figure from Segner’s testimony when she presented on the bill before the Public Utilities Subcommittee of the House Economic Matters Committee in late March. Following this, the subcommittee advanced the bill, and the legislation was passed in both chambers on April 10th. Last week’s bill signing ceremony with Gov. Moore served as the final step in a hard-fought battle—one that United and our member companies helped to win, by once again connecting the dots for lawmakers between clean energy ambitions and the on-the-ground clean energy policy needs of our industry.

This successful effort in Maryland is part of a larger campaign at Advanced Energy United to expand electric transmission buildout featuring a strategy built on policy advocacy, coalition building, and communication efforts that support federal, regional, and state actions. You can learn more about the campaign, and how your company can participate, by going to our Transmission Engagement Campaign page.

Dig Deeper: Critical Provisions of the POWER Act 

The POWER Act (SB 781/HB 793) is designed to help Maryland meet its ambitious goals for climate pollution reduction and renewable energy generation, as set forth by the Climate Solutions Now Act of 2022 (60% pollution reduction by 2031) and the Clean Energy Jobs Act of 2019 (50% renewable generation by 2030, including at least 1,200 MW of offshore wind). Sponsored by Del. Lorig Charkoudian and Sen. Katie Fry Hester, the POWER Act was signed by Gov. Moore on Friday, April 21. 

Specifically, the POWER Act does four key things:  

1. Sets an offshore wind goal of 8.5 GW by 2031: By setting this target, Maryland is sending a clear signal to the market and to both state and federal regulators that the state is friendly to offshore wind and aspires for investments in the industry. The target includes the current Public Service Commission (PSC) approved Offshore Wind Renewable Energy Credits (ORECs) of Round 1 and Round 2 and any other procurement efforts. 
2. Facilitates coordinated transmission infrastructure development: Recognizing that both the buildout of renewable energy resources and the security of our electric grid depend on strengthening and expanding our transmission system, the POWER Act first calls for the PSC and Maryland Energy Administration (MEA) to request that the PJM Interconnection conduct a study of necessary transmission system upgrades and expansion options. The PSC must then issue or request that PJM issue competitive bids for transmission, and may select proposals to build transmission by December 2027, assuming the net benefit cost of coordinated transmission is less expensive for ratepayers compared to a baseline of building transmission independent of coordinated development. 
3. Creates good jobs: To ensure the creation of good jobs, the POWER Act requires a Community Benefits Agreement from companies building the offshore wind turbines and transmission infrastructure. The bill also prioritizes economic activity and investments in small businesses, woman-owned businesses, and minority-owned businesses. Americans for a Clean Energy Grid estimates that in the Eastern U.S. alone, expanding and modernizing the transmission grid would unleash up to $7.8 trillion in investment and generate more than 6 million net new jobs, primarily in rural areas. 
4. Procures offshore wind from existing lease areas: The POWER Act requires Maryland to use state and federal funding mechanisms to directly procure offshore wind energy by July 2024 for up to 5 million megawatt-hours (MWh) annually from existing lease holders. Both Orsted and US Wind have existing space in their lease areas for additional wind power development, but the law did not allow for additional development that may impact ratepayers. The POWER Act fixed this, and allows for construction of additional projects without the cost or risk accruing to ratepayers, so that Maryland benefits from up to 1,600 MW of additional offshore wind energy.