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Retail Suppliers Allege 9-Sentence, 165-Word Mandatory Disclosure From PSC Required On All Green Power Marketing Is "Unduly Burdensome", Fails Supreme Court Test
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In a motion for partial summary judgment, the
Retail Energy Advancement
League (REAL) and Green Mountain Energy Company (the Plaintiffs) alleged that a 165-word disclosure required to conspicuously accompany all marketing materials for green power products in Maryland is "unduly burdensome", and fails U.S. Supreme Court precedent which limits a state's ability to regulate speech
Plaintiffs, in a motion for partial summary judgment, were addressing issues in Plaintiffs' lawsuit against Maryland's SB1 of 2024, which, among other things, imposed rate caps on non-green products and prohibited residential purchase of receivables, and also which requires certain disclosures and other provisions concerning the offering of renewable electricity plans
While, in cross motions for partial summary judgment, most of the issues raised by Plaintiffs, and by the state and the Maryland PSC (Defendants), reiterated previously reported arguments, Plaintiffs, on remand, now specifically address the permissibility of the PSC's specifically adopted disclosure requirements for green power products under SB1, after a federal appeals court remanded a suit to a federal district court with direction for the lower court to include a review of the PSC's implementation language (the PSC's implementation order had not yet been adopted at the time that Plaintiffs' original suit was filed)
As previously reported, a preliminary injunction has been adopted by the district court with respect to enforcement of SB1's green power provisions, but not with respect to the non-green provisions of SB1 (non-green price caps and the prohibition of residential POR, among other provisions)
See full background on the litigation here
In their motion for partial summary judgment, Plaintiffs allege that the PSC's adopted language regulating green power plans is "unduly burdensome", noting that the PSC's implementation of SB1's green power provision requires a 165-word, nine-sentence-long disclosure that has to appear, "in a conspicuous manner and in at least 12-point font".
Plaintiffs noted that the Supreme Court has previously found that "a mandatory 29-word disclosure" is overly burdensome.
"The PSC’s
script is five times longer, and adding it to all marketing will submerge suppliers’ speech in a sea
of regulatory boilerplate," Plaintiffs said
Citing precedent, Plaintiffs said, "a compelled disclosure imposes an
undue burden when it threatens to 'drown[ ] out' a speaker’s 'own message,' NIFLA, 585 U.S."
Plaintiffs alleged that the PSC's adopted 165-word disclosure would drown out a supplier's message by citing as an example marketing conducted by REAL member CleanChoice Energy
On December 26, 2024, CleanChoice
posted the following thirty-three-word message to its X account viewable to Maryland residents: "Give the planet the gift of cleaner air this holiday season. CleanChoice Energy makes it easy
to choose 100% renewable electricity—helping build solar projects and creating a greener future
for all."
"Had CleanChoice been required at that time
to include the PSC’s script in this marketing post in a 'conspicuous manner,' Md. Code Regs.
§ 20.53.07.07(B)(4), CleanChoice would have had to include 500% more text, 'overwhelm[ing]
any message' CleanChoice wished to communicate itself," Plaintiffs alleged
Plaintiffs also alleged that the PSC's adopted disclosure language is not uncontroversial (precedent requires compelled speech to be purely factual and uncontroversial)
The green power disclosure required by the PSC states as follows:
"The electricity delivered to your home is generated from a variety of sources, both
renewable and nonrenewable. Energy from renewable resources, such as wind
and solar, cannot be tracked directly into your home. Instead, the energy your
home uses will support renewable energy sources through the purchase of
renewable energy credits ('RECs'). A REC represents the environmental and
social good associated with 1 megawatt hour of renewable electricity generation.
RECs may be sold separately from the electricity itself, so the buyer of a REC
may be different than the buyer of the electricity. In your contract, X% of the
RECs qualify for Maryland’s renewable portfolio standard. By purchasing RECs
that qualify for Maryland’s renewable portfolio standard, you are supporting
renewable energy development in the region. Increased demand for, and
generation of, renewable electricity can help reduce conventional electricity
generation from fossil fuels in the region where the renewable electricity
generator is located. It may also have other environmental benefits such as
reducing regional air pollution."
