Dive Brief:

• The Maryland Public Service Commission last week approved one of the most aggressive energy efficiency targets in the nation, requiring utilities to cut retail sales by 2% each year.
• Environmentalists praised the goal, calling it a “huge step” on climate change and air pollution issues.
• Utilities had a more tepid response, with Baltimore Gas & Electric saying the new goal would be “challenging” to achieve.

Dive Insight:

Maryland utiltiies had submitted efficiency plans to regulators planning to cut power usage from 0.7% to 1.7% per year, but regulators decided to expand the Empower Maryland program, upping conservation targets to 2% per year.

While utility officials say they welcome the new mandates, their response was more measured than that of many environmentalists.  Baltimore Gas & Electric told the Baltimore Sun the new mandates will be “challenging to achieve,” and WAMU didn't get a response from other utilities it asked about the decision.

Environmentalists, however, were quick to praise the new rules, which are among the most aggressive in the nation. Only Rhode Island and Massachusetts achieved more than 2% savings last year, according to the Chesapeake Climate Action Network, which also said the new goals place Maryland in the top five efficiency targets in the country.

“The state of Maryland has just taken a huge step in showing that action on air pollution and climate change can go hand in hand with consumer savings,” Mike Tidwell, director of the CCAN, said in a statement. “The PSC deserves praise for hearing the public’s voice that efficiency is a win-win. We now hope other states will follow suit at this same high level.”

CCAN said the new rules would require utilities to save over 1.2 million MWh annually, or about the same as closing a 460 MW coal-fired plant every two years.

The commission also decided to extend the EmPOWER Maryland efficiency program to all gas companies, which CCAN said is “a potential game-changer for energy usage and greenhouse gas emissions.” Specific goals for gas companies were not established, however.

According to the American Council on an Energy Efficiency Economy, the new efficiency targets are the highest in the nation when measured on the basis of yearly mandated reductions. While strategies for measuring and mandating efficiency vary from state to state, no other state requires an annual 2% reduction in retail sales.