Maryland Awarded Its First 440 Megawatts of Storage Capacity Credits, and State Law Confines the Program to Transmission-Connected Projects

The Maryland Public Service Commission announced on October 1 that it had conditionally selected two projects for Energy Storage Capacity Credits: the 400 MW Chalk Point Storage Project in Prince George’s County and the 40 MW Jade Meadow III project in Garrett County. Both carry four-hour durations on flat 15-year terms, at an estimated 6.98 cents a month for a typical residential customer.

Round 1 sought 800 MW. Five applicants responded and two withdrew. The 440 MW awarded is a little over half of what the Commission asked for.

Program scope. The Next Generation Energy Act permits only transmission-connected, front-of-meter storage. There is no distribution-level or behind-the-meter tranche in the program at all. Round 2 will chase the balance of a 1,600 MW cumulative target under a Request for Applications due by January 1, 2027.

The eligibility boundary is legislative rather than discretionary. The Commission did not weigh distribution-level or customer-sited storage against transmission-connected storage and conclude the latter scored better. The statute named the interconnection class, and the solicitation inherited it.

What the credit does. An Energy Storage Capacity Credit is not construction capital. It is a 15-year contracted revenue stream attached to a project that sells capacity into PJM, and the cost of it lands on retail bills at roughly seven cents a month for a residential customer.

That is a defensible design for a state trying to attract capital into a capacity-short RTO. It is also a design that works only for an asset that sells into the PJM capacity market in the first place. A battery in a commercial electrical room does not clear that auction. It reduces the kilowatts its own building is billed for. Whatever the merits of each, the two sit on opposite sides of the meter, and only one of them has a contracted revenue hedge available.

The behind-the-meter channel. Maryland’s one commercial behind-the-meter vehicle, the Commercial Storage Grant, exhausted its $2 million budget in September. The FY2027 round has not opened.

Maryland therefore has statutory authority to put 1,600 MW of fifteen-year contracted revenue support behind transmission-connected storage, while its customer-sited channel is a grant program that has run out of money for the current year with no successor round announced. The asymmetry is not a judgment the Commission made about relative merit. It is what the authorizing legislation permitted, compounded by a grant budget two orders of magnitude smaller than the procurement it sits beside.

Federal money for building energy codes has stopped moving. Latitude Media reported on October 2 that of the awards the Department of Energy publicly retained in April after cancelling 321 others, 69% have received negligible new funds and 44% have received nothing at all. Across the retained portfolio, roughly 1% of committed funds have been disbursed. The five retained hydrogen hubs have drawn $2 million against $112 million planned for the current phase.

A separate tranche of 1,731 ghosted energy-affordability awards worth $3.9 billion has been neither funded nor formally terminated. It includes $1 billion for state building energy code implementation. Also stalled is Urban Electric Power’s $6.5 million award for zinc cell manufacturing, which was to fund two 12-hour storage systems, one of them at a hospital.

The $1 billion line is the one with the longest reach into commercial buildings. State building energy code implementation funds the staff who write, adopt, and enforce codes and building performance standards. That is the regulatory machinery that converts a building’s peak load into a compliance obligation. Reading the freeze forward, which is interpretation rather than reported fact, the cities already operating under performance standards are unaffected, and the next tier of jurisdictions loses the staffing that would have moved them from intention to ordinance.

Three buyers, three different hedges. Utility-scale developers in Maryland now have a state-backed credit against PJM capacity exposure. Hyperscalers are writing their own: Amazon and Constellation announced a 20-year power purchase agreement on October 1 covering an expansion at a Maryland nuclear facility. Commercial building owners have neither a state credit nor the balance sheet to contract a nuclear plant, and are left with tariff design and the federal investment credit.

PJM capacity costs are the common pressure. The current rate of $122,039 per MW-year flows through to commercial and industrial facilities that have no mechanism to lock it in. The Maryland program hedges that exposure for one class of asset and one class of owner. The state’s second solicitation does not change the boundary, because the Commission cannot widen a scope the General Assembly wrote.

Round 2. The Request for Applications is due by January 1, 2027, and the proceeding record built around it is what a future legislative session would read. Maryland’s choice to legislate behind-the-meter storage out of its flagship program is also a precedent other states may copy, and the political economy favours repetition: transmission-connected procurement is easier to administer and easier to defend on cost per ratepayer. If that becomes the default shape of state storage programs, the commercial behind-the-meter segment stays dependent on federal tax credits and utility rate design rather than state incentive dollars.

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