Plaintiffs alleged that this language controversially favors regional benefits of green power over global benefits
"While
Maryland might prefer regional benefits, suppliers and customers often choose to prioritize
different national or global benefits," Plaintiffs said, with Plaintiffs arguing that non-regional green power may assist in customers' global goals of fighting climate change, or address national concerns about securing America’s energy future
"By
forcing suppliers to choose to prioritize speech about regional benefits over national or global
benefits, Maryland forces speakers to prioritize one side of a good-faith but contentious
disagreement about which goals renewable energy should emphasize -- e.g., local air pollution,
national energy security, or global climate change," Plaintiffs said
Moreover, Plaintiffs argued that the controversial nature of the PSC's disclosure follows from specific SB 1 statutory directives, and cannot be cured
Plaintiffs alleged, "The problem is that the Act’s 'statutory
directives' compel suppliers to speak on contested subjects and convey the State’s preferred
message. REAL, 175 F.4th at 567. The statute itself requires suppliers to convey the State’s
prescribed message concerning RECs and green power, including disclosures regarding the
'social good' of RECs, Md. Code, Pub. Util. § 7-707(f)(2), 'what the customer will actually be
paying for' when purchasing green power, id. § 7-707(g)(1), 'how the electricity that the
customer has purchased is generated,' id. § 7-707(g)(2), 'how the green power will benefit the
environment,' id. § 7-707(g)(3), the percentage of electricity that would be generated from PJM-region
RECs, id. § 7-707(g)(4), and the 'state in which the electricity was generated,' id. § 7-
707(g)(5)."
"The Commission cannot cure a
constitutional defect rooted in the Act’s own commands," Plaintiffs said
Plaintiffs also reiterated arguments that the green power provisions of SB1, which Plaintiffs argue are unconstitutional due to restrictions on speech, cannot be severed from the entirety of SB1, and argued that all of SB 1 must be struck
Plaintiffs argued that SB1 becomes, "incomplete and incapable of being executed in accordance with the
legislative intent," if the impermissible green power provisions are severed but SB 1's other retail market regulations stand
Plaintiffs also said that a new law changing the non-green price caps originally adopted under SB1 does not alter the severability analysis
"Provisions in 'separate acts' are still 'legally inseparable' where, as here, they 'constitute a
unified legislative scheme.' O.C. Taxpayers for Equal Rts., Inc. v. Mayor & City Council of
Ocean City, 375 A.2d 541, 548–49 (Md. 1977)," Plaintiffs said
In addition to seeking a court order finding SB1 to be unconstitutional, Plaintiffs argued that the PSC's Dec. 30, 2024 order ending residential POR pursuant to SB1, and accomplishing such by banning residential utility consolidated billing, must be enjoined by the court
Defendants, in a motion for partial summary judgment, countered that state-adopted limitations favoring RECs qualified in a specific RTO region are a court-recognized power of states
Defendants cited a case which upheld Connecticut's regional limit for RECs used for RPS compliance (Allco Fin. Ltd. v. Klee), and Defendants argued that the regional RECs favored under SB1, and the other non-regional RECs, are not "similarly situated" products
"Recognizing that Connecticut’s law served the 'legitimate interest in promoting increased
production of renewable power generation in the region, thereby protecting its citizens’ health,
safety, and reliable access to power[,]' the Second Circuit [in Allco] concluded that RECs produced in
Connecticut’s RTO and those produced outside should not be considered 'similarly situated' for
purposes of a facial discrimination claim under the Commerce Clause and the 'permissive' Pike
balancing test applied to the law in question," Defendants said
"In line with Allco, this Court should find that SB1’s use of RECs does not discriminate
against interstate commerce for two reasons. First, Maryland’s RECs are not same as Texas’, or
any other states’, RECs. RECs in Maryland, as in Connecticut, are in fact, 'inventions of state
property law,'" Defendants said
"There is no sufficiently pled factual allegation in
Plaintiffs’ Complaint, nor can they show otherwise, that Maryland’s RECs and the RECs they buy
outside of the PJM are the same product for the purposes of a dormant Commerce Clause analysis.
Given the fact that RECs from different states are not the same, Plaintiffs’ allegation that RECs in
other regions of the country 'provid[e] the same benefits with respect to climate-change
mitigation' is without merit," Defendants said
"Moreover, despite Plaintiffs’ conclusory allegations claiming
otherwise, the Allco court rejected this same argument. Allco Fin. Ltd., 861 F.3d at 105 (explaining
that 'Connecticut consumers’ need for a more diversified and renewable energy supply, accessible
to them directly through their regional grid or indirectly through adjacent control areas, would not
be served by RECs produced . . . in Georgia' as it is unable to be transmitted into Connecticut’s
RTO). This court should follow suit and find that outside RECs do not assist Maryland in creating
a more diversified and renewable energy supply that is actually accessible through its regional
grid. Accordingly, all Maryland has done with both its RPS and SB1 is to treat different products
differently in a nondiscriminatory fashion, which is entirely permitted by law," Defendants said
Defendants further said that retail suppliers are
free to secure RECs not just from Maryland, but from anywhere within the federally regulated region of
PJM (or even outside of PJM under certain specific circumstances), and thus SB 1 has created no unlawful preference for in-state RECs
Defendants said, "Plaintiffs cannot show that the statutory
scheme creates a clearly excessive burden on interstate commerce. Indeed, because SB1 requires
Maryland RECs which are not the same product as RECs from outside states, and otherwise does
not limit the flow of RECs into Maryland from other states, interstate commerce is not subject to
any burdens that are constitutionally cognizable."
U.S. District Court for District of Maryland, No. 1:24-CV-2820
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August 28, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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