Maryland’s First Storage Capacity Awards: What Round 1 Tells Round 2 Bidders

440 MW selected. Two projects. One clear lesson for developers: revenue certainty helps, but it is only the beginning.

On October 1, 2026, the Maryland Public Service Commission conditionally selected two four-hour storage projects for Energy Storage Capacity Credits under the Next Generation Energy Act. Together, the projects represent 440 MW of potential storage capacity—55% of Maryland’s 800 MW Round 1 target.

Key points:

• Benefit: each selected project is eligible for an Energy Storage Capacity Credit (ESCC), a flat price for 15 years that hedges against PJM capacity-market price uncertainty. Lenders can size debt against that contract-backed revenue, which is why developers bid.

• Cost: about 7 cents per month for a typical Maryland residential customer, both projects combined.

• Buyers: electricity suppliers, not a single utility such as Pepco or BGE, buy the credits, according to the Maryland General Assembly’s fiscal note for SB 937. Electric companies can recover the costs through a surcharge on customer bills.

• Meaning for the projects: selection sets a revenue base for financing. Interconnection cost and timing remain open, and construction approval is still ahead.

• Round 2: the Act requires the Commission to issue a second 800 MW solicitation by January 1, 2027. Round 1 left 360 MW of its 800 MW target unfilled.

What Maryland selected

Project	Capacity	Location	Round 1 outcome
Chalk Point Storage	400 MW	Prince George’s County	Conditionally selected
Jade Meadow III	40 MW	Garrett County	Conditionally selected
Oystercatcher	500 MW	Harford County	Not selected; invited to Round 2
Chalk Point expansion	535 MW proposal	Prince George’s County	Not accepted in Round 1; may be submitted in Round 2

Chalk Point would be located at the existing Chalk Point plant site. Jade Meadow III is a 40 MW battery on a reclaimed coal mine in Garrett County. The Commission describes it as a combined solar-and-storage facility. The 300 MW solar project at the site has its own certificate case (No. 9769), and the credit award covers the 40 MW battery. The Commission declined Chalk Point’s request to increase from 400 MW to 535 MW because the larger size was offered after the application window closed. 

The Commission estimates the combined cost of both projects at about 7 cents per month (6.98 cents) for a typical Maryland residential customer. That is a per-customer charge, roughly 84 cents a year for each customer, and a statewide total would multiply it by the number of customers. mGrid reports that the figure is on a levelized basis and that the Commission’s order lists the ESCC price and total ESCC payments as non-public. 

The selections are also not approval to build. Both projects must still apply for construction approval, with public hearings addressing safety, siting, environmental impacts, and related issues. 

Why contract-backed revenue matters 

A battery may have several potential revenue sources, including energy arbitrage, ancillary services, and capacity-related revenues. But if too much of the project’s cash flow depends on future market prices, debt sizing and equity underwriting become more difficult. 

California offers a useful comparison, although its market structure differs from Maryland’s. In a September 17, 2026 interview, esVolta CEO Randolph Mann said resource-adequacy contracts alone were not sufficient to support full project economics, leading developers to pursue tolling-type contracts that provide more predictable revenue over the contract term. 

An award is not a project 

A conditional award is a financing milestone. Two concepts shape a Round 2 framework. 

Revenue certainty. The ESCC gives a project contract-backed revenue for its debt-service coverage ratio (DSCR). A Round 2 proposal should weigh the return of capital, meaning debt repayment, and the return on capital, meaning equity yield, and test how much the ESCC supports each, alongside any federal, state, or utility programs the project can stack with it. 

Interconnection sensitivity. Interconnection cost and timing are a major unknown for utility-scale projects. They should be run as sensitivities, particularly in congested corridors, where network upgrades can move both. 

Modo Energy reported an average interconnection cost allocation of $206/kW across 21 battery projects in PJM’s first transition cycle. Five projects faced costs above $400/kW, while four were below $15/kW. The costs consist mainly of physical network and system-reliability upgrades and exclude PJM’s system impact study costs. 

Selected storage must generally be operational within 24 months of selection, according to the fiscal note, so interconnection timing is a direct schedule risk. The Commission’s release describes no interconnection benefit from selection and gives no PJM study status for either project. mGrid reports that Chalk Point sits at an existing plant site cleared for PJM surplus interconnection, and that Pulaski Energy Storage withdrew a 135 MW proposal in Baltimore County after PJM studies produced network-upgrade costs that the Office of People’s Counsel called unaffordable. 

An ESCC is one input in the investment case. For a Round 2 bid, sponsors and lenders still need to assess: 

Issue	What sponsors and lenders assess
Capital costs	Battery supply, EPC, balance of plant, interconnection, construction, and contingency
Revenue durability	Energy arbitrage, ancillary services, capacity revenues, incentives, and market-price exposure
Debt capacity	Debt-service coverage, downside cases, and resilience to cost or schedule changes
Equity returns	Cash-flow timing, incentive eligibility, and distribution capacity
Operating performance	Availability, degradation, round-trip efficiency, augmentation, and warranties
Grid readiness	Interconnection timing, network-upgrade exposure, curtailment risk, and deliverability
Approval risk	Site control, construction approval, permitting, safety and emergency-response planning, and engagement with communities, utilities, emergency services, and local officials

Oystercatcher shows that grid location alone did not secure an award. The project had a desirable grid location and characteristics, but the Commission did not select it in Round 1 because of its ranking and concerns about cost-effectiveness and ratepayer impacts. The Commission also noted the importance of continued local stakeholder engagement and invited the project to participate in Round 2. 

Simcore’s storage work sits at the intersection of revenue-stack modeling, interconnection strategy, and commercial diligence. 

What to watch

• Construction-approval applications and hearing dates for Chalk Point and Jade Meadow III. 

• Whether the 360 MW left unfilled in Round 1 is added to Round 2’s 800 MW. 

• Whether Round 2 establishes rules for changes to project size after the application window closes. 

• Whether Chalk Point and Oystercatcher return, and at what size and cost. 

• How many of the more than 40 storage projects in PJM’s Cycle 1 interconnection process, which Commission Chair Kumar Barve cited, bid into Round 2, and what interconnection costs they carry. 

The takeaway 

Maryland’s first-round selections offer an early signal for BESS developers. Policymakers recognize the importance of having storage as part of the overall supply, transmission, and distribution mix. The Act sets goals for both transmission-connected and distribution-connected storage, and capacity-credit procurement is becoming a more established pathway to meet the evolving needs of the grid. Policy support can improve revenue certainty. The development and financing work required to build a project remains. 

The competitive question is not just whether a project can win an award. It is whether the project can move from conditional selection to construction approval, financial close, and commercial operation.