Officials on Monday opened applications for a $200 million clean energy auction to help fund solar, wind and other energy projects. But the program isn’t expected to lower residents’ electric bills anytime soon.

The Megawatts for Maryland program aims to increase electricity supply as demand grows, and officials say that more generation could help ease energy costs over time. But the projects have yet to be selected, and developers will have up to seven years to bring them into operation. MEA spokesperson Erin Dempsey told The Baltimore Sun Monday that grants won’t be disbursed to developers until the projects reach “commercial operation.” Then the funds would be recovered and remain in the SEIF for future appropriation, Dempsey said.

“This program is an investment in energy affordability for Maryland in the medium- to long-term,” said Kelly Speakes-Backman, director of the Maryland Energy Administration (MEA). “This is not going to be something that impacts our bill tomorrow.”

“We know there’s no one-size-fits-all solution to energy affordability, but this is simple economics,” she said. “When high demand sends prices up, we need to bring more supply online.”

The program will draw its money from the state’s Strategic Energy Investment Fund (SEIF), which supports energy and climate initiatives. The auction will receive up to $100 million in each of the next two fiscal years. Previously, SEIF dollars have helped the state balance its budget.

The fund receives revenue from sources including payments electricity suppliers make instead of meeting certain renewable energy requirements and proceeds from auctions of carbon-emissions allowances through the Regional Greenhouse Gas Initiative, a multistate program. Republicans have argued that costs associated with these programs are passed on to utility customers.

“Every single program that they have run out on the backs of Maryland ratepayers has failed, and they know it,” said Republican Del. Brian Chisholm, who represents parts of Anne Arundel County.

Ratepayers won’t directly pay for the new $200 million program announced Monday, though some lawmakers like Chisholm have argued SEIF indirectly shifts costs to consumers.

People’s Counsel David Lapp, who protects Marylanders from unfair utility charges, said in a statement that customers don’t directly pay for contributions that suppliers make to SEIF. But utilities “indirectly pass costs to customers,” in a way that can’t be separated, Lapp added.

Earlier this year, Gov. Wes Moore signed a fiscal 2027 budget redirecting $292 million from SEIF into the state’s general fund. It’s unclear whether lawmakers will pull from SEIF again this year as the state faces a projected deficit of more than $2.5 million.

State says new generation could ease costs over time

The auction is part of the Utility RELIEF Act, a sweeping utility reform package that lawmakers passed and Moore signed in May in an effort to address rising electricity bills.

The program will award grants to eligible developers of new renewable energy generation and energy storage projects. The state plans to select projects through a competitive process in which developers submit bids and eligible applicants requesting the lowest price per megawatt-hour can receive grants. Eligible projects include certain solar, wind and other renewable energy sources, as well as energy storage. Applicants must have completed preliminary development steps, including applying for relevant approvals from state regulators or the regional grid operator, PJM Interconnection, and notifying local officials about their proposed projects.

Officials have said the projects could collectively generate enough electricity to power about 150,000 homes a year. The projects have not yet been selected, however, and MEA has not provided a specific megawatt total for the expected projects. A typical home in the United States averages slightly more than 10 megawatt-hours a year, according to the U.S. Energy Information Administration.

Moore said in a news release Monday that the program would “drive down costs for the long-term.” His administration has also said the state funding will help fill a financing gap created when the Trump administration ended federal investment tax credits for clean energy projects.

Chisholm said he opposed the federal tax credits because he believes they favored certain energy sources and could direct money to developers whose projects never get completed. “I am not anti-wind or solar, I just want it to compete on the free market,” he said.

Rebecca Rehr, director of climate policy and justice at the Maryland League of Conservation Voters, said both short-term and long-term solutions to Maryland’s energy affordability crisis are needed. “An investment today in this type of program means people save over time,” Rehr said.

Chisholm said he’s skeptical of long-term energy promises given the debt he said the EmPOWER energy efficiency program is accruing. That program also came under scrutiny earlier this year after two former inspectors alleged millions in ratepayer funds were misspent.

Developers interested in applying must submit applications by Nov. 30. Applicants deemed eligible must submit a bid price by Jan. 22, the MEA said. The state will then negotiate with the winning applicants and begin to execute the grants, MEA officials said.

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