On July 16 the Maryland Public Service Commission issued an order that will vault the state into a national leadership position on energy efficiency. Responding to advocacy by the Sierra Club and a coalition of energy efficiency advocates represented by Earthjustice (Coalition), as well as the Maryland Energy Administration, and the Maryland Office of People’s Counsel, the Commission's order requires the state's utilities to achieve annual energy savings through their energy efficiency programs ramping up to 2 percent incremental savings per year—putting Maryland on par with nation-leading states like Massachusetts, California, and Vermont. Moreover, the order adopts a robust cost-effectiveness methodology advocated by the Coalition that will ensure many of the more indirect benefits of energy efficiency, such as increased comfort and avoided air pollution emissions, are accounted for in the testing.
The Commission's order also provides important clarity on the future of energy efficiency in Maryland. Established by statute in 2007, Maryland’s energy efficiency framework—EmPOWER Maryland—included energy savings targets through 2015. However, beyond 2015, Maryland's utilities lacked legislated goals. The Commission's order firmly establishes not only that utilities' energy efficiency offerings will continue beyond 2015, but also that they will expand and grow to achieve a fuller set of the available cost-effective savings.
The Coalition's and the Sierra Club’s advocacy was instrumental in bringing about these beneficial developments. Throughout the proceeding the Sierra Club has maintained a strong focus on remedying shortcomings with the cost-effectiveness testing methodology utilized by the Public Service Commission, including incorporating the full suite of non-energy benefits that energy efficiency programs provide. Because of the importance of adequately valuing energy savings that occur in the future, the Club has consistently advocated for a use of a lower rate for discounting future benefits, consistent with the best-performing states. The Commission in its order agreed, adopting a much lower discount rate that will appropriately value future energy savings and ensure greater energy efficiency benefits for Marylanders.
The Sierra Club's coalition partners in this effort were the Northeast Energy Efficiency Partnerships, National Consumer Law Center, Chesapeake Climate Action Network, National Housing Trust, Natural Resources Defense Council, and American Council for an Energy Efficient Economy.