A bill signed into law by Gov. Larry Hogan on Monday creates an energy storage pilot program in Maryland.
The program, which takes effect on June 1, requires the state’s four investor owned utilities to issue a solicitation by April 15, 2020, for the first of two energy storage projects. A solicitation for the second energy storage project must be issued by Sept. 15, 2020. The state’s Public Service Commission must determine which projects to approve by April 15, 2021, and by Feb. 28, 2022 all the projects must be in operation.
The law does not specify project size.
The law, SB 573, charges the Public Service Commission to evaluate the energy storage projects and present an interim report to the state’s General Assembly by July 1, 2024, and a final report by Dec. 31, 2026.
Each of the state’s four IOUs – Potomac Edison, Baltimore Gas and Electric, Delmarva Power and Light, and Potomac Electric Power – must submit projects that use one of four models specified in the law.
- A utility-only model under which the electric company owns and controls the project for grid reliability and operates it in wholesale markets when it is not providing grid services;
- A utility and third-party model under which the electric company owns and controls the project for grid reliability and a third party operates it in wholesale markets when it is not providing grid services;
- A third-party ownership model under which the utility contracts with a project owned by a third party for grid reliability and allows the third party to operate the project in wholesale markets when the project is not providing grid services; and
- A virtual power plant model under which the utility aggregates, or uses a third-party aggregator, to receive grid services from distributed energy storage projects owned by customers or a third party. The virtual project would be used by customers or the third party for other applications when it is not providing grid services.
Each of the utilities must use at least two of the models and one of those must not include utility ownership, that is, it must use either the third-party or virtual model.
If it is not extended, the pilot program ends on Dec. 31, 2026. The law also specifies that the pilot program may not preclude any other investment by a public service company in energy storage, and the termination of the program may not affect the cost recovery by an investor-owned electric company for the lifetime of an energy storage project.
The bill creating the energy storage pilot program was first introduced in the state’s House of Delegates and sponsored by Democratic Delegates Marc Korman and Kumar Barve.
In 2017, Maryland became the first state to offer an income tax credit for energy storage.