Background
Maryland deregulated its electricity market in 1999, allowing consumers to choose suppliers. In 2004, the state enacted a renewable energy portfolio standard. Due to the nature of the electric grid, electricity sources cannot be tracked once they enter the grid. To address this, Maryland uses renewable energy credits. In 2024, Maryland passed Senate Bill 1, codified as section seven thousand seven hundred seven of the Public Utility Code, which regulates the marketing of green power. The statute prohibits suppliers from using terms like clean, green, or carbon-free unless the electricity is at least fifty-one percent backed by renewable energy credits from the PJM region. It also requires specific disclosures about renewable energy credits and the source of the electricity.
The court’s reasoning
The court determined that the statute restricts commercial speech by prohibiting suppliers from using descriptive terms for green power unless specific conditions regarding renewable energy credits are met. The court found that the plaintiffs established the requisite factors for a preliminary injunction under the Winter test regarding the speech restriction challenge. The statute’s geographic restriction on renewable energy credits creates a significant burden on speech that is not narrowly tailored to serve the state’s interest in preventing consumer confusion. Regarding the disclosure requirement, the state has since promulgated new disclosure language, necessitating a remand for the district court to review the constitutionality of this newly imposed compelled speech.
Because we find that Plaintiffs have established the requisite preliminary injunction factors as to their speech restriction challenge, we reverse in part.
What it means going forward
Energy suppliers in Maryland may now use green power marketing terms without the previous geographic restrictions on renewable energy credits while the case proceeds, and the state must re-evaluate its new disclosure requirements for constitutionality.
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