When opportunity comes knocking, you’re not always ready. For the Maryland Public Service Commission (PSC), a new 3 GW energy storage target set by the legislature offered significant potential benefits to the state’s consumers and electricity grid. But the prospect of creating a sweeping new program from whole cloth can be daunting, and in this case a requirement to report progress to the legislature after just a few months – with no added staff – was especially so.

Program design tasks of this scale and speed have been rare for state agencies but the Maryland PSC, like other state commissions, is looking at more such demands as the clean energy transition accelerates. Designing programs like these is our core competency, and we quickly offered to jump in and help. The progress Maryland achieved in such a tight timeframe is noteworthy for other states, as is the process we used to get there. Here’s our report out on a novel approach to regulatory policymaking and what it could mean for you.

What’s the problem?

Simply put, the traditional energy policymaking paradigm isn’t up to today’s demands. It takes too long, it’s too adversarial, and it rarely produces best-case, win-win outcomes for customers, utilities, or energy markets. Many understand this, few know what to do about it, and fewer still feel able to experiment with creative new approaches. The energy regulation arena is as important as any in determining how we accelerate the energy transition in the U.S., and the dysfunction here threatens our decarbonization goals, with global implications.

Here’s a quick recap of how the current process typically plays out. First, the Commission solicits general input and gets barraged by as much unorganized, self-interested commentary as useful input. Then the Commission develops a straw proposal out of a patchwork of competing perspectives that is hard to cohere or legally justify. A lengthy process follows with “workshops,” official hearings, and rounds of written comments akin to legal briefs. Instead of working toward ideal outcomes, the process focuses on adjudicating the lack of consensus. Resulting regulations and government programs reflect the dysfunction of the process that went into them.

Sound familiar? There’s a better way.

“[The EPDI] process will be a best-practice for future regulatory stakeholder processes that all jurisdictions undertake.”

VP Govt Affairs

Clean Energy Industry

Success by design

Maryland offered an ideal (if highly compressed!) opportunity to implement the kind of thoughtful, design-based approach we at EPDI believe is essential for our clean energy future. We started by helping the Maryland Energy Storage Program Workgroup (MESPWG) with the basics of design-thinking.

One of the most important barriers to effective policymaking is that when new ideas and technologies come up, stakeholders don’t share a common language for discussing them. So we built one from the ground up – starting by defining terms as fundamental as “energy storage” and others, such as “virtual power plant,” that the law left undefined. We also tackled program eligibility early on, identifying what kinds of storage resources should be eligible for the program and under what conditions.

Then we guided the Workgroup to look at the big picture. What should we all be working toward? Specifically, what would be the ideal state of Maryland’s energy storage market a decade from now, when all 3 GW have been deployed? We also engaged stakeholders on the basic building blocks of design, by developing consensus design principles, specific to energy storage, that stakeholders could use to justify their ideas and recommendations.

If this sounds like a world away from the conventional adversarial approach, it is. Rather than soliciting a predictable cacophony of self-interested feedback, we helped educate and align stakeholders from the beginning in a collaborative, trust-based environment. The benefits of this approach can extend far beyond any given proceeding and help build a stronger, more collaborative ecosystem for effective policymaking going forward.

Finally, we helped the group brainstorm and prioritize a long list of design questions that must be answered for Maryland’s energy storage program to be successful. Rather than rush toward “the money” by establishing program incentive levels, we built consensus around a solid program structure that could support details to be worked out later. We explained the different policy mechanisms that exist to drive storage deployment and helped stakeholders understand their unique purposes in establishing a robust, durable market. We also established an important core idea: that the program should iterate in parallel with energy storage deployment as the technology landscape and Maryland’s energy system continue to evolve.

Outcomes and next steps

"[The MESPWG] made significant progress in a very short time using EPDI's innovative design approach…and was able to produce an excellent interim report describing key design principles and program architecture considerations in only two months."

Maryland Public Service Commission Staff

On December 15, 2023, just two months after its formation, the Maryland Energy Storage Program Working Group, with EPDI’s assistance, filed a detailed, comprehensive interim report with the Maryland PSC. EPDI was the primary author of the document, which outlined areas of consensus as well as specific questions the Commission could address directly without needing lengthy hearings or adjudication processes.

The report includes an organized list of key program design questions to be addressed. The questions pertain to terminology and eligibility; long-term objectives and priorities; key design principles; program scope and prioritization; program architecture and deployment mechanism; and safety, environmental impact, and community engagement. The details reflect Maryland’s specific needs and circumstances, but the categories are useful for states grappling with a broad range of energy policymaking challenges.

Initially, three PSC staff were charged with facilitating the MESPWG and creating a consensus-based program design, but with only a fraction of their time. EPDI advised PSC Staff throughout the first several months on the design framework, as well as the overall plan for the full year-long development process.

By the end of this first phase, the workgroup’s report reflected input from over 130 stakeholders across industry, industry associations, utilities, ratepayer advocates, and community and environmental justice groups. With the inclusion of best practices from around the country, the interim report gives the PSC a firm foundation on which to continue building Maryland’s energy storage program.