MDE pushes amendments to building energy performance standards to add waivers, timelines and on-site credit

Secretary Serena McElwain told the Environment and Transportation Committee on Feb. 12 that the Department of the Environment seeks a "favorable with amendments" report for House Bill 49, a bill that adjusts how Maryland implements building energy performance standards for larger buildings.

The bill would codify a number of compliance flexibilities MDE has proposed since adopting the first-round BEPS regulations, Secretary Serena McElwain said. "This is now our moment to particularly based on the feedback that we're getting," she told the committee, arguing the changes balance industry concerns with the program's emissions-reduction goals.

Nut graf: Supporters and regulated building owners told the committee they want predictable standards but also relief from high upfront costs and cases where equipment upgrades are technically or economically infeasible. MDE's package would add three principal options: an economic-feasibility waiver for measures that lack reasonable payback or technical feasibility; a limited timeline extension for recently upgraded systems that delays the retrofit obligation; and an alternative compliance payment (ACP) option that allows owners to pay into a fund rather than complete immediate upgrades. MDE said ACP revenues would be reinvested into covered buildings.

Representatives from Montgomery County, Johns Hopkins, housing providers and industry trade groups described the bill as a needed refinement. John Monger, director of Montgomery County's Department of Environmental Protection, said the county supports the changes and emphasized the role BEPS can play in meeting county and statewide climate goals. Johns Hopkins requested additional carve-outs for hospitals and certain critical hospital systems and a cap on nonprofits' share of ACPs.

Commercial property owners and some trade groups warned of implementation costs. Rick Grama, who operates Atlantic Realty Group, said retrofit work can be highly disruptive in multifamily housing, requiring residents to relocate temporarily and potentially pushing rents higher; he advocated incentives rather than ACPs. Similar concerns came from hotel and grocery operators at later panels and were repeated by several trade associations.

Technical witnesses and energy consultants urged maintaining strong EUI (energy use intensity) and emissions targets. Cliff Majercik of the Institute for Market Transformation said Maryland should protect its emissions and EUI requirements, noting the economic-feasibility waiver in the proposed amendments can be renewed and that long-term energy efficiency provides sustained benefits.

Committee members pressed for specifics about the waiver process, ACP rates and local preemption language. Witnesses working with MDE said waivers would require demonstration of economic infeasibility and that some waivers could be renewed after five years as technology or energy prices evolve. Several building owners said they want clearer payback definitions (simple versus life-cycle) and caps on ACPs to avoid open-ended fees.

Ending: The committee did not take final action on the bill during the hearing. Support and opposition letters and multiple written amendment requests accompanied testimony. Questions from members focused on waiver definitions, ACP levels and how MDE will verify claimed infeasibility; MDE said it would develop verification and certified training for evaluators. The committee moved on after hearing both supportive testimony and detailed operational concerns from industry and local governments.