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PSC Adopts Green Power Price Cap
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The Maryland PSC established the annual green power price cap applicable to retail electric suppliers as the most recent trailing 12-month average standard offer service rate plus a green power adder based on the Tier 2 alternative compliance payment price which is $15 per MWh
Under this mechanism, which had been recommended by PSC Staff, the green product price will be calculated for a service territory by taking the difference between the current year’s RPS requirements and the green power percentage that is being offered in the product.
Staff gave the following example:
"If the green product is comprised of 51% green power, then this will be subtracted from that year’s RPS requirements. For 2026 the total RPS requirement is 40.5%. The resulting percentage would be 51% - 40.5% = 10.5%. This 10.5% will be known as the Green Power Premium Factor ('GPPF'). Under this model, suppliers will be rewarded for offering a greener product by being able to achieve a higher GPPF. The GPPF is then multiplied by the Tier 2 ACP which produces the Green Product Premium ('GPP') that the supplier will be permitted to add on to the most recent 12-month average SOS rate in the customer’s respective service territory."
"The Commission directs retail electricity suppliers in each service territory that offer green power to residential customers to do so at a price not exceeding the most recent 12-month average SOS rate of the
customer’s respective utility service territory, along with the Tier 2 ACP of $15 per MWh, including the GPPF and GPP as identified by Staff," the PSC directed
The PSC explained its use of the trailing SOS rate, rather than prospective SOS rates, by stating, in part: "The Commission continues to find the trailing 12-month average SOS rate to be beneficial in that it provides actual, known figures that do not risk overestimation, require the need for speculation, or cause delay, whereas the use of prospective SOS rates might. Trailing average SOS rates are required to be posted on utility websites to enforce transparency and enable supplier compliance, and allow the Commission, suppliers, and the general public to access data on trailing SOS rates regularly."
The PSC also observed: "The Commission notes that the SB 1 built-in review mechanism in PUA § 7-707(d)(2) requires the Commission to establish a maximum green product price annually, thereby allowing subsequent proceedings to ideally inform the Commission and interested parties of lessons learned, price fluctuations, and market indicators. Unfortunately, with there being no green product offers currently available for customers to select on the Maryland Electric Choice website, and with there apparently having been no green product offers available earlier in 2025, the Commission and interested parties are without data and feedback pertaining to prior examples. Nonetheless, the Commission continues to provide a directive intended to reflect reasonable, low-risk considerations for the green power pricing requirements."
Retail suppliers may individually petition for a different supplier-specific price cap based on their specific product and renewable energy
Case 9757
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November 7, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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