Md. Code art. Public Utilities, § 7-704.3Md. Code, Public Utilities § 7-704.3

Current with changes from the 2024 Legislative Session

Section 7-704.3 - Offshore wind energy development

(a) The General Assembly finds and declares that it is in the public interest to upgrade and expand the transmission system to accommodate the buildout of at least 8,500 megawatts of offshore wind energy from qualified offshore wind projects serving the State by 2031.

(b)

(1) To meet the goals established under § 7-703 of this subtitle and subsection (a) of this section, the Commission, in consultation with the Maryland Energy Administration, shall request that PJM Interconnection conduct an analysis of transmission system upgrade and expansion options that take into consideration both onshore and offshore infrastructure.

(2) The Commission:

(i) shall consult with other states served by PJM Interconnection to evaluate regional transmission cooperation that could help achieve the State's renewable energy and offshore wind energy goals with greater efficiency;

(ii) shall work with PJM Interconnection to ensure that the analysis requested under paragraph (1) of this subsection includes an analysis of solutions that:

1. use an open-access collector transmission system to allow for the interconnection of multiple qualified offshore wind projects at a single substation;

2. avoid a significant outage, or single contingency, of any part of the transmission system;

3. reduce permitting risks, impacts on communities, and unnecessary high costs;

4. leverage existing infrastructure;

5. offer benefits that address additional grid challenges; and

6. address any other issues that the Commission identifies; and

(iii) may consult with owners of transmission facilities in the State to gather relevant technical information.

(3) The Commission may enter into any necessary agreements with PJM Interconnection for transmission planning to:

(i) initiate PJM Interconnection's analysis; or

(ii) assist with the solicitation of proposals for offshore wind transmission projects.

(4) On or before July 1, 2024, the Commission shall submit a status update on the analysis requested under paragraph (1) of this subsection to the General Assembly, in accordance with § 2-1257 of the State Government Article.

(c)

(1) On or before July 1, 2025, the Commission shall issue, or request that PJM Interconnection issue, one or more competitive solicitations for proposals for open access offshore wind transmission facilities and complementary onshore transmission upgrades and expansions.

(2) The Commission may issue, or request that PJM Interconnection issue, further solicitations for proposals after this date if determined necessary by the Commission.

(d) In developing criteria for selecting a proposal under this section, the Commission:

(1) shall consider the analysis required under subsection (b) of this section, including a consideration of potential interconnection points;

(2) shall evaluate the potential for cooperating with other states in the PJM region to maximize consumer benefits that will best achieve the State's renewable energy and offshore wind energy goals; and

(3) may consult with the Administration, electric companies, transmission facility owners, and other states or entities designated by those states in developing or coordinating equivalent standards for the approval of transmission projects under this section that will facilitate the integration of multiple offshore wind energy projects and potential multistate offshore wind transmission projects.

(e)

(1) The Commission shall include, or work with PJM Interconnection to include, specifications in the solicitation that require proposals to:

(i) allow future transmission lines to connect in a meshed manner and share landing points;

(ii) consider other onshore and offshore clean energy generation and storage facilities;

(iii) incorporate community benefit agreements in accordance with § 7-704.1 of this subtitle;

(iv) address the siting, environmental, and socioeconomic information required to be considered by the Commission under § 7-207 of this title for an application for a certificate of public convenience and necessity, including opportunities for public engagement and comment with units of State and local government and the general public;

(v) demonstrate net benefits to ratepayers in the State when compared with an alternative baseline scenario under which 8,500 megawatts of offshore wind energy capacity is connected to PJM Interconnection independent of an offshore wind transmission project to achieve the goal established under § 7-704.1(a)(1)(i) of this subtitle; and

(vi) ensure a competitive bidding process by redacting proprietary information provided to the Commission or to PJM Interconnection.

(2) The Commission may evaluate, or request that PJM Interconnection assist with the evaluation of, proposals that include:

(i) upgrading the existing transmission grid;

(ii) extending the existing transmission grid onshore and offshore to be closer to offshore wind energy locations;

(iii) interconnecting between offshore substations;

(iv) adding energy storage; and

(v) the use of HVDC converter technology to support potential weaknesses in the transmission grid.

