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SB 947

Maryland Co-Location Energy Innovation and Reliability Act

2025 Regular Session Introduced by Justin Ready and 1 co-sponsor

Requires PSC to regulate non-interconnected, co-located data-center generators as independent resources, with grid protections, cybersecurity, and annual performance reports.

Hearing 3/06 at 1:00 p.m.
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Bill Summary · SB 947

SB 947 — Maryland Co‑Location Energy Innovation and Reliability Act

Status: Hearing scheduled 3/06 at 1:00 p.m.
Introduced: Jan. 28, 2025 (Senators Ready & West)
Committee: Education, Energy, and the Environment
Effective date (as drafted): October 1, 2025
Companion: HB 1318

Main purpose

Require the Maryland Public Service Commission (PSC) to adopt regulations governing the construction and oversight of a specific kind of facility: a generating station that is co‑located with a data center but is not interconnected to the State electric transmission or distribution systems. The bill aims to set requirements to protect grid reliability, clarify regulatory status, and create reporting and operational standards for such co‑located, off‑grid generating stations.

Key provisions

  • Adds new §7‑207.4 to the Public Utilities Article directing PSC to adopt implementing regulations.
  • Scope: applies only to generating stations that (a) co‑locate a data center and (b) do not interconnect with Maryland’s transmission or distribution systems.
  • Regulatory elements PSC must adopt include:
    • Define such a generating station as an independent resource not subject to State retail‑customer or electricity‑supplier laws.
    • Clarify that State‑mandated electric distribution system fees and Renewable Portfolio Standard (RPS) obligations do not apply to the station or its energy.
    • Require on‑site backup electricity and on‑site generating capacity to support reliability.
    • Require robust physical and operational protections to ensure the station does not interact with the public grid.
    • Require cybersecurity safeguards.
    • Require CPCN applicants to demonstrate the station will remain non‑interconnected, comply with state and federal law, and contribute to State energy goals.
    • Require owners/operators to submit annual reports to PSC covering: (1) source and amount of energy used, (2) environmental impacts, (3) contributions to State energy objectives (efficiency/emissions), and (4) compliance with operational standards.
  • Directs PSC to promulgate regulations to implement the above.

Who is affected

  • Data center owners/operators and developers proposing co‑located, behind‑the‑fence generating stations.
  • Generating station owners/operators that plan to serve only co‑located loads and not interconnect to the grid.
  • Maryland PSC (rulemaking and CPCN review), state energy regulators, and possibly the Office of People’s Counsel (may participate in proceedings).
  • Utilities and ratepayers indirectly (policy clarifications could affect grid planning, resource adequacy, and cost allocation).
  • Local governments and communities near proposed projects (environmental and economic impacts).

Potential impacts and fiscal effects

  • PSC can adopt the required regulations with existing resources (per fiscal note). Office of People’s Counsel can likely participate with existing resources.
  • Broader fiscal and rate impacts are indeterminate and could be significant: the bill could influence whether new generation or data centers locate in Maryland, affect local tax and economic activity, and change how costs for universal service programs or RPS obligations are allocated.
  • Reliability and regional market impacts depend on the prevalence and design of such non‑interconnected co‑located stations; the PSC’s prior study (Chapter 537 of 2024) raised concerns about some co‑location configurations and recommended statutory clarity — this bill addresses one variant (non‑interconnected).

Procedural / timeline notes

  • Introduced late Jan. 2025 and assigned to the Education, Energy, and the Environment Committee.
  • Hearing scheduled for March 6, 2025 at 1:00 p.m.
  • Draft includes an explicit effective date of Oct. 1, 2025 for the Act.

Context

This bill implements regulatory guardrails for an emerging deployment model where data centers obtain power via co‑located generation that is isolated from the grid. It seeks to balance innovation and local economic development with system reliability, environmental transparency, and state energy policy objectives.

Compiled from official sources — confirm details with the bill’s official record.

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