Recent legislation forces customers enrolled in clean energy plans to return to fossil-fuel utility service

BALTIMORE, Oct. 1, 2024 /PRNewswire/ — Today, the Retail Energy Advancement League (REAL) filed a lawsuit challenging the recently enacted Senate Bill 1 (SB1), which restrains retail energy companies from truthfully marketing their clean energy products to residential customers in Maryland, in violation of the First Amendment to the U.S. Constitution and Maryland state law.

For decades, Maryland residents have enjoyed the right to access a variety of offers in the competitive energy market, shop for the supply portion of their electric bill, and choose a plan from a retail energy supplier instead of the default utility supply service. Many Marylanders choose to exercise this freedom by selecting green power alternatives offered by retail energy companies.

SB1, sponsored by Senator Augustine (D-Prince George’s County) and Delegate Crosby (D-St. Mary’s County), was signed into law in May despite more than 3,000 Maryland residents advocating against the legislation. Disguised as a consumer protection bill, the actual impact of SB1 is to prohibit retail energy companies from truthfully representing that certain voluntary renewable energy credits (“RECs”) they offer consumers are “green.” That severely restricts the ability of retail energy suppliers to compete against the utility and continue offering existing popular products and plans.

In Maryland, more than 300,000 residential customers exercised their right to choose a supplier and many of those customers chose a 100% renewable energy product instead of default service. Under SB1, many, if not all, of those customers could have their current contracts canceled on January 1, 2025.

“This is a great program, so for the people who are not diligent or maybe who are not as informed, it would be great if the government, instead of concentrating on trying to regulate what the companies are doing, would advocate for the program and educate more consumers on their options,” said John Walther, a Baltimore City resident.

“If this law is allowed to take effect, it will drive renewable energy providers out of the Maryland market, leaving hundreds of thousands of consumers without access to clean energy and forcing them back into outdated, fossil fuel-dominated supply,” said Chris Ercoli, President and CEO of REAL. “Our organization remains committed to protecting consumer choice and defending Maryland’s clean energy market. We must preserve the principles of competition and innovation in Maryland’s energy sector and urge lawmakers to revisit this harmful legislation,” said Ercoli.

Maryland’s current Renewable Portfolio Standard (RPS) requires both utilities and suppliers to source 36% of the electricity sold in the state with premium RECs from specific types of energy resources and geographic areas.

Prior to SB1, retail energy suppliers could market plans as “100% renewable” by obtaining an additional 64% of voluntary RECs, typically from sources within the U.S. After SB1, retail energy suppliers are prohibited from calling these offerings “100% renewable.” To use those words, SB1 requires retail energy suppliers to obtain at least 51% of their RECs from the Maryland RPS-compliant premium RECs and only 49% from other sources—even though it is indisputable that the offering is in fact “100% renewable” even if the RECs do not meet the criteria created by the Maryland RPS.

Expanding, instead of restricting, access to the voluntary REC market is critical to achieving GHG emission reduction targets. According to the Environmental Protection Agency, “Consumers can play a significant role in transforming the power sector by creating demand for renewable electricity. This not only increases the proportion of total electricity being generated from clean, renewable resources but also helps to scale the market for these technologies and products, helping to bring per-unit costs down for future renewable projects.”

The legislation also directs the Maryland Public Service Commission to set an annual price cap for all RECs marketed as green energy by retail energy suppliers.

REAL’s lawsuit explains that the marketing restrictions on renewable energy plans in SB1 are unconstitutional, as REAL’s members use the terms prohibited by statute consistently with the guidance set forth by the EPA and Federal Trade Commission to highlight to consumers the environmental benefits provided by voluntary RECs. SB1 prohibits retail energy suppliers from using words such as “renewable,” “green,” and “clean” to market and communicate truthful information to customers about how plans with voluntary RECs can help reduce carbon emissions and combat climate change, among other benefits.

“For more than a decade, Maryland residents have supported clean energy through 100% renewable energy plans for their homes,” says Christy Nagle, Head of Retail at CleanChoice Energy. “It’s one of the easiest ways people can make the biggest impact on the environment. CleanChoice Energy customers have replenished more than 10 billion kilowatt hours of clean energy onto the electric grid, and we are proud to enable their energy choice.”

“Our customers know the impact that choosing renewable sources of energy can have on the environment,” said Mike Rombach, vice president of Green Mountain Energy. “By eliminating our ability to market our products to Maryland residents seeking to contribute to a cleaner, greener energy future for America, we are not only limiting consumer choice but also hindering progress toward environmental sustainability and continued investment in renewable energy sources.”

The prohibited and compelled speech provisions contained in SB1 violate the First Amendment to the U.S. Constitution and Article 40 of the Maryland Declaration of Rights. These and other restrictions imposed by SB1 will cause irreparable harm by stifling suppliers’ ability to market their products, thus leading to a loss of business and consumer choice in Maryland’s energy market.

REAL filed the motion for a preliminary injunction in the United States District Court for the District of Maryland, asking the court to provide relief before the new law’s speech restrictions become effective on January 1, 2025.

About REAL

The Retail Energy Advancement League (REAL) is a national advocacy organization dedicated to expanding and modernizing American retail energy markets. Founded by a coalition of forward-thinking companies, REAL believes in giving consumers control over their energy decisions and is committed to driving the transition to a clean energy future. By working closely with regulators and policymakers, REAL promotes smart regulations and consumer protections that foster a healthy market environment, ultimately benefiting both consumers and the clean energy economy.

Learn more about REAL at www.RetailEnergyChoice.org

SOURCE Retail Energy Advancement League