In 2025, the General Assembly of Maryland made its boldest move ever to advance energy storage, as part of a legislative package responding to the resource adequacy challenges that are now emerging for the Free State. Late last year, those challenges were described as “dire” by PJM, the regional transmission organization that manages the electric power system across the 12-state mid-Atlantic region, including Maryland. The overall legislative package included comprehensive measures for the expedited competitive procurement of a diversity of energy generation projects in Maryland from fossil, nuclear and certain renewable energy sources,[1] with attendant measures to facilitate siting of these projects.[2] To enhance resource adequacy in Maryland, a competitive procurement program and other mandates are also established under the legislation for certain energy storage projects to be located in the State. Practically all of the energy procurement provisions in the package closely resemble the competitive procurement program already enacted by the General Assembly and implemented by state regulators for offshore wind power. The package also sets requirements for commercial and industrial customers in specified co-location arrangements with a generating facility. All provisions in the package become effective on June 1 or July 1 of 2025.
Although the General Assembly had established a pilot program for energy storage back in 2019,[3] with targets established in 2023 for the cost-effective deployment of new energy storage devices by 2033,[4] this year the Legislature stomped on the accelerator with a robust program for the procurement of energy storage devices for front-of-the-meter transmission energy storage and distribution-connected front-of-the-meter energy storage. All totaled, the State’s ambitious goal is to develop up to 1,750 MW of overall energy storage capacity by October of 2029, all as explained below.
Background
Considerable progress has been made by electric companies and state regulators under the State’s Energy Storage Pilot Program, as facilitated by a Maryland Energy Storage Program Workgroup established by the Public Service Commission of Maryland (the “Commission”) on October 2, 2023. As of July 1, 2024, a total of 8 energy storage pilot projects have been constructed and operated by Maryland’s investor-owned electric companies and/or their third-party partners with a projected installed capacity of approximately 8.48 MW. The pilot Work Group has reported on progress and lessons learned on such issues as project costs, value and revenue streams, and challenges.
The 2023 enactment by the General Assembly setting targets for the deployment of new energy storage projects in the State[5] was ambitious but lacked specificity as to who would own, build or operate these projects, how they would be proposed or approved, and what criteria would be applied to address resource adequacy in the State and ensure consistency with the public interest. A further work group was assembled, the Maryland Energy Storage Workgroup, renamed the Maryland Energy Storage Initiative Workgroup in early 2025, to comment on various energy storage issues (such as energy storage deployment incentives and tariffs) and assist with (and petition for) the development of regulations that will implement many of the provisions of the 2023 and 2025 legislation. Senate Bill 937 and House Bill 1035, enacted by the General Assembly in 2025, provides specificity by establishing a competitive procurement process for the solicitation of up to 1,600 MW of front-of-the-meter transmission energy storage projects from developers who will be judged on an array of price and non-price factors. An additional component of the legislation provides a direct mandate on investor-owned electric companies in Maryland to construct or procure at least another 150 MW of distribution-connected front-of-the-meter energy storage.
Transmission Energy Storage Projects
Under the 2025 legislation, the Commission is charged with establishing a fast-moving competitive program, by order or regulation, for the procurement of construction and deployment of front-of-the-meter transmission energy storage projects in Maryland. This procurement program consists of two rounds of application and approval timelines, to be administered by the Commission, for up to 800 MW of energy storage capacity in each round. In the first round, the Commission is to issue a procurement solicitation by January 1, 2026, with a decision on all applications to be rendered by a second deadline of October 1, 2026. The two deadlines for the second round are exactly one year later than their corresponding first round deadlines. Unless extended by the Commission for good cause shown, each project must be operational within 24 months after selection by the Commission.
For the competitive procurement of these transmission energy storage projects, the legislation creates a program with a fulsome set of procurement specifications and selection criteria. Building upon the framework of the offshore wind power model, the 2025 legislation prescribes that the Commission’s solicitation require the following specs:
1) at least a 15-year pricing schedule representing anticipated monthly wholesale value of capacity per MW and other benefits as further specified in the statute;
2) an extensive cost-benefit analysis of the project, including an analysis of an array of factors such as storage value, avoided costs, avoided emissions, rapid deployment value, and reliability value;
3) capability to export power for sale on the wholesale market and bid into the PJM capacity market;
4) assurance that each storage device can deliver its effective nameplate capacity;
5) a community benefit agreement;
6) contractor and subcontractor compliance with federal and state wage and hour laws; and
7) allowance for redactions of information deemed proprietary by bidders.