(3) The Commission may select a proposal or proposals that include:

(i) federal funding in the form of a match, grant, loan, or ownership and operation by the United States government;

(ii) cost sharing among states or recovery of transmission costs through federal transmission rates, consistent with the policies and tariffs of the Federal Energy Regulatory Commission;

(iii) a combination of the funding methods outlined in items (i) and (ii) of this paragraph; or

(iv) any other available funding mechanisms.

(4) Each proposal should maximize access to and be consistent with the terms of the U.S. Department of Energy funding programs, including those established:

(i) under the federal Infrastructure Investment and Jobs Act;

(ii) under the federal Inflation Reduction Act of 2022;

(iii) through the U.S. Department of Energy Transmission Facilitation Program; and

(iv) through any loan programs, office programs, or resiliency funding.

(f) The solicitation process shall:

(1) include a prequalification process to ensure the financial and technical competence and capabilities of the entities responding to the solicitation for proposals;

(2) provide for rigorous separation between individuals or firms participating in the review, analysis, and selection of the proposals by or on behalf of the Commission and those participating in the development or management of proposals; and

(3) promote rigorous competition among prequalified entities in the preparation and submission of their proposals.

(g) The Commission may modify, or request that PJM Interconnection modify, a solicitation for proposals at any time in order to satisfy eligibility criteria for U.S. Department of Energy funding programs.

(h) In selecting a proposal under this section, the Commission shall take into consideration the total amount of new transmission infrastructure needed to:

(1) maintain electric system reliability;

(2) achieve the State's offshore wind, renewable energy, and decarbonization goals;

(3) obtain demonstrable benefits to the consumer and environment; and

(4) foster economic development and job creation in the State.

(i) The Commission shall:

(1) request that PJM Interconnection assist with the evaluation of each proposal submitted in accordance with this section; and

(2) after notice, one or more hearings to receive public comment, and an evidentiary hearing, and subject to subsection (j) of this section, on or before December 1, 2027, by order, select a proposal or proposals for development:

(i) using a funding mechanism or combination of funding mechanisms identified in subsection (e)(3) of this section; and

(ii) that demonstrate net benefits to ratepayers in the State when compared with an alternative baseline scenario under subsection (e)(1)(v) of this section.

(j) If the Commission finds that none of the proposals adequately support the goals established under this section or demonstrate net benefits to ratepayers in the State when compared with an alternative baseline scenario under subsection (e)(1)(v) of this section, then the Commission may end the solicitation process without selecting a proposal.

(k)

(1) The Commission may, for a proposal selected under subsection (i) of this section:

(i) adopt conditions for the construction and operation of facilities included in the proposal; and

(ii) consider any conditions proposed by the Power Plant Research Program.

(2) The requirement to obtain a certificate of public convenience and necessity under § 7-207 or § 7-208 of this title does not apply to a proposal selected under subsection (i) of this section.

(3) An order selecting a proposal under subsection (i) of this section constitutes authorization by the Commission to construct and operate facilities that would otherwise require a certificate of public convenience and necessity under § 7-207 or § 7-208 of this title.

(l) Except as provided in subsection (k) of this section, a proposal selected under this section is subject to all other relevant requirements for the siting and construction of transmission lines.

(m) Selection of coordinated transmission proposals may not impact the interconnection plans of earlier offshore wind projects, including OCS-A 0490 (US Wind) and OCS-A 0519 (Skipjack), unless the leaseholders for these projects opt to participate in the proposal by notifying the Commission by mail or e-mail before the completion of the analysis of transmission system expansion options under subsection (b) of this section.

(n) If no proposal has been selected under this section by December 1, 2027, the Commission shall submit a statement of determination to the Governor and General Assembly that:

(1) provides a comprehensive explanation of the Commission's determination; and

(2) recommends a path forward to achieve the State's goal under subsection (a) of this section.

(o) After the Commission selects a proposal or proposals, the Commission shall work with the Maryland Energy Administration, transmission developer or developers, transmission facility owners, PJM Interconnection, the Federal Energy Regulatory Commission, and any other states that voluntarily participate, to facilitate the development of the proposal or proposals and the construction of the proposed offshore wind project or projects.

(p) The Commission:

(1) shall carry out the provisions of this section by obtaining information through request, cooperation, subpoena, or any other legal method from transmission owners, PJM Interconnection, or any other entity; and

(2) may retain consultants.

Md. Code art. Public Utilities, § 7-704.3Md. Code, Public Utilities § 7-704.3

Added by 2023 Md. Laws, Ch. 95, Sec. 1, eff. 6/1/2023.