Analysts and Maryland Energy Administration spar over $237.6 million FY‑26 allowance, cancelled grants and transfers from energy fund

The House Appropriations Committee's Transportation and Environment Subcommittee heard a detailed Department of Legislative Services review and agency response on the Maryland Energy Administration's (MEA) fiscal 2026 operating budget and program activity.

Suvika Bujal, the DLS analyst assigned to MEA, told the subcommittee the fiscal 2026 allowance “decreases by 26,800,000.0 or 10.1% to a total of 237,600,000.0,” and highlighted line‑item data showing large planned spending for renewable and clean energy programs, and a number of unresolved budget reporting discrepancies. Bujal’s presentation referenced cancelled grants, transfers from the Strategic Energy Investment Fund (SIF) and elevated auction revenues from the regional greenhouse gas initiative (RGGI).

The DLS analysis flagged: a total of $26,600,000 in grant cancellations at fiscal 2024 closeout (including $20.5 million in special funds and $1.6 million in federal funds); a $90,000,000 transfer from SIF to a Dedicated Purpose Account (DPA) in fiscal 2025; and a budget amendment that transferred $53,700,000 from that DPA to MEA to fund community electric vehicle supply equipment, electric school buses and building electrification. DLS also noted that alternative compliance payment (ACP) revenue and RGGI auction receipts have been unusually high, citing an ACP requirement of roughly $320.4 million for calendar 2023 reported to the Public Service Commission.

Director David Pinsky, testifying for MEA, described the agency’s mission and defended recent actions. “Our mission is to promote clean, reliable, affordable energy. And at the same time reduce greenhouse gases,” Pinsky said, and told members MEA will provide the reports requested by DLS. On the cancelled grants he said many applicants “stack their grants” and projects that did not mature were closed to free funds for other work.

Pinsky provided timelines for awards tied to the $53.7 million transfer from the DPA: he said school bus and community‑electrification infrastructure grants “will be awarded by the May of this calendar year,” and that remaining funds would be advertised at the start of fiscal 2026 with the expectation of “more requests than we have money available.” He also said, after internal finance review, MEA revised an earlier $138 million figure tied to ACP reporting to $98 million.

The DLS presentation and MEA responses concentrated on three budgetary risk areas:

- Fund balances and reporting consistency: DLS asked why MEA carried forward appropriations from as early as fiscal 2018 that were later cancelled; MEA said it canceled awards for projects that would not proceed and will provide program‑level data going forward.

- Use of transferred SIF/DPA funds: $90,000,000 was reported transferred into the DPA; of that, $53,700,000 was moved to MEA for specific grant programs. DLS asked how much of the $53.7 million has been awarded; MEA said awards for several programs will be completed by May and remaining funds will be advertised in the new fiscal year.

- Elevated non‑recurring revenues tied to compliance payments and auctions: DLS noted ACP receipts and RGGI auction revenues were at historic highs (DLS cited RGGI revenues of roughly $214.2 million in fiscal 2024 and early fiscal 2025 receipts totaling $127.4 million for the first two quarterly auctions). MEA said it does not know whether ACP and auction levels will remain elevated.

Committee members pressed MEA about program implementation details. Delegate Spiegel and others asked how to move large fund balances quickly into projects without creating management or oversight problems; Pinsky said MEA wants to “get as much of this money on the street and into projects as quickly as we can,” but cautioned that competitive grant processes are labor‑intensive and that larger, fewer awards tend to reduce administrative overhead. Delegates also asked about electric school bus contracts and county experiences; MEA staff said local jurisdictions make procurement decisions and the agency provides planning and incremental cost grants.

Why this matters: RGGI and ACP revenue flows and the SIF/DPA transfers materially affect MEA's ability to fund grants designed to reduce greenhouse‑gas emissions, expand electrification and support low‑ and moderate‑income households. Elevated auction and compliance revenues present a short‑to‑medium‑term opportunity to accelerate grant funding, but DLS asked the agency to explain both the canceled grant balance at closeout and inconsistencies across budget reporting sources.

What the agency will do next: MEA agreed to provide the DLS and the committee with the programmatic and source‑level reporting DLS recommended, and to update the committee on how much of the $53.7 million has been awarded and when remaining DPA funds will be requested and allocated.

Provenance: DLS presentation and MEA response began with the DLS analyst’s briefing and concluded with MEA Director Pinsky’s final remarks and Q&A in the same subcommittee hearing.

Sources and speakers quoted are listed below.