As to selection criteria, the Commission is charged with making its determinations of which projects to approve by considering an array of project factors relating to price, storage capacity credits, and the ability to achieve availability metrics. Significant conditions relating to pricing are that all PJM capacity market revenue earned by the energy storage project shall be transmitted to the Commission to be refunded to distribution customers pursuant to a prescribed formula, while any energy and ancillary service revenue earned by the project may be retained by the project. Nonprice factors that the Commission shall consider include project maturity dates, interconnection queue status, site control, developer experience, evidence of development milestones already achieved, safety plans, and any other relevant non-price factor as determined by the Commission. The overall review and approval process, conducted by the Commission with the assistance of other selected state agencies, is to be defined and detailed in the implementing regulations to be adopted by the Commission in September or October of 2025.
Additional significant elements of bids into this program include a decommissioning plan to be submitted by each bidder and one or more public hearings held by the Commission to receive public comment and evaluate the bids. The Commission may also adopt conditions for the construction and operation of any energy storage project approved under this program.
A very important feature of this program is that a Commission Order selecting a bid submitted under this program confers the same rights upon the project that it would have if it were granted a Certificate of Public Convenience and Necessity (“CPCN”) by the Commission, but no CPCN approval process is required for a program project if a selected bid is reviewed under an alternative review process as determined by the Commission. Other transmission energy storage projects that are not submitted into this program, but that qualify as “large capacity energy resources” because on or before January 1, 2025 they applied to PJM for interconnection approval or have been approved by PJM for interconnection, and have a capacity rating equal to or greater than 20 MW, are subject to the Commission’s extensive CPCN approval process. This would also be the case for energy storage devices that qualify under the statutory definition of “dispatchable energy generation” (this definition is based on the effective load carrying capacity and greenhouse gas emissions profile of the proposed project). Under the 2025 legislation, during 2025 through 2030 “large capacity energy resources” and “dispatchable energy generation” are eligible for an expedited CPCN process that accelerates the decisional deadline by at least 70 days.
Distribution-Connected Energy Storage Projects
The 2025 legislation also establishes a separate, overall goal of 150 MW for the development of distribution-connected front-of-the-meter energy storage projects by all the investor-owned electric companies in the State. Two rounds of applications, reviews, approvals, and construction timelines are established. In the first round, by November 1, 2025, the Commission will require each electric company to submit a plan to produce up to one-third of its proportionate share of the overall 150 MW goal. No later than May 1, 2026, the Commission must complete an evaluation, receive public comments, and issue an approval, rejection or modification on each plan. Each energy storage project, which may be constructed or procured by the electric company, must be operational by November 1, 2027. The application, decision and operational deadlines for the second round, for the remaining balance of each electric company’s proportionate share of the overall goal, are all one year later than the corresponding deadlines in round one. Prevailing wage and other wage and benefit laws apply to all work associated with the construction, operation and maintenance of the projects, and plans must demonstrate such characteristics as cost effectiveness, cost avoidance, emissions avoidance, and likelihood of timely completion.
Siting of All Front-of-the-Meter Energy Storage Projects
The General Assembly included in its 2025 legislative package siting provisions establishing construction requirements and limitations on local government for the construction of all front-of-the-meter energy storage projects (including transmission and distribution-connected energy storage). The construction requirements specify the parties to be notified of a proposed project and the number of public hearings to be held depending on the location of the proposed project. Special construction parameters are established for certain of these projects including fencing, screening, buffers, grading, topsoil removal, and use of herbicides. All of these siting provisions governing energy storage, enacted in Senate Bill 931/House Bill 1036, are subject to future regulations that the Commission is required to adopt. The new law prescribes at least one purpose of these regulations, which is that construction of such a project may not proceed unless approved by the Commission in accordance with these regulations.
As to limits on local government, these jurisdictions (counties, municipalities, and other forms of local government in Maryland) are limited in their role in siting of all front-of-the-meter energy storage projects that meet the construction requirements and parameters listed above, as they are prohibited from adopting zoning or other laws or regulations that prohibit the construction or operation of these projects. Local governments are also prevented from denying site development plans for projects that meet the aforementioned construction requirements and parameters. In addition, local governments are charged with affirmative duties in connection with these projects, including: (1) expediting review and approval of certain site development plans, and (2) adopting standard processes for the review and approval of site development plans for construction of these projects.
Finally, additional guidance and requirements governing front-of-the-meter energy storage project siting are likely to emerge in the aforementioned regulations that the Commission is adopting to implement the energy storage program in Maryland. As noted, best estimates indicate that these implementing regulations should be finalized in Rulemaking 85 (RM 85) and in effect by about September or October of 2025.
[1] SB 937 and HB 1035, 2025 Laws of Maryland.
[2] SB 931 and HB 1036, 2025 Laws of Maryland.
[3] Annotated Code of Maryland, Public Utilities Article (“PUA”) §7-216.
[4] Annotated Code of Maryland, PUA §7-216.1.
[5] The 2023 goals were to achieve cost-effective deployment of new energy storage devices that would achieve cumulative energy storage capacity of 750 MW by 2027, 1,500 MW by 2030, and 3,000 MW by 2033. PUA §7-216.1.
