Maryland RELIEF Act Bars Data Center Grid Costs from Utility Bills
The Maryland House of Delegates voted 105 to 27. The Senate voted 35 to 11. Hours before the 2026 legislative session’s Sine Die deadline on April 13, Governor Wes Moore, Senate President Bill Ferguson, and House Speaker Joseline Peña-Melnyk announced the Utility Reducing Energy Load Inflation for Everyday Families Act, a bill that rewrites how Maryland utilities allocate the costs of grid expansion.
The most immediate provision requires data centers to fund their own energy infrastructure upgrades. The bill also bars utilities from passing regional transmission organization joining costs to ratepayers, prohibits shifting executive compensation expenses to customer bills, mandates that rate cases use historic costs rather than forward-looking forecasts, and directs $200 million from the Strategic Energy Investment Fund toward direct offsets and clean energy projects. Moore, citing a 13 percent increase in Maryland energy prices, said people are “getting crushed.”
$3.5 billion in transmission projects that lacked regulatory review. The RELIEF Act extends Public Service Commission oversight to all supplemental transmission projects, including underground lines that previously escaped review. Maryland ratepayers had been exposed to $3.5 billion in supplemental transmission spending that the PSC had no authority to examine. Under the new law, every transmission project requires federal approval ensuring both reliability improvement and reasonable cost. The provision closes what legislators characterized as a loophole: billions in infrastructure spending flowing through utility bills without regulatory scrutiny.
Data center phantom load registry. Maryland’s fastest-growing electricity consumers now face a specific regulatory apparatus. The act establishes a data center registry through the PSC to track what officials described as “phantom load,” capacity that data centers have reserved but not yet activated. That uncommitted load distorts resource planning and drives infrastructure spending years before a single server rack draws power. More immediately, data centers must fund their own grid upgrades. The principle embedded in the statute is that the load causing the infrastructure need pays for the infrastructure.
RTO costs and executive compensation off the rate base. Two provisions target specific line items that have migrated onto ratepayer bills. Utilities can no longer pass through the costs of joining regional transmission organizations, closing a loophole that allowed utilities to claim incentive payments for participating in grid organizations they already belong to. Executive salary expenses are barred from recovery through customer rates. Neither provision eliminates the underlying costs. Both redirect them from residential and commercial ratepayers to utility shareholders.
Historic costs replace forward-looking forecasts. Maryland had allowed utilities to set rates using forecast test years, a ratemaking methodology that lets utilities project future costs and begin recovering them before they are incurred. The RELIEF Act pauses this practice and directs the PSC to study whether forward-looking rate cases should return. Under historic-cost ratemaking, utilities can only recover costs they have actually spent. For commercial and industrial customers paying demand charges linked to system peak costs, the distinction is material: forecast-based rates front-load projected infrastructure spending, while historic-cost rates lag actual expenditures. In a period of rapid grid investment, that lag means lower bills for the duration of the pause.
EmPOWER rollback trades efficiency mandates for immediate bill relief. The most politically contentious element of the package is its treatment of Maryland’s EmPOWER program, which requires utilities to invest in energy efficiency and recover those costs through customer surcharges. The RELIEF Act cuts energy efficiency funding and lowers program targets. The trade is explicit: lower monthly bills today in exchange for reduced investment in the efficiency programs that would lower consumption tomorrow. House Minority Leader Jason Buckel and Senate Minority Leader Steve Hershey Jr. supported the bill from the Republican side, suggesting the EmPOWER cuts built the bipartisan margin that produced a 105 to 27 House vote. Speaker Peña-Melnyk called the package “the crowning achievement of this legislative session.”
$200 million in direct offsets. The bill allocates $100 million from the Strategic Energy Investment Fund to offset utility fees and $100 million toward clean energy projects and simplified residential permitting. A limited-income program caps monthly bills for vulnerable households, with potential annual savings reaching $1,400 for qualifying residents. The projected minimum saving for average ratepayers is $150 per year.
The RELIEF Act arrived the same week PJM, the regional grid operator serving Maryland and 12 other states, released a proposal to procure 14.9 GW of new capacity through a backstop mechanism designed to address the same underlying shortage. Where Maryland legislates cost allocation, PJM proposes a market solution: confidential bilateral contracts between power suppliers and large loads, brokered by PJM and Charles River Associates, followed by a central procurement for any remaining shortfall. PJM’s own projections show a potential capacity gap of 50 to 60 GW over the next decade. Battery storage, demand response, and distributed energy resources are all explicitly eligible to bid. A request for information opens April 16 with responses due May 4 and a FERC filing targeted for June. Jefferies analysts expect “clear pushback” from states over procurement costs.
BGE and Pepco, the two largest Maryland utilities in the PJM footprint, serve dense commercial building portfolios where demand charges constitute the single largest line item on monthly electricity bills. The historic-cost ratemaking pause and the RTO cost prohibition both reduce upward pressure on those charges. How much depends on implementation: the PSC still must write the rules, and the one-year forecast test year study creates uncertainty about whether the ratemaking change becomes permanent.
Other PJM states face identical cost allocation pressures. Virginia required utilities to measure grid utilization before approving new infrastructure spending. Michigan created a megawatt-for-megawatt storage matching requirement for data center grid access. Pennsylvania and New Jersey have not yet acted. The Maryland model, with its specific prohibition on RTO cost pass-through and its data center self-funding mandate, offers the most detailed template so far for legislators confronting the question at the center of every PJM rate case: who pays for the grid that data centers need?
Sources
Energy Relief Legislation Passes on Final Day of Maryland Session (The Daily Record)
Maryland Energy Costs: Utility Bills Relief Act (CBS Baltimore)
Maryland Utility RELIEF Act Passes (RTO Insider)
Maryland Passes Relief Package for Utility Customers (E&E News)
PJM Proposes 14.9 GW Backstop Capacity Procurement (Utility Dive)