The Maryland Senate gave preliminary approval Tuesday to legislation that aimed at addressing rising utility costs and the state’s energy independence.

“Of the work that we are doing [this session], all of this comes down to trying to find ways to reduce costs for Marylanders. That is the number one issue that we are trying to address,” Senate President Bill Ferguson said Tuesday. “And we know that we’re in a climate crisis, and we know that we want to affordably move towards cleaner energy.”

The Next Generation Energy Act, sponsored by Ferguson and House Speaker Adrienne A. Jones, both Democrats, would reduce the need to build additional transmission lines by allowing Maryland to determine which sources — like natural gas, nuclear, solar, or other generation — its energy comes from.

The bill is one of three in a package of energy bills that Ferguson said is “probably the most comprehensive” the state has taken on in decades.

If the Next Generation Energy Act is enacted, the Maryland Public Service Commission would issue a request for proposals to secure new energy generation sources to fulfill the power needs of peak summer hours, allowing the state to phase out dirtier energy sources like coal and oil and maintain enough energy generation for when those plants eventually shut down.

The bill does not mandate the closure of existing oil or coal plants.

The legislation also mandates that all new energy-producing turbines be convertible to run on hydrogen when technology advances in a way that would fully support energy plants.

Several amendments were tacked onto the bill in the Senate Education, Energy and the Environment Committee, including measures to allow the Maryland EmPOWER program to issue loans in addition to grants, to have the state provide utility bill rebate payments based on usage by residential electrical customers during peak winter and summer months and prohibit utility companies from filing multi-year rate plans unless the Public Service Commission determines they benefit ratepayers.

If multiyear rate plans are approved, utility companies would not be able to return to the Public Service Commission to reconcile if they overspend what they projected in the plan.

“It’s a good balance of allowing the potential cost savings that come from multiyear rates for ratepayers while also getting rid of this second bite of the apple,” Ferguson said.

Though the bill was passed out of the committee on a bipartisan basis, Senate Minority Leader Steve Hershey, an Eastern Shore Republican, offered an amendment to completely prohibit multiyear rate plans by October of this year.

“I think we’ve seen that this has not worked, multiyear rates,” said Hershey. “I think we’ve seen, year after year, we know we’re going to see increases in utility costs, … and that we should go back to just traditional rate making.”

Senate President Pro Tem Malcolm Augustine, a Prince George’s County Democrat, asked the chamber to resist Hershey’s amendment, saying that if utility companies can use multiyear plans “in the right way,” it should be a tool they can use to save ratepayers money.

“They don’t have to use it,” said Augustine. “They can still use the traditional style.”

This amendment, as well as an amendment to reduce the goals of the state’s Renewal Energy Portfolio Standard by 15%, was rejected.

“The environmental community in Maryland has never, ever cared about what it costs to achieve these goals,” Hershey said.

The bill also has provisions regarding battery storage procurement, accountability for the price utility companies pay to replace gas pipes and contract labor, waste incineration, infrastructure for large-load energy customers, energy company officials’ use of private jets and nuclear procurement.

The Next Generation Energy Act and the package’s other two bills will likely receive final approval Tuesday night or Wednesday. It will then move to the House chamber for debate.

The last day of the 2025 legislative session is April 7.

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