Clean Energy Procurement

Summary

DGS purchases electricity in de-regulated power markets on behalf of all state agencies. Through an innovative electricity purchasing strategy for larger accounts, DGS hedges for a portion of the future power requirements of state facilities. By locking in rates for a portion of future power needs and purchasing the balance at real-time rates, favorable trends in power prices are exploited to the State's benefit. This strategy is referred to as “Block and Index.” Through these reverse auctions the state avoided costs of $4.7M in fiscal year 2019. The state's renewable portfolio standard requires that at least 30.8% of electricity procured be from renewable energy tier I sources in 2021.

History of Clean Energy Procurement in Maryland

Maryland's Governor issued an executive order on March 13, 2001 calling for at least 6% of the electricity consumed by state-owned facilities to be generated from "green" energy sources, such as wind, solar, landfill gas, and other biomass resources. The order specifies that no more than 50% of the power procured to meet the requirement come from municipal solid waste facilities. Subsequently, in 2009, the state embarked upon an initiative with the University System of Maryland, termed "Clean Energy Horizons," to contract for renewable energy through long-term power purchase agreements with clean energy developers. 

In December 2009, the Maryland Department of General Services (DGS) approved four contracts that are anticipated to eventually supply up to 20% of the electricity needs of state agencies and the university system. The long-term agreements include both electricity and renewable energy credits (RECs), with a stipulation that the facilities come on-line by the end of 2014. The state reportedly intends to allow county, university and municipal partners access to the contracts to make their own renewable electricity purchases. The DGS has also installed renewable energy systems at several state buildings and in October 2011 issued an RFP for up to 10 MW of electricity from animal waste energy facilities (e.g., poultry litter, livestock manure).

In another area, the order calls for a reduction in energy use in state buildings of 10% by 2005 and 15% by 2010, and requires all new energy-using products to carry the ENERGY STAR label or "be in the top 25% of energy-efficiency when labeled products are unavailable." The Executive Order also makes it easier for the State to purchase alternative-fuel and low-emission vehicles for its fleet.