Md. Code art. Public Utilities, § 7-704.4Md. Code, Public Utilities § 7-704.4

Current with changes from the 2024 Legislative Session

Section 7-704.4 - Procurement of offshore wind energy

(a)

(1) In this section the following words have the meanings indicated.

(2) "Community benefit agreement" has the meaning stated in § 7-704.1(e) of this subtitle.

(3) "Social cost of greenhouse gases" means the most recent social cost of greenhouse gases adopted by the U.S. Environmental Protection Agency.

(b)

(1) The Department of General Services, in consultation with the Public Service Commission, shall issue a competitive sealed procurement solicitation and may enter into at least one contract for a power purchase agreement to procure offshore wind energy and associated renewable energy credits from one or more qualified offshore wind projects.

(2) Each agreement entered into under paragraph (1) of this subsection shall have a term of not less than 20 years.

(3) When issuing the invitation for bids under this subsection, the Department shall take into consideration:

(i) the social cost of greenhouse gas emissions;

(ii) the State's climate commitments; and

(iii) the State's commitments under § 7-704.1(a) of this subtitle.

(4) The evaluation criteria for bids shall include:

(i) comparing the social cost of greenhouse gas emissions for off shore wind with the social cost of greenhouse gas emissions for nonrenewable power purchased from wholesale electric markets administered by PJM Interconnection; and

(ii) the extent to which an applicant's proposal provides for financial and technical assistance to support monitoring and mitigation of wildlife and habitat impacts associated with the proposed offshore wind project.

(5) Each agreement entered into under paragraph (1) of this subsection shall include:

(i) a community benefit agreement and domestic content preferences; and

(ii) a description of:

1.initial plans for mitigating the impacts of the construction and operation of the proposed offshore wind project on fisheries and the environment; and

2.the extent to which an applicant will provide for financial and technical assistance to support the monitoring and mitigation of wildlife and habitat impacts associated with the project.

(c)

(1) The Department of General Services shall identify the amount of energy necessary to meet the State's energy needs.

(2)

(i) The State shall use the energy procured under subsection (b) of this section to meet the State's energy needs and retire the associated renewable energy credits to meet its obligations under the renewable energy portfolio standard and Chapter 38 of the Acts of the General Assembly of 2022.

(ii) The State shall be exempted from the renewable energy portfolio standard requirements under § 7-703 of this subtitle if the Department of General Services procures 100% of the State's energy needs from the power purchase agreement required under subsection (b) of this section.

(3) The State shall offer for sale any energy or renewable energy credits remaining after the requirements under paragraph (2) of this subsection have been met on the competitive wholesale power market operated by PJM Interconnection, through bilateral sales to credit-worthy counter parties, or into renewable energy credit markets.

(d)

(1) The State shall:

(i) issue a draft solicitation for procurement of off shore wind energy for public comment and review on or before June 1, 2024;

(ii) issue a procurement for offshore wind energy on or before July 31, 2024;

(iii) provide a procurement submission process window of not less than 180 days; and

(iv) award contracts in a timely manner.

(2) (i) Subject to subparagraph (ii) of this paragraph ,on or before September 1, 2025 ,the State may enter into a contract or contracts for the procurement issued under paragraph (1) of this subsection.

(ii) The State may modify the date established in subparagraph (i) of this paragraph if an unforeseen circumstance adversely affects the procurement submission process.

(e)

(1) In addition to the solicitation and procurement issued under subsection (d) of this section, the State:

(i) shall issue a draft solicitation for procurement of offshore wind energy for public comment and review on or before September 1, 2025; and

(ii) shall issue a procurement for offshore wind energy on or before December 31, 2025.

(2) Subject to paragraph (3) of this subsection and in addition to any contract entered into under subsection (d) of this section, on or before March 31, 2027, the State may enter into a contract or contracts for the procurement issued under paragraph (1) of this subsection.

(3) The State may modify the date established in paragraph (2) of this subsection if an unforeseen circumstance adversely affects the procurement submission process.

(f) The State shall incorporate in the offshore wind energy procurement contract terms to facilitate low-cost project development and traditional project financing terms, including:

(1) terms that waive the automatic termination clause required under § 13-217 of the State Finance and Procurement Article;

(2) terms that establish remedies to reimburse costs incurred by the contractor directly attributable to the failure of the State to appropriate funds for the contract; and

(3) any other appropriate mechanisms to ensure that offshore wind energy projects that meet the terms of the contract will have certainty of payment through the duration of the contract.

(g)

(1) Within 90 days after the operational commencement date of the power purchase agreement, any contractor providing operations and maintenance services under an agreement with the Department of General Services shall submit to the Department attestation that the contractor has entered into a labor peace agreement with each labor organization that is actively engaged in representing or attempting to represent employees performing operations and maintenance work on the projects that:

(i) prohibits strikes, lockouts, or any other economic interference with the contracted project;

(ii) describes the class or classes of covered employees to whom the labor peace agreement applies;

(iii) describes any class or classes of employees not currently represented by a labor organization;

(iv) describes the classes of covered employees for which labor peace agreement negotiations have not yet concluded; and

(v) for classes of employees that are not covered by a labor peace agreement, provides an attestation that no labor organization has sought to negotiate such an agreement.

(2) A labor peace agreement required under paragraph (1) of this subsection shall be:

(i) valid and enforceable under 29 U.S.C. § 158; and

(ii) maintained as an ongoing material condition of any continuation of payments under any agreement required by this subsection.

(H) Nothing in this section may be construed to prevent the procurement of new offshore wind energy generation in accordance with the current or any future solicitation schedule.

Md. Code art. Public Utilities, § 7-704.4Md. Code, Public Utilities § 7-704.4

Amended by 2024 Md. Laws, Ch. 431,Sec. 1, eff. 6/1/2024.

Added by 2023 Md. Laws, Ch. 95, Sec. 1, eff. 6/1/2023.