Enviros sound alarm over new budget amendment on clean building standards

As the General Assembly moves towards a final vote on the state budget Friday, environmentalists have become alarmed over a recently-inserted amendment that they believe guts and delays an innovative program to curb pollution in buildings and help ratepayers reduce their utility bills.

The green groups are dismayed with both the substance of the budget amendment and the stealthy way in which it was inserted into the annual spending plan — and argue that the move has critical implications for the state’s ability to implement the landmark Climate Solutions Now Act of 2022.

“We mainly feel betrayed,” said Jamie DeMarco, the Maryland director for the Chesapeake Climate Action Network. “This was done in the dead of night without consultation. This is a partial repeal of Climate Solutions Now.”

An analysis from the Maryland Department of the Environment (MDE), obtained by Maryland Matters, suggests that the amendment “creates a series of challenges” for the agency, which is taking the lead in carrying out the many provisions of the climate law.

The process for implementing the climate plan, with its broad strokes and bold mission, is now a maze of regulations, grant applications and technical adjustments. That’s what the budget amendment attempts to address.

Specifically, it would block funding for MDE to establish and adopt what are known as site energy use intensity standards for buildings until the agency has gone through certain bureaucratic procedures and issued economic reports on the feasibility of meeting greenhouse gas reductions in the building sector. Those energy use intensity standards were part of a broader climate benchmark known as building energy performance standards, which MDE has been developing over the past two years in a complicated process with a range of stakeholders.

The amendment was inserted into the House-Senate conference committee report on the budget earlier this week, at the insistence of the office of House Speaker Adrienne A. Jones (D-Baltimore County). Jones’ top aides felt that MDE was trying to rush through a regulation after turning in its proposed rule in December, about half a year late, and that the proposal was developed based on faulty modeling.

A state agency rule is generally evaluated by the General Assembly’s Joint Committee on Administrative, Executive and Legislative Review, but that panel traditionally does not meet during a legislative session. If MDE had issued its proposed rule earlier in 2023, the AELR committee might have been able to assess it before the end of the year.

“Climate Solutions Now was carefully crafted legislation,” said Jeremy P. Baker, Jones’ chief of staff. “The General Assembly’s budget language simply ensures the regulatory process faithfully follows the letter and intent of that law.”

While conceding that the amendment may delay full implementation of the building standards by several months, Jones’ aides believe a less hurried regulatory process will produce a more thoroughly vetted rule and allow for more public input. The 2022 climate bill doesn’t require the state to hit 20% carbon reduction goals for the building sector until 2030, which, in the view of Jones’ advisers, should give MDE plenty of time to catch up.

But environmental groups and the agency itself don’t see it that way. They believe MDE may have to restart the regulatory process altogether.

Josh Tulkin, Maryland director of the Sierra Club, said he and his colleagues were “alarmed that the Maryland General Assembly used the opaque, last-minute budget process to weaken and delay one of Maryland’s landmark climate programs.” He added that the budget conferees’ “backroom dealing…erodes public confidence and throws into question Maryland’s commitment to being a leader in addressing the climate crisis.”

“The regulation impacted by the amendment is the result of two years of transparent public engagement and rule-making, including collaboration between the administration, advocates, stakeholders, and experts,” Tulkin continued. “This policy was recommended by the Maryland Commission on Climate Change, passed into law, endorsed by the state climate action plan, and approved by the [state’s] Air Quality Citizens Advisory Committee.”

Asked to comment on the budget amendment, Jay Apperson, a spokesperson for MDE, wrote, “The Building Energy Performance Standards are a critical part of Maryland’s approach to achieving our nation-leading climate change goals that were mandated by the General Assembly. Implementation of the standards will secure significant greenhouse gas reductions, air quality improvements, and economic benefits from switching to clean energy in buildings.”

But an agency analysis of the amendment, forwarded Thursday to a lawmaker by another official in the Moore administration and obtained by Maryland Matters, painted a starker picture. MDE “is concerned with the impact of budget amendment…because improved energy efficiency is critical to managing increased electricity demand from the building decarbonization required to meet the [building energy performance standards] requirements,” the agency wrote.

“This budget amendment would force MDE to withdraw the proposed regulations, remove the [energy use intensity] provisions, and re-propose the regulation,” the analysis continued.

MDE also argued that the delayed process could put some of the state’s expected federal funding at risk. MDE, along with the Montgomery County and Washington, D.C., governments, applied for a $195 million climate pollution reduction grant from the U.S. Environmental Protection Agency to perform building upgrades to meet the building energy performance standards (BEPS).

“If this provision sets back the BEPS regulation process and introduces additional uncertainty around regulatory timelines for at least 2 more years, it will threaten our ability to win this large and highly competitive grant,” the MDE analysis says.

The agency goes on to say that removing energy use intensity targets from the state rule “is a significant change to the program that may require wholesale revision to the technical analysis required by the regulatory process. MDE and its technical assistance partners, including Federal agencies, may not have the budget or capacity to repeat that analysis on a rapid timeline this Spring.”

MDE estimated that it would cost about $300,000 to perform the study that the budget amendment requires. But the agency’s analysis also asked, “Will funding be restricted for multiple years? Can a budget create requirements that will be effective multiple fiscal years later?”

‘Without any accountability or recourse’

Environmental groups said the budget amendment runs counter to the intent of the Climate Solutions Now Act. That’s part of the argument the greens are using to urge lawmakers to reject the amendment.

“The Climate Solutions Now Act which went through three years of public vetting, dozens of hours of public hearing and debate, and which received hundreds of individual pieces of testimony on all sides before passage — and in the past two years has led to a dozen workgroups engaging in robust public participation and comment as part of thoughtful deliberation,” Maryland League of Conservation Voters Executive Director Kim Coble wrote in an email to lawmakers this week. “By contrast, budget language…was introduced after the public process of budget proposals and deliberation was concluded, with absolutely no transparency on the reason for the amendment, or the individuals or entities which requested this language or a chance for balanced input.”

Coble, who is also co-chair of the Maryland Commission on Climate Change, said the language of the amendment “threatens the work of every member of the General Assembly working on any issue by allowing a small group of unelected entities to override legislative will and intent without any accountability or recourse.”

When the compromise budget hits the House and Senate floors, lawmakers will be asked whether to concur with the conference committee budget agreement. There is unlikely to be any substantive conversation over the amendment governing the MDE green building program.

DeMarco, of the Chesapeake Climate Action Network, said that ultimately, it’s Maryland residents, who will benefit from clean building standards, who may suffer if the amendment becomes part of the budget — especially poorer residents living in older rental units.

“Last-minute political plays like this are not just hurting our climate goals, but real Marylanders,” he said.

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