Final Report Concerning the Maryland Renewable Portfolio Standard I TABLE of CONTENTS Page Preface

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Final Report Concerning the Maryland Renewable Portfolio Standard I TABLE of CONTENTS Page Preface ACKNOWLEDGMENTS This report was prepared by Exeter Associates, Inc., in coordination with the Power Plant Research Program (PPRP) of the Maryland Department of Natural Resources (DNR). Kevin Porter of Exeter Associates, Inc. was the project manager. Mr. Porter, Matthew Hoyt, and Rebecca Widiss were the primary authors. Important contributions to the report were made by Steven Estomin, Maureen Reno, Cali Clark, Angela Richardson, Peter Hall, Stan Calvert, Jeremy Schein, Stacy Sherwood, William Cotton, Nick DiSanti, and Katherine Fisher. The authors thank the Maryland Department of Natural Resources and the Power Plant Research Program for their support for this project. In particular, the authors thank Bob Sadzinski and David Tancabel. The authors also thank the members of the Maryland Renewable Portfolio Standard Work Group (see Appendix B) for their contributions. The authors also thank the Maryland Public Service Commission, Maryland Energy Administration, Maryland Department of the Environment, Maryland Office of People’s Counsel, PJM Interconnection, National Renewable Energy Laboratory, and Lawrence Berkeley National Laboratory. The Maryland Public Service Commission provided technical feedback in the preparation and accuracy of this report. The Commission takes no position with respect to any of the regulatory or policy options or recommendations presented. __________________________________________________________________________________ Final Report Concerning the Maryland Renewable Portfolio Standard i TABLE OF CONTENTS Page Preface ....................................................................................................................... P-1 Scope of Report ................................................................................................. P-1 Executive Summary .................................................................................................. ES-1 Introduction: Understanding the Maryland RPS ............................................... 1-1 What Is an RPS? ....................................................................................... 1-1 How Does an RPS Work? ........................................................................... 1-2 History of the Maryland RPS ....................................................................... 1-3 Current Maryland RPS ............................................................................... 1-6 Note on Data Sources ............................................................................. 1-10 Effectiveness of the Maryland RPS to Date ...................................................... 2-1 Deployment of Renewable Energy ............................................................... 2-1 Environment .......................................................................................... 2-34 Economic Development ........................................................................... 2-55 Ratepayer Impacts ................................................................................. 2-73 Environmental Justice ............................................................................. 2-87 Influence of Past Changes to the Maryland RPS ......................................... 2-102 Maryland RPS Moving Forward ........................................................................ 3-1 Meeting Existing and Future Targets ............................................................ 3-1 Potential for Renewable Energy Generation in Maryland and PJM ................... 3-12 Impact of the Maryland RPS on Air Emissions ............................................. 3-47 Impact of the Maryland RPS on Jobs and Economic Output ........................... 3-63 Future Ratepayer Impacts in Maryland ..................................................... 3-105 Assessment of Potential Changes to the Maryland RPS ................................... 4-1 External Opportunities and Threats of Relevance to the Maryland RPS .............. 4-2 Maintaining the 50% Tier 1 Requirement ..................................................... 4-5 Adopting a 100% RPS or CES ..................................................................... 4-7 Maintaining the 14.5% Tier 1 Solar Carve-out ............................................... 4-9 Removing Black Liquor as an Eligible Resource ........................................... 4-12 Providing State Support for Energy Storage ................................................ 4-14 Moving Hydro from Tier 2 to Tier 1 ............................................................ 4-17 Requiring Long-Term Contracts ................................................................ 4-19 Creating a Clean Peak Standard ................................................................ 4-21 Lowering the ACP Level ........................................................................... 4-24 Limiting Geographic Eligibility to Within PJM ............................................... 4-26 Implementing Zero-Emission Credits or Procurement Support for Nuclear Power ................................................................................................... 4-27 Excluding Certain Technologies from the Maryland RPS ................................ 4-30 __________________________________________________________________________________ Final Report Concerning the Maryland Renewable Portfolio Standard ii Allowing Tier 1 RECs from Anywhere in the Contiguous United States ............. 4-40 Long-Term Contracts for Renewable Energy .................................................... 5-1 Overview of Long-Term Contracts ............................................................... 5-2 Benefits and Risks of Long-Term Contracts ................................................... 5-3 Qualitative Analysis .................................................................................. 5-5 Quantitative Analysis .............................................................................. 5-12 Impact of Future Conditions ..................................................................... 5-36 Non-RPS Policies to Promote Renewable Energy ............................................. 6-1 Feed-in Tariffs / Premiums ......................................................................... 6-4 Net Metering ............................................................................................ 6-7 Community Solar ...................................................................................... 6-9 Grants .................................................................................................. 6-13 State Loan Programs ............................................................................... 6-18 Renewable Energy Rebates ...................................................................... 6-25 Tax Incentives for Renewable Energy ........................................................ 6-28 Investment Tax Credits ........................................................................... 6-33 Production Tax Credits ............................................................................ 6-36 System Benefits Charges ......................................................................... 6-38 Integrated Resource Plans/Distribution System Plans ................................... 6-41 Performance-Based Regulation ................................................................. 6-45 Emerging Issues .............................................................................................. 7-1 System Flexibility and Energy Storage ......................................................... 7-1 Land Use ............................................................................................... 7-13 State-Level Subsidies for Nuclear Energy ................................................... 7-19 Appendix A. Maryland RPS Assessment – Final Report Analysis Topics ............................... A-1 Appendix B. Maryland RPS Work Group Members ............................................................ B-1 Appendix C. Academic Research on the Impacts of State RPS Policies on Economic Development ........................................................................................... C-1 Appendix D. Recent History of REC and SREC Prices (Interim Report) ............................... D-1 Appendix E. RPS Compliance Costs in Maryland and PJM .................................................. E-1 Appendix F. Assumptions for the Interim Report ............................................................. F-1 Appendix G. Potentially Available Resources in the PJM Generation Interconnection Queue... G-1 Appendix H. Biopower Technical Potential Projections by Feedstock ...................................H-1 Appendix I. Clean Peak Standard Implementation .......................................................... I-1 Appendix J. 2014 PJM Renewable Integration Study – Summary and Assessment ............... J-1 Appendix K. Glossary .................................................................................................. K-1 Appendix L. List of Acronyms ....................................................................................... L-1 __________________________________________________________________________________ Final Report Concerning the Maryland Renewable Portfolio Standard iii LIST OF TABLES Page Table P-1. Location of Analysis Addressing Key Maryland RPS Final Report Topics .............. P-3 Table ES-1. Operating RPS Registered Projects in Maryland >1 MW,
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