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People's Counsel Suggests Additional Credit Requirements For Electric Suppliers Due To New Obligations
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In comments in a Maryland PSC proceeding concerning the obligation of electricity suppliers to procure energy storage resources (credits), the Maryland Office of People's Counsel said that the PSC should, "consider reasonable credit-support provisions for [electricity] suppliers as needed to protect against nonpayment risk and to ensure timely settlement," of the storage procurement obligations
PUA § 7-1226(a)(1)(ii) requires that each "electricity supplier" shall be responsible for purchasing storage capacity credits at a monthly fixed price schedule proportional to the electricity supplier’s capacity obligation
As previously reported, the specific storage procurement section of the law does not define the term electricity supplier. Under the PUA unless otherwise narrowed under a specific section, the term "electricity supplier" is broad, and, "includes an electric company, an aggregator, a broker, a marketer of electricity, and a person who provides electricity to a commercial or industrial customer in accordance with § 7–506.1 of this article." However, certain entities defined as electricity suppliers would have no capacity obligation, to the extent such entities are not LSEs in PJM (such as brokers)
OPC said that, at a minimum, electric suppliers should be subject to a clear "pay by" deadline for the cost of the storage, "with prompt notice to the Commission if a supplier fails to pay timely and an expedited cure and dispute process."
"Supplier nonpayment should be treated as a compliance issue subject to Commission oversight and enforcement, not a risk borne by customers through delayed credits or increased surcharges," OPC said
In separately filed comments, WGL Energy noted that a retail supplier's capacity obligation is not static, and that a retail supplier's capacity obligation, "fluctuates from month to month based on
variations in customer load and underlying contractual commitments".
WGL Energy said, "Because these load
variations require continual recalculations and adjustments to monthly storage credit purchases,
procurement at the individual retail supplier level creates administrative inefficiencies and
potential mismatches between actual load and required credits."
As such, WGL Energy favored procurement of the storage credits at the distribution level, stating, "procuring energy
storage capacity credits at the distribution level would better align procurement with system-wide load characteristics, promote administrative efficiency, and ensure more accurate
satisfaction of statutory capacity obligations."
In the alternative, if the required storage credits cannot be procured at the distribution level, WGL
Energy requested that retail supplier contracts executed prior to the storage procurement's implementation date be
grandfathered.
In separate comments, the Retail Energy Supply Association also favored allocating the storage procurement obligation solely to the EDCs for all delivery customers, with nonbypassable recovery
RESA said that, "a
nonbypassable distribution charge, imposed by the utilities upon all customers whether they shop
or not, to recover all costs related to the purchase of energy storage credits is the most efficient,
simple, and reasonable path forward".
RESA said, "The most efficient way to accomplish this
goal is for the Commission, consistent with the Act, to allocate the energy storage credit purchase
obligation to the utilities, enabling them to act as agents for the third-party suppliers for purposes
of complying with the Act. The utilities can then implement a nonbypassable distribution charge --
imposed upon all customers -- to recover their costs. This would be similar to the utilities’ future
purchases of offshore wind credits as well as zero-emission credits for new or upgraded nuclear
energy generation projects under the Act."
RESA noted that § 7-1226(a)(1)(ii) provides that each
utility and third-party supplier, "shall be responsible for purchasing storage capacity credits . . . ."
RESA said that the term "responsible" does not require that retail suppliers directly purchase the storage credits
RESA said, "This mandate does not require a third-party supplier to directly purchase the credits; rather, it
obligates the third-party supplier to 'be responsible for' purchasing the credits, which can be
accomplished if third-party suppliers are required to authorize the utility to purchase the necessary
credits on its behalf".
In separately filed comments, PSC Staff noted that the law, absent careful implementation, may potentially result in some customers (notably shopping customers) paying twice for storage
Staff said, "For example, a customer that purchases their electricity commodity from
Supplier XYZ would be billed for their share of that supplier’s purchase of energy storage capacity
credits. That same customer would then be billed a second time by their electric distribution
company for its required purchase of energy storage capacity credits, which are allocated to all
distribution customers through 'nonbypassable surcharge established by the electric company that
is added to the electric company’s base distribution rate or supply rate on customer bills.' Without
careful tariff and settlement design, a risk could arise that customer charges are not properly netted
or coordinated across supplier and electric company recovery mechanisms, therefore, care should
be taken in determining the electric company’s tariffs to prevent any double billing of customers
using an electricity supplier."
Although Staff recommended that much of the storage procurement framework be modeled after the current offshore wind credit framework, Staff did not propose assigning the storage procurement obligation solely to the utilities on behalf of all distribution customers
In separately filed comments, Baltimore Gas and Electric Company ('BGE'), Delmarva Power & Light Company ('Delmarva Power'), and Potomac Electric Power Company ('Pepco') (collectively, the 'Maryland Joint Exelon Utilities' or 'MJEU') noted the storage law's use of the term "electricity suppliers" for the storage credit purchase obligation, in contrast to the state's offshore wind law which assigns the obligation to purchase offshore wind credits to "electric companies"
"The MJEU needs clarification on the interpretation of the obligation to purchase storage capacity credits and whether the Commission interprets the requirement to mean that electricity suppliers providing retail choice and SOS have the obligation to purchase storage capacity credits," the MJEU said
MJEU suggested a work group process to address the procurement obligation and other issues
PC75, PC 75
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January 30, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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