SB 83
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 83 (Senator Kramer)
Finance Economic Matters
Utility Regulation - Consideration of Climate and Labor
This bill requires the Power Plant Research Program (PPRP) to include an evaluation of
the impact of electric power plants on climate change as part of its ongoing research, as
specified. Separately, the Public Service Commission (PSC), in supervising and regulating
public service companies, must consider (1) the maintenance of fair and stable labor
standards for affected workers and (2) additional specified climate effects and greenhouse
gas (GHG) emissions. Relatedly, PSC may not take final action on a Certificate of Public
Convenience and Necessity (CPCN) without considering the effect of climate change on
the project and, for a generating station, the impact of the project on GHG emissions and
its consistency with the State’s GHG emissions reduction goals.
Fiscal Summary
State Effect: Special fund expenditures increase by $219,500 in FY 2022. Future year
expenditures reflect annualization and ongoing costs. Special fund revenues increase
correspondingly from assessments imposed on public service companies. General fund
expenditures increase by $30,000 to $40,000 annually beginning in FY 2022. Other costs
likely can be absorbed within existing budgeted resources, as discussed below.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
SF Revenue $219,500 $260,100 $267,700 $277,000 $286,600
GF Expenditure $35,000 $35,000 $35,000 $35,000 $35,000
SF Expenditure $219,500 $260,100 $267,700 $277,000 $286,600
Net Effect ($35,000) ($35,000) ($35,000) ($35,000) ($35,000)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: Minimal.
 Analysis
Current Law:
Greenhouse Gas Emissions Reduction Act
The Greenhouse Gas Emissions Reduction Act, originally enacted in 2009 and made
permanent and expanded in 2016, was enacted in light of Maryland’s particular
vulnerability to the impacts of climate change. Under the Act, the State was required to
develop plans, adopt regulations, and implement programs to reduce GHG emissions by
25% from 2006 levels by 2020 and must further reduce GHG emissions by 40% from
2006 levels by 2030; the 2030 reduction requirement terminates December 31, 2023.
Power Plant Research Program
PPRP in the Department of Natural Resources (DNR) is required to undertake a continuing
research program for electric power plant site evaluation and related environmental and
land use considerations. PPRP is funded through an assessment on electricity used in the
State, which accrues to the Environmental Trust Fund (ETF).
Public Service Commission Supervisory and Regulatory Powers
PSC must supervise and regulate public service companies subject its jurisdiction to
(1) ensure their operation in the interest of the public and (2) promote adequate,
economical, and efficient delivery of utility services in the State without unjust
discrimination. In doing so, PSC must consider the public safety, the economy of the State,
the conservation of natural resources, and the preservation of environmental quality. PSC
must also enforce compliance with legal requirements by public service companies.
Certificates of Public Convenience and Necessity
For information on the CPCN process, see the Appendix – Certificate of Public
Convenience and Necessity.
State Fiscal Effect: PSC requires expert staff for both the labor and climate change aspects
PSC must consider under the bill. Additionally, both the Maryland Department of the
Environment (MDE) and DNR advise that they require contractual services to assist with
additional evaluations under the bill’s CPCN process, although DNR indicates that it can
absorb such costs within its existing budget.
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PSC
Special fund expenditures for PSC increase by $219,537 in fiscal 2022, which accounts for
the bill’s October 1, 2021 effective date. This estimate reflects the cost of hiring three staff
to handle the additional workload and provide the necessary expertise related to public
service company labor standards and climate change under the bill. It includes salaries,
fringe benefits, one-time start-up costs, and ongoing operating expenses.
Positions 3.0
Salaries and Fringe Benefits $197,168
Other Operating Expenses 22,369
Total FY 2022 PSC Expenditures $219,537
Future year expenditures reflect full salaries with annual increases and employee turnover
and ongoing operating expenses. Special fund revenues increase correspondingly from
assessments imposed on public service companies as authorized under current law.
MDE
MDE anticipates one or two consultant assessments of potential GHG emissions will be
needed each year, at a cost of $15,000 to $20,000 each. Accordingly, general fund
expenditures for MDE increase by $30,000 to $40,000 annually beginning in fiscal 2022.
DNR
DNR advises that it anticipates additional consultant costs of approximately $100,000 each
year associated with CPCN evaluations, but that it can absorb such costs in its existing
budget. To the extent that such costs cannot be absorbed, special fund expenditures for
ETF increase.
Additional Information
Prior Introductions: SB 656 of 2020, a similar bill, passed the Senate and was jointly
referred to the House Economic Matters Committee and the House Environment and
Transportation Committee, but no further action was taken. Its cross file, HB 531, received
a hearing from the House Economic Matters Committee, but no further action was taken.
Designated Cross File: HB 298 (Delegate Charkoudian) - Economic Matters.
SB 83/ Page 3
Information Source(s): Public Service Commission; Maryland Department of the
Environment; Department of Natural Resources; Office of People’s Counsel; Department
of Legislative Services
Fiscal Note History: First Reader - January 19, 2021
rh/lgc Third Reader - March 16, 2021
Revised - Amendment(s) - March 16, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 83/ Page 4
Appendix – Certificate of Public Convenience and Necessity
General Overview
The Public Service Commission (PSC) is the lead agency for licensing the siting,
construction, and operation of power plants and related facilities in the State through
Certificates of Public Convenience and Necessity (CPCN). The CPCN process is
comprehensive and involves several other State agencies, including the Department of
Natural Resources (and its Power Plant Research Program), and the Maryland Department
of the Environment.
Subject to limited exemptions described below, a person may not begin construction in the
State of a generating station, overhead transmission line, or a qualified generator lead line
unless a CPCN is first obtained from PSC. “Generating station” is not defined in statute;
however, the PSC definition in regulation excludes a facility with up to two megawatts of
capacity if it meets other specified requirements.
The CPCN process, detailed further below, involves the notification of specified
stakeholders, the holding of public hearings, the consideration of recommendations by
State and local government entities, and the consideration of the project’s effects on various
aspects of the State infrastructure, economy, and environment.
In December 2020, PSC initiated a rulemaking (RM 72) to revise regulations governing
CPCNs for generating stations.
Notification Process
On receipt of a CPCN application, PSC – or the CPCN applicant, if required by PSC –
must immediately provide notice to specified recipients, including the executive and
governing body of affected local governments, affected members of the General Assembly,
and other interested persons. When providing the notice, PSC must also forward the CPCN
application to each appropriate unit of State and local government for review, evaluation,
and comment and to each member of the General Assembly that requests a copy.
Public Hearing and Comment
PSC must provide an opportunity for public comment and hold a public hearing on a CPCN
application in each county and municipality in which any portion of the construction of a
generating station, overhead transmission line, or qualified generator lead line is proposed
to be located. PSC must hold the hearing jointly with the governing body of the county or
municipality, and must provide weekly notice during the four weeks prior to the hearing,
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both in a newspaper and online. PSC must also coordinate with each local government to
identify additional options for providing notice of the hearing through other types of media.
PSC must ensure presentation and recommendations from each interested State unit, and
must allow representatives of each State unit to sit during hearing of all parties. PSC must
then allow each State unit 15 days after the conclusion of the hearing to modify the unit’s
initial recommendations.
Public Service Commission Considerations
PSC must take final action on a CPCN application only after due consideration of
recommendations of the governing body of each county or municipality in which any
portion of the project is proposed to be located and various aspects of the State
infrastructure, economy, and environment. For example, PSC must consider the effect of
the project on the stability and reliability of the electric system and, when applicable, air
and water pollution. There are additional considerations for an overhead transmission line,
including the need to meet existing and future electric demand.
Generating Station Exemptions
There are three general conditions under which a person constructing a generating station
may apply to PSC for an exemption from the CPCN requirement:
 the facility is designed to provide onsite generated electricity, the capacity is up to
70 megawatts, and the excess electricity can be sold only on the wholesale market
pursuant to an interconnection, operation, and maintenance agreement with the local
electric company;
 at least 10% of the electricity generated is consumed onsite, the capacity is up to
25 megawatts, and the excess electricity is sold on the wholesale market pursuant
to an interconnection, operation, and maintenance agreement with the local electric
company; or
 the facility is wind-powered and land-based, the capacity is up to 70 megawatts, and
the facility is no closer than a PSC-determined distance from the Patuxent River
Naval Air Station, among other requirements.
However, PSC must require a person that is exempted from the CPCN requirement to
obtain approval from the commission before the person may construct a generating station
as described above. The application must contain specified information that PSC requires,
including proof of compliance with all applicable requirements of the independent system
operator.
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Statutes affected:
Text - First - Utility Regulation - Consideration of Climate and Labor: 2-405 Environment, 3-303 Natural Resources, 2-113 Natural Resources, 7-108 Natural Resources, 7-207 Natural Resources
Text - Third - Utility Regulation - Consideration of Climate and Labor: 2-405 Environment, 3-303 Environment, 2-113 Environment, 7-108 Environment, 7-207 Environment