With Gov. Wes Moore’s all-but-promised signature on this year’s legislative energy policy overhaul the Utility RELIEF Act, cuts and changes to the EmPOWER program are on the way and already sparking concern for utility companies and climate and consumer advocates alike.
EmPOWER is Maryland’s flagship energy efficiency program and is paid for by all ratepayers through a utility bill surcharge.
Utility companies then use that money to incentivize making homes and businesses more energy efficient.
There are multiple energy efficiency measures that EmPOWER can aid in, including home energy audits, transitioning to energy efficient equipment and appliances, as well as insulation and weatherization upgrades.
Senior Manager of Clean Energy Solutions at BGE Jessica Yu says since the program’s inception in 2009, BGE has delivered more than $1.7 billion in incentives, rebates and bill credits back to over 6.4 million participants.
“We're always looking for ways to raise awareness around our programs and increase participation because we want as many customers as possible to take advantage of these programs,” Yu said, explaining beyond financial rebates, EmPOWER helps Maryland deliver on its climate goals and improve grid reliability.
One of the biggest perceived cuts to EmPOWER is a temporary reduction in its emission reduction goals over the next several years.
The legislature opted to scale back greenhouse gas emission reduction targets from 2.5 percent each year to 1.75 percent each year from 2027 through 2029.
The reduction goals will gradually increase back up to 2.5 percent by 2036, ultimately reducing program spend over the next ten years.
While supporters of the Utility RELIEF Act say this is a tangible way to provide ratepayers with some savings, Senior Policy Manager with the State and Utility Policy Team at American Council for an Energy-Efficient Economy (ACEEE) Anna Johnson argues the opposite.
Johnson spearheaded a report in late March that estimates weakening the reduction goals could ultimately cost ratepayers $592 million in net increased electricity costs.
“Even though you might see bill savings initially, that's going to come at the cost of locked-in, higher energy costs in the future, as the grid has to procure more energy that would otherwise have been saved,” she said.
Senate President Bill Ferguson (D-Baltimore City) says the scale-back gives the state the opportunity to take a deeper dive into how EmPOWER is benefiting Maryland ratepayers.
“I wouldn't say it's a cut to EmPOWER. It's an adjustment. It's a temporary review and pause of the program to ensure that it's getting the best value,” Ferguson said at a press conference in March. “The shrinking of the program will be based on which features and functions are the most cost effective.”
Yu says BGE is still reviewing the details of the Utility RELIEF Act to better understand the full impacts to EmPOWER, but she says the utility recognizes that the program’s goals have become “more challenging and more costly to achieve overtime.”
“That's partly because of the program's past success, like transforming the lighting market,” Yu said, referring to the transition to more efficient LED light bulbs. “And also due to factors outside of EmPOWERS control, such as rising equipment costs and more stringent energy codes and building standards.”
But some clean energy and consumer advocates are arguing utilities could be doing a lot more with the program.
“This notion that EmPOWER has run its course, the low-hanging fruit is not available and there’s not ample opportunity to increase energy efficiency of our homes is dead wrong,” Maryland PIRG — a consumer protection nonprofit — Senior Advisor Emily Scarr said.
Johnson says there are still plenty of upgrades to be done in the realm of insulation and HVAC, especially in converting homeowners to zero-emission heat pumps, which use electricity to move heat rather than generating it via fuel.
“We don't believe at ACEEE that we're anywhere close to running out of efficient efficiency opportunities, although we do recognize that many of these utility programs are going to have to evolve in the next couple years to find some of these savings and to revamp the way that they run their programs to make sure that they're doing it in a cost-effective way,” Johnson said.
The Office of People’s Counsel (OPC) — an independent state agency that advocates on behalf of ratepayers — released a report on Friday revealing that all Maryland utility companies, except for Washington Gas, achieved their minimum greenhouse gas reduction goals for 2025.
Additionally, the report found that generally all utilities overestimated the budgets necessary to achieve the reduction goals.
There was a broader conversation within the legislature this year on if utilities should be the ones administering the EmPOWER program at all.
Maryland uses a hybrid model, where the state administers part of the program specifically for low-income residents known as the EmPOWER Maryland Limited Income Energy Efficiency Program — utilities administer the rest.
The Maryland Department of Housing and Community Development (DHCD) runs the state’s side of the program.
Some advocates have criticized utility companies for not targeting energy efficiency savings programs to more low-income customers, but Yu says the customer ultimately receives more benefits if they go through the state side of EmPOWER.
“It's the programs that are more expensive that provide those deeper retrofits that are really kind of transforming a customer's home that if you are income qualified, meeting a certain threshold, that you would be able to get better and more robust incentives through DHCD,” Yu explained. “So oftentimes it's not that we don't want to serve these customers, it's that they can be served and get higher incentives if they go through DHCD.”
The Utility RELIEF ACT requires the PSC to submit a report to the General Assembly by November 2027 that studies whether a third-party administrator would be more cost-effective than allowing utilities to run the program.
Yu says BGE would strongly oppose EmPOWER shifting to a third-party administrator.
“We believe the best way to protect our customers, ensure accountability and keep delivering real results is to build on what's working, not hand it off to an unregulated third party,” she said.
Johnson says who is best equipped to deliver energy efficiency programs often varies state-by-state.
“In some states, they found that there are ways to really streamline administrative costs and also deliver bigger programs more effectively using a central, statewide administrator. But other states have found that to be less less helpful,” she explained. “I don't think that there's really a one-size fits all model.”
The Utility RELIEF ACT also mandates that only electric customers, not gas, pay for the EmPOWER surcharge starting in 2027.
Between 2027 and 2029, emission reductions from community and residential solar generation will also be permitted to count up to 20% toward the targets.
While lawmakers anticipate several of these changes cumulatively to save ratepayers some money, one of the biggest cost-saving levers pulled is a transfer of $100 million in funds to pay down the EmPOWER program debt, reducing the fee ratepayers pay on their utility bills.
Overall, legislators believe these alterations will save ratepayers around $150 a year, or $12 a month.
Scarr told WYPR earlier this month that while she understands EmPOWER is one of the only clear line items that lawmakers can reduce to provide ratepayers with immediate savings, she hopes they don’t go any further.
“I think that they realize how tough that is, and know the long-term cost, so they're trying to find what they can live with as this balance of short-term relief without causing too much long-term damage. And so that's what I've been sort of saying, ‘Don't do any more,’” she said.
The Utility RELIEF Act will take effect immediately upon Moore’s signature, which is anticipated in the coming weeks.
