MEA budget rises to $200 million as ACP revenues surge; $90 million CIF transfer being planned

Samuel Quist, a budget analyst at the Department of Legislative Services, told the Public Safety, Transportation, and Environment Subcommittee that the Maryland Energy Administration(MEA) fiscal 2025 allowance totals roughly $200,000,000, about $29,500,000 (17.3%) higher than the fiscal 2024 working appropriation. Quist said renewable and clean energy programs account for about 81% of the total and that roughly $100 million is earmarked for solar-related programming.

Why it matters: MEA's revenue mix is shifting. Quist and agency officials said alternative compliance payments (ACPs) tied to the state's Renewable Portfolio Standard now fund a larger share of the agency's work than revenues from the Regional Greenhouse Gas Initiative (RGGI), creating both new program capacity and forecasting challenges.

"Up until 18 months or so ago, the ACP ran around $500,000 and you go to sleep and you wake up in the morning, it's $70,000,000," George Pinsky, Director of the Maryland Energy Administration, said, describing a recent, steep rise in ACP receipts. He told senators the growth has materially changed MEA's fiscal picture and requires deliberate program design and administrative capacity.

DLS flagged statutory CIF distributions and transfers that will continue to flow to other agencies: Quist summarized required payments including $2.1 million to the Maryland Energy Innovation Fund and an $8.25 million transfer to the Transportation Trust Fund to support a zero-emission vehicle excise tax credit program. He also noted documentation showing a $90,000,000 amount budgeted for a dedicated-purpose CIF account, and asked MEA to explain the planned uses and timing.

Pinsky said the administration, the Maryland Department of the Environment and MEA have begun interagency conversations and expect to announce priorities in the coming weeks. "This happened very quickly," Pinsky said of the Climate Solutions Implementation Plan and follow-on budget proposals, and he urged the committee to expect more detailed proposals shortly.

Programs and federal funds: MEA described several program areas that expanded in FY25. The department plans to grow a solar-equity program that offers up to $25,000 for low-income homeowners (including up to $5,000 for roof repairs) and highlighted community solar subscriptions that can yield approximately 20% bill savings for renters and multifamily customers. Quist said MEA expects $136,800,000 from the federal Inflation Reduction Act for two home energy rebate programs; MEA reported it had applied in January for an initial 2.5% administrative allocation and planned full applications pending DOE approval.

On transportation and charging infrastructure, Quist noted a $15,000,000 grant awarded to a public-private partnership led by the Maryland Clean Energy Center to develop community EV charging, and confirmed MEA will produce a study on EV charging in multifamily buildings.

Forecasting and administration: DLS asked MEA about fund-balance buildup and forecasting assumptions. Quist and agency staff explained that MEA now uses a seven-auction average (versus eight in prior years) for RGGI clearing-price projections and that ACP growth has increased uncertainty. Pinsky said MEA will aim to distribute most available program funds but must retain a cushion for timing and administrative needs: "We are not a bank, we don't want to charge interest, we want to just shift that money in and out," he told the committee.

Next steps: DLS recommended committee narrative directing DBM to include data on strategic energy investment fund revenues in the governor's budget books next year and requested reports from MEA on federal infrastructure and IRA funding and on the planned uses of the $90,000,000 in C funds. MEA agreed to provide further updates to the subcommittee.