Del. Charkoudian Pushes Md. Toward Community Choice Energy

Del. Lorig Charkoudian (D-Montgomery)

Maryland lawmakers are considering legislation that would allow the state’s municipalities and counties to negotiate energy purchasing on behalf of their residents, in a program called Community Choice Energy, or Community Choice Aggregation.

If the measure is approved, Maryland would join nine other states that allow counties and municipalities to aggregate the buying power of individuals to secure alternative energy contracts and negotiate lower rates.

“It’s a really exciting bill because it represents what we call energy democracy,” the bill’s House sponsor, Del. Lorig Charkoudian (D-Montgomery) said during a hearing in the Economic Matters Committee Thursday. “We put decisions of energy supply into the hands of the people.”

Instead of just deciding to purchase energy from an alternative supplier, each local government would choose first what kind of power it wants to purchase on behalf of its residents. Supporters of The Community Choice Energy Act say it introduces competition into the marketplace and drives down prices.

“How they [local governments] do it is reflective of the values in their community,” Charkoudian said. “Is the lowest price possible the most important to you? Is the most renewable energy the most important to you? Is it some mix of the two?”

But John Fiastro, representing NRG Energy, said that Community Choice Aggregation is not democratic. “Today we have choice,” Fiastro told committee members. “Shoppers can choose what energy supply they want from any given supplier. This bill closes the marketplace and gives us fewer choices.”

Several counties and municipalities have already passed resolutions in support of the bill, including Prince George’s County, Montgomery County, Baltimore City, University Park and Hyattsville. Other local governments have resolutions pending.

“I can’t think of a better way for local governments to encourage competition for clean energy,” Montgomery County Executive Marc B. Elrich (D) told the committee.

According to the Environmental Protection Agency, in 2016, Community Choice Aggregation sold about 8.7 billion kilowatt hours of green power to about 3.3 million customers.

Jacqueline Boone Allsup, a vice president of the Maryland State Conference of the NAACP, said the bill would create favorable circumstances for introducing green energy and for green jobs, economic development and community health.

“It would also lead to less air pollution and fewer negative impacts on the environment,” she told the committee.

The legislation would allow customers to opt out. Customers would be enrolled automatically in Community Choice Energy if they don’t opt out within 30 days of receiving a notice in the mail. Supporters of the bill said this model allows for lower prices.

“If people want to opt out and buy dirty energy, we’re not going to stop them,” Elrich said. “I prefer that our jurisdiction set the standard for what we want.”

But, Del. Christopher T. Adams (R-Lower Shore) called the practice “slamming.”

“You’re trying to force your environmental goals by taking everyone in your county and slamming them into one product,” Adams said.

Bill Kress of the Retail Energy Supply Association said the association could not support the bill unless it was opt-in.

“Eighty percent of the people switched into a CCA [Community Choice Aggregator] don’t know what’s going on,” Kress said. “Think carefully about whether constituents are affirmatively choosing a product they want.”

But Charkoudian said the current system is an opt-out model, because residents are automatically enrolled in  standard offer service and must opt out of it if they want to choose an alternative energy source.

“I can tell you now that this is a very tight bill. A lot of issues that have been raised are addressed in the bill,” Charkoudian said. “But that doesn’t mean I’m not open to amendments.”

Charkoudian introduced a similar bill in last year’s legislative session, but she said that bill had a lot of “technical flaws,” and didn’t move past committee.

If the legislation passes, each local government would need to hold its own public hearings, and select a plan, which would need to be approved by the Maryland Public Service Commission.

“I’m not asking you to decide anything for the Montgomery County Council,” Elrich said. “I’m asking you to allow us to have the discussion.”

A companion bill, sponsored by Sen. Pamela Beidle (D-Anne Arundel), is up for a hearing in the Senate Finance Committee on Feb. 25.