‘It’s personal’: Maryland climate groups defend energy dollars amid budget pinch

by Christine Condon, Maryland Matters
February 26, 2026

For years, John Magoon, a lay leader at the Emmanuel United Methodist Church in Laurel, has dreamed of getting solar panels on top of his church, but the cost never penciled out.

He thought a grant from the Maryland Energy Administration’s Strategic Energy Investment Fund — SEIF — might be the solution. But his church was denied amid high demand.

SEIF was created to help cut power bills and lower greenhouse gas emissions, but its exponential growth in recent years has made it a tempting target for appropriators. Last year, the legislature pulled hundreds of millions of dollars from the fund to address the state’s budget woes. And that’s the governor’s proposal again this year.

“When I hear that the governor’s budget is proposing to raid hundreds of millions of dollars in clean energy funds yet again, instead of giving the grants that would make my church’s solar panels possible, I take it personally,” Magoon said Thursday, during testimony before a Senate subcommittee.

Environmental groups are building a campaign this year around protecting SEIF dollars. The Maryland chapter of the Sierra Club has proposed dedicating $88 million from the SEIF to a pilot program to install heat pumps in low-income households, $5 million to induction stoves and another $40 million split between electric school buses and solar projects.

It and other green groups brought personal stories Thursday along with their pitch to a Senate Budget and Taxation Committee subcommittee meeting. One came from Sergine Yango, a Maryland apartment resident who volunteers through the Maryland Just Power Alliance.

“Getting landlords to replace gas for HVAC systems, gas water heaters and gas stoves is extremely difficult. Why? Because, from their perspective, it does not add up financially,” Yango said.

That’s where the SEIF comes in, she said. It can give landlords “a reason to help renters breathe clean air.”

Replacing fossil fuel-burning furnaces and stoves with electric appliances reduces harmful gas emissions in homes. Electric heat pumps are also more efficient, meaning they can cut electric bills throughout the equipment’s lifespan, though they have a higher upfront cost.

After their remarks, subcommittee chair Sen. Shelly Hettleman (D-Baltimore County) asked questions about induction stoves and heat pumps. “Obviously, we have hard decisions to make and a limited amount of funds to be able to attribute to these issues,” Hettleman said.

Gov. Wes Moore’s (D) fiscal 2027 budget would take $292 million from the fund to balance the budget. Another $100 million would be used to give residential energy customers a one-time refund averaging $40 per household.

Moore is also using SEIF funding for a financing program for solar developers, university climate research and other programs. He would leave $164 million in the fund for its traditional uses.

But the governor’s electric bill refund proposal got some sharp words in hearing this week, including from legislators in his own party. Sen. Cheryl Kagan (D-Montgomery), vice chair of the Senate’s Education, Energy and the Environment Committee, repeated criticisms from last year about the universal payment.

“Isn’t there some way that we could make this targeted to folks who need it, would notice it, would appreciate it, and not to wealthy customers who are not going to pay any attention to a modest election year ploy?” Kagan asked.

Administration officials said they would be open to other uses for the $100 million, but that trying to target funds to particular households could increase administrative costs of the proposal.

A similar question was raised by Del. Nick Allen (D-Baltimore County) in a House Environment and Transportation Committee meeting Tuesday.

“I know the one-time credit is a good example of immediate relief, but a lot of people will say that that’s kind of a short-term solution, and it’s not fixing the underlying problem,” he said.

During a Protect the SEIF rally in Annapolis on Thursday, people donned buttons reading “More Energy Efficiency = More Savings. Protect the SEIF,” and engaged in a call-and-response with Chesapeake Climate Action Network lobbyist Jamie DeMarco.

“Don’t use the SEIF … ” DeMarco called, “For budget relief!” the crowd responded.

The fund is fueled largely by “alternative compliance payments” utility companies make in lieu of meeting the state’s increasingly stringent requirements for the share of their portfolios that comes from renewable energy. In recent years, it has been more economical to make the alternative payments, and more expensive to purchase the renewable energy. Utilities pass the cost of the payments onto ratepayers.

In fiscal 2022, utilities made $77 million worth of alternative payments. By fiscal 2025, that had jumped to $365 million. Payments are likely to remain elevated, legislative analysts say, unless more renewable energy comes online.

“My impression is, all the money that’s run up in the account, so to speak, because of the alternative payments, are basically the result of the slow adoption of renewables,” said Sen. Jim Rosapepe (D-Prince George’s and Anne Arundel) during Thursday’s subcommittee meeting.

“So, big picture, what’s one of the — 1,2,3 reasons you think we have such slow adoption?” he asked new Maryland Energy Administration Director Kelly Speakes-Backman.

She pointed to permitting troubles for renewable projects, a loss of federal support under President Donald Trump (R) and a bottleneck at the regional power grid, PJM Interconnection.

“Maryland is not necessarily slower than other states. We do pretty well when compared to other states on renewable adoption,” she said. “Not top of the pack — when you think about California and New York and Massachusetts — but we do pretty well.”

Because the overflowing compliance payments come from ratepayers, Maryland Sierra Club Director Josh Tulkin argues they should go back to ratepayers, through programs that can help them save on bills for years to come — and not to plug budget holes.

“Marylanders fund SEIF. It’s not just money that’s floating out there. Marylanders have showed up here to collect,” Tulkin said at Thursday’s rally.

Maryland Matters is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: editor@marylandmatters.org.