Maryland Procures 440 MW Against an 800 MW Battery Goal: What PJM Network Costs Mean for Utility-Scale Energy Storage

The 440 MW Reality Check in Maryland’s 1.6 GW Storage Mandate

When Maryland lawmakers passed the Next Generation Energy Act in 2025, they aimed to turn the state into an anchor for utility-scale battery energy storage system (BESS) deployment in the Mid-Atlantic. The legislation mandated at least two competitive procurement cycles to secure 1,600 megawatts (MW) of front-of-the-meter, transmission-connected storage, requiring every winning project to deliver full rated power for at least four continuous hours. For the initial round, regulators set an ambitious target of 800 MW to cushion commercial