Large energy companies have sued Maryland, asking a federal judge to halt a new state law that imposes limits on their marketing of renewable electricity.

Retail Energy Advancement League, an organization which represents energy corporations, brought the lawsuit, which was filed Tuesday in Baltimore’s U.S. District Court. Its complaint targets a law enacted by Maryland legislators last spring, and which takes effect Jan. 1, changing the way renewable energy companies can market and sell their products in the state.

“For decades, retail energy providers have been able to lawfully market clean energy solutions to residential consumers in Maryland, explaining how their products are better for the environment than the service offered by the local incumbent utility, with benefits like combatting climate change,” the lawsuit says. “But starting on January 1, 2025, a new Maryland law will prohibit these providers from truthfully and accurately describing these products, on pain of civil penalties, unless these providers agree with the government’s views on green energy.”

Democratic State Sen. Malcolm Augustine, sponsor of the bill that became the law targeted by the lawsuit, described the measure in written testimony before legislative committees as “a comprehensive approach to enhancing consumer protection and ensuring the integrity of retail energy supply in the State of Maryland.”

In a phone interview Wednesday, Augustine, of Prince George’s County, said he was “proud of the legislation,” which he expects to help maintain a competitive market for energy in Maryland but with greater guardrails to protect residents. He added that he’s hopeful the law will withstand the energy companies’ legal challenge.

“We consult with our counsel when we’re putting together legislation and feel that the legislation is legal,” Augustine told The Baltimore Sun. “The attorney general will clearly do their best to defend the legislation. I feel good about it.”

The complaint names Democratic Maryland Attorney General Anthony Brown and several members of the Maryland Public Service Commission. Both of those entities have the power to enforce the law targeted by the lawsuit.

A spokesperson for Brown’s office declined to comment.

“The Commission is aware of the court filing, but does not comment on pending litigation,” said Tori Leonard, spokeswoman for the Public Service Commission, in an email.

The complaint says the law created a new definition of “green power” in Maryland, which would require energy companies to change their products.

According to the lawsuit, that’s because the law requires energy companies to source at least 51% of their Renewable Energy Certificates, or hours of solar, hydroelectric or wind power that they pair to sell with traditional electricity sources to make their products more environmentally friendly, from “in or around Maryland” rather than anywhere in the country.

Neither Green Mountain Energy Company or CleanChoice Energy Inc., two companies described in the lawsuit, currently source that amount of Renewable Energy Certificates from the area defined under the law, according to the complaint. But, their lawyers argue, that doesn’t make their products any less “green.”

The new law, the lawsuit says, prevents energy companies “from continuing to describe their products accurately and truthfully as ‘green power’ unless they comply with an onerous speech code that burdens their speech and commerce rights.”

The complaint alleges that those measures amount to violations of the First Amendment and parallel provisions in the state constitution, the Maryland Declaration of Rights.

“The Act’s speech code is a viewpoint-based restriction on speech because it restricts (companies) based on their perspective that their current renewable electricity supply is ‘green power’ even though it does not agree with Maryland’s definition of the term, while permitting ‘green power’ speech from those who agree with Maryland’s views on what qualifies as ‘green power,’” the complaint says.

The energy companies are represented by Wiley Rein LLP, a D.C.-based law firm that specializes in regulatory matters, including First Amendment issues around commercial speech.

When the legislature was considering the bill, the attorney general’s Consumer Protection Division submitted testimony in its favor in March. The attorney general wrote that the bill’s provisions would increase “the chance that consumers are treated fairly and equitably in accordance with their desired preferences for electric choice.”

Several energy companies opposed the legislation, arguing in part that its measures would make Maryland’s energy market less appealing to suppliers, reducing competition in the marketplace and thus likely increasing prices for consumers. They also said the state’s Public Service Commission has ample regulatory power over the industry.

Have a news tip? Contact Alex Mann at amann@baltsun.com and @alex_mann10 on X.

Originally Published: October 2, 2024 at 3:01 p.m.