Bill Summary – FastDemocracy

HB 768
                      Department of Legislative Services
                             Maryland General Assembly
                                   2021 Session
                           FISCAL AND POLICY NOTE
                                Enrolled - Revised
House Bill 768                  (Montgomery County Delegation)
Economic Matters                                                                  Finance
          Montgomery County - Community Choice Energy - Pilot Program
                                 MC 17-21
This bill establishes the Community Choice Aggregation Pilot Program and authorizes
Montgomery County to form a “community choice aggregator,” beginning
December 31, 2023, under specified conditions. The Public Service Commission (PSC)
must adopt related regulations by that date, including those related to risk mitigation for
standard offer service (SOS) customers. The pilot program must begin on the date the
county gives notice to PSC of its intent to form a community choice aggregator, or
April 1, 2024, whichever is earlier; the program ends seven years after beginning, but no
earlier than April 1, 2031. The bill also establishes a related workgroup and various study
and reporting requirements. The bill takes effect June 1, 2021.
                                    Fiscal Summary
State Effect: PSC can handle the bill’s requirements with existing budgeted resources due
to the delayed implementation dates; the bill is not anticipated to otherwise materially
affect State finances or operations.
Local Effect: Montgomery County revenues and expenditures increase beginning in
FY 2024 to the extent that the county chooses to form a community choice aggregator.
Small Business Effect: Potential meaningful.
                                        Analysis
Bill Summary: “Community choice aggregator” means a county that serves as an electric
aggregator for the purpose of negotiating the purchase of electric generation services from
specified entities for residential customers, which include master-metered multiple
occupancy residences and small commercial customers, that:
      are located within the county, including customers located within municipalities in
       the county;
      have not (1) selected an electricity supplier other than the SOS supplier or
       (2) refused to participate in the aggregation activities; and
      are not located in the service territory of a municipal electric utility or electric
       cooperative.
Subject to various specified requirements, the community choice aggregator may purchase
electric generation services from (1) an electricity supplier licensed by PSC or (2) an
electric generating or storage facility owned by the aggregator.
Beginning December 31, 2023, Montgomery County may form a community choice
aggregator under the bill, subject to specified notification, planning, and other
requirements, including PSC review and approval. Provisions related to the pilot program
may not be construed to prevent a residential or small commercial electric customer in the
county from choosing at any time (1) to enter into a contract with an electricity supplier
other than the community choice aggregator or (2) default SOS.
A residential or small commercial electric customer is deemed to have given permission to
the county to act on the customer’s behalf as a community choice aggregator under
specified circumstances.
A community choice aggregator may own an electric generating facility or electric storage
facility if the facility is designed to provide energy primarily for use by the participants of
the community choice aggregator. It may also promote and provide specified energy
efficiency programs.
The Montgomery County government must be solely responsible, and pay, for the costs
associated with any stranded costs for (1) contracts entered into by the community choice
aggregator for electric supply or (2) generation owned by a community choice aggregator.
Community Choice Aggregators Incorporated into Net Metering and Community Solar
Pilot Program
Community choice aggregators are incorporated into existing net metering and community
solar pilot program provisions as they relate to electricity suppliers. Eligible
customer-generators participating in net metering are authorized to participate in
community choice aggregation activities.
HB 768/ Page 2
Limitation on Fees, Taxes, or Other Charges
A community choice aggregator may not assess any new fee, tax, or other charge in the
aggregation charges or rates that is not related to the cost of (1) providing electricity supply
and electricity supply service, including service from a generating station owned by the
community choice aggregator; (2) promoting the use of renewable energy; and
(3) providing and promoting energy efficiency measures.
PSC Standards and Review
Based on a determination of the mitigation of volumetric risk, PSC may establish by order
or regulation a schedule by which a community choice aggregator may transfer load from
SOS to retail or wholesale contracts under an aggregation plan, subject to various specified
requirements. The schedule may not be longer than two years. PSC must consider the
impacts to the price and stability of the procurement of SOS when considering the schedule.
Relatedly, PSC may allocate the portion of delinquent electricity supply account
receivables attributable to aggregator customers throughout an electric company’s service
territory under specified circumstances related to avoiding adverse impacts on the cost of
SOS.
PSC must review applicable fees, request formats, and the format of data provided to
facilitate the intent of the bill. PSC must establish procedures for an electric customer who
is receiving electricity supply from a community choice aggregator to receive a bill
assistance credit or any other specified bill assistance to which the customer may be
entitled.
PSC must establish standards and procedures by regulation to protect the consumer rights
of residential customers within the territory of a community choice aggregator that receive
electricity supply through the aggregator. The regulations must prohibit discrimination
against a customer or on the basis of the location of the customer.
Community Choice Energy Workgroup
PSC must establish and staff the Community Energy Choice Workgroup by
September 1, 2021. The workgroup consists of specified stakeholders, such as a
representative of each affected investor-owned electric company, a representative of the
Office of People’s Counsel, and one representative of minority residential communities.
While nothing related to the establishment of the workgroup may be construed to limit the
authority of PSC to take action, including the adoption of regulations, without a
recommendation of the workgroup, PSC must still seek the advice and recommendation of
the workgroup when implementing the bill and adopting regulations.
HB 768/ Page 3
Reporting Requirements
The bill establishes various reporting and study requirements for PSC during and upon
conclusion of the pilot program, including a report approximately one year prior to the
termination of the program and a final report due to the Governor and the General
Assembly by December 31, 2031.
Current Law: A county or municipality may only act as an aggregator if PSC determines
that there is not sufficient competition within the boundaries of the local jurisdiction.
“Aggregator” means an entity or an individual that acts on behalf of a customer to purchase
electricity or gas. It does not include (1) an entity or individual that purchases electricity or
gas for its own use or for the use of its subsidiaries or affiliates; (2) a municipal electric
utility or a municipal gas utility serving only in its distribution territory; or (3) a
combination of governmental units that purchases electricity or gas for use by the
governmental unit.
The Electric Customer Choice and Competition Act of 1999 facilitated the restructuring of
the electric utility industry in Maryland. The resulting system of customer choice allows
the customer to purchase electricity from a competitive supplier or to continue receiving
electricity under SOS. Default SOS electric service is provided by a customer’s electric
company (e.g., Baltimore Gas and Electric Company or Pepco). Competitive electric
supply is provided by competitive electricity suppliers. In either case, the electric company
delivers the electricity and recovers the costs for delivery through distribution rates.
Local Fiscal Effect: The bill authorizes Montgomery County to form a community choice
aggregator beginning December 31, 2023, which, under the bill, is allowed to own
generation assets and/or enter into contracts with electricity suppliers on behalf of persons
within its jurisdiction. Therefore, Montgomery County revenues and expenditures increase
beginning in fiscal 2024 to the extent that the county chooses to form a community choice
aggregator.
Small Business Effect: The bill does not require that Montgomery County form a
community choice aggregator; to the extent that the county, with its population of more
than 1.0 million, chooses to do so, small electricity suppliers may experience reduced
demand for their services. However, the bill allows a community choice aggregator to
purchase electricity from an electricity supplier – a potentially large customer. Therefore,
the effect on any particular electricity supplier cannot be determined, but could be
meaningful.
HB 768/ Page 4
                                Additional Information
Prior Introductions: HB 561 of 2020, a similar bill, passed the House with amendments
and was referred to the Senate Finance Committee, but no further action was taken. Its
cross file, SB 315, received a hearing from the Senate Finance Committee, but no further
action was taken. SB 660 of 2019, a similar bill, received a hearing from the Senate Finance
Committee, but no further action was taken. Its cross file, HB 730, received a hearing from
the House Economic Matters Committee but was referred to interim study.
Designated Cross File: None.
Information Source(s): Public Service Commission; Department of Human Services;
Office of People’s Counsel; Montgomery County; Department of Legislative Services
Fiscal Note History:      First Reader - February 14, 2021
rh/lgc                    Third Reader - March 11, 2021
                                 Revised - Amendment(s) - March 11, 2021
                                 Revised - Clarification - March 11, 2021
                          Enrolled - April 9, 2021
                                 Revised - Amendment(s) - April 9, 2021
Analysis by: Stephen M. Ross                           Direct Inquiries to:
                                                       (410) 946-5510
                                                       (301) 970-5510
HB 768/ Page 5
Statutes affected: 
Text - First - Montgomery County - Community Choice Energy - Pilot Program MC 17-21: 1-101 Public Utilities, 7-306 Public Utilities, 7-306.2 Public Utilities, 7-507 Public Utilities, 7-510 Public Utilities, 7-510.3 Public Utilities, 7-512.1 Public Utilities
Text - Third - Montgomery County - Community Choice Energy - Pilot Program MC 17-21: 1-101 Public Utilities, 7-306 Public Utilities, 7-306.2 Public Utilities, 7-507 Public Utilities, 7-510 Public Utilities, 7-510.3 Public Utilities, 7-512.1 Public Utilities
Text - Enrolled - Montgomery County - Community Choice Energy - Pilot Program MC 17-21: 1-101 Public Utilities, 7-306 Public Utilities, 7-306.2 Public Utilities, 7-507 Public Utilities, 7-510 Public Utilities, 7-510.3 Public Utilities, 7-512.1 Public Utilities