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Lawmakers push MEA on large unspent balances, canceled grants and proposed expanded uses of RGGI/ACP funds
Summary
Maryland Energy Administration officials told lawmakers they will improve reporting and transparency after DLS highlighted $39M in canceled grants, unclear fund balances and proposals to expand allowable ACP/RGGI uses; MEA said many cancellations are encumbrance mechanics and pledged reorganization to show impact.
The House subcommittee’s review of the Maryland Energy Administration (MEA) budget on Feb. 26 focused on whether large balances in the Strategic Energy Investment Fund and related accounts are being spent effectively, why MEA canceled about $39 million at fiscal 2025 closeout, and whether proposed BRFAA language to expand allowable uses of Alternative Compliance Payments (ACP) and RGGI auction revenues is appropriate.
DLS flagged an FY27 MEA allowance of about $399.4 million — a 38.5% increase — driven largely by renewable and clean energy program funding. Analysts asked MEA to explain why low‑ and moderate‑income energy efficiency programs show an anticipated decrease in measured energy savings despite higher spending, why $39 million of FY25 funds were canceled for lack of applicants, and why committee narrative or restrictive language should be added where fund descriptions are late or incomplete.
"MEA canceled a total of 39,000,000. MEA reported these cancellations were due to lack of sufficient applications," the DLS presentation said while recommending restricted appropriations until MEA provides closer detail on spending by program and source.
Acting MEA director Kelly Speaks Backman said recent program results are strong — noting community solar, school electrification projects and energy savings for thousands of LMI households — and emphasized that some cancellations reflect the return of encumbered funds when grantees withdraw or cannot complete projects. Finance director James Cobb explained that long‑duration grants can revert if applicants cancel and that some merger‑settlement funds are narrowly restricted and therefore slow to expend. Cobb also said MEA is improving closeout reporting and anticipates better utilization rates; he told the committee MEA’s spending rate has increased from roughly 60–70% up toward 85–90% of appropriations.
Committee members asked about large proposed contingencies and transfers in BRFAA and pointed to specific provisions authorizing transfers from SIF/ACP accounts (for example, authorizations in the BRFAA to transfer tens or hundreds of millions for other purposes). DLS recommended striking duplicative provisions and asked MEA to clarify the planned uses of ACP and RGGI revenues and any impacts to programs targeted to low‑ and moderate‑income communities.
Lawmakers and public witnesses urged a strong, prioritized deployment of funds for heat pumps, induction cooktops and community‑led electrification projects. Environmental advocates said MEA should prioritize LMI programs and use existing funds to scale high‑impact deployments rather than hold large unspent balances.
MEA staff committed to provide the committee with more detailed fund‑by‑program spend plans and to reexamine administrative processes so that additional funding details appear in the fiscal 2028 budget submission if necessary.
The subcommittee did not vote on budget items during the MEA presentation; members requested follow‑up reports and an explanatory reconciliation of cancellations and unspent balances.
