PSC takes SB1 contract and green‑power questions under advisement as stakeholders seek clarity before Jan. 1

The Public Service Commission spent the longest portion of its Dec. 11 administrative meeting on how to implement Senate Bill 1 (SB1), including whether the statute’s price caps apply to perpetual (indefinite‑term) contracts as well as month‑to‑month and automatically renewing agreements, and on how to set an initial market‑wide cap for green power offerings.

Staff said SB1’s price‑cap provisions (cited in the hearing as Sections 7‑510(d) and 7‑604.2(b) of the Public Utilities Article) should be read to apply prospectively to month‑to‑month and automatically renewing residential contracts and to variable‑price perpetual contracts at the moment material terms are filled in. "SB1’s price caps ... apply to perpetual contracts as well as month to month and automatically renewing contracts," staff counsel summarized. Staff urged clarity to prevent suppliers from arguing contracts are grandfathered when the legislature intended consumer protections.

The Office of People’s Counsel and consumer advocates echoed staff’s consumer‑protection emphasis. Laurel Peltier of the Maryland Energy Advocates Coalition warned that months of permissive products had contributed to large consumer losses in recent years and urged the commission to "lean in" to the law’s consumer‑protection purpose.

Retail supplier representatives and a supplier coalition urged the commission to issue rapid, clear market guidance so suppliers can determine which contracts must be terminated or modified before Jan. 1, 2025. Eric Wallace, for the supplier coalition, said his clients need the commission to "call balls and strikes" and clarify whether indefinite‑term contracts that include variable pricing are grandfathered or must be treated as subject to SB1’s caps.

Commissioners asked targeted questions about how many contracts in the retail supply universe fall into each statutory bucket (fixed‑term, month‑to‑month, perpetual). Staff said existing monthly utility reports identify only how many customers are on retail choice generally, not contract types, and that the commission lacks a complete contract‑type breakdown without additional data from suppliers.

On green‑power pricing (Case 97‑57), parties disagreed about the methodology to set an initial baseline cap and what RECs qualify for the 'other' portion of a product. Staff and many utilities favor using a transparent 12‑month trailing SOS (standard offer service) average together with a REC‑component methodology (staff proposed an interim approach that uses the most recent tier‑2 REC price). The Office of People’s Counsel and several advocates argued for a prospective SOS price and a forward‑looking REC price that better reflect the cost suppliers will face in 2025. Retail suppliers asked the commission to set an interim market‑wide cap near the statutory upper bound (they proposed 150% of the trailing SOS average) so suppliers can construct and file green products while the commission completes rulemaking.

Given the number of unresolved legal and market questions, the commission took the SB1 issues under advisement, said it will seek additional input (and possibly legal briefs) on REC retirement and product composition, and plans to issue written guidance so market participants know what must change on Jan. 1 and what may be phased in later.

What to watch for: The PSC plans written guidance on SB1 implementation and follow‑on proceedings or briefs on the interpretation of 'perpetual' contracts and on whether RECs outside PJM may be used for the 49% portion of green products; those written rulings will shape supplier compliance and product filings heading into 2025.