Proposed legislation by the Maryland Department of the Environment (MDE) would authorize the state to establish building energy use limits by building type and impose fees for failure to comply.
House Bill 49 / Senate Bill 256 is the latest effort by the department to expand the scope of the Building Energy Performance Standards (BEPS) to limit electricity use in buildings.
In 2022, the General Assembly directed MDE to develop energy performance standards that achieve reductions in direct greenhouse gas (GHG) emissions in large, commercial, and multi-family buildings. The regulations developed by the department set numerical limits on direct GHG emissions from buildings but also on overall Energy Use Intensity. EUI is a measurement of how much energy a building uses per square foot.
In 2024, the Maryland General Assembly required that MDE remove the EUI limits from the final version of the BEPS regulations. Budget language that year barred MDE from developing an EUI regulation until it benchmarked building GHG emissions and completed studies on the costs and feasibility of EUI regulations, as well as an analysis of alternatives to EUI. The budget language directed MDE to include in its report, an alternative compliance fee for EUI. That report has not been completed.
Adoption of EUI would regulate buildings that have no GHG emissions and expand regulation beyond the fuels used in a building to how much energy is used. MDE’s analysis estimated that compliance with EUI regulations will cost building owners $8.8 billion before accounting for borrowing costs and other factors.
The energy use limits published in the final draft regulations combined with informally proposed penalties of 8.5 cents per thousand BTUs above the EUI limits suggest the regulation could result in massive annual fines beginning in 2030.
Analysis of building energy use data reported to Montgomery County indicates $24.5 million in fines could be assessed on office buildings in 2030 with 57 buildings facing fines of $100,000 or more. The same analysis indicates that 139 multi-family buildings in Montgomery County face the potential of fines of $100,000 or more in 2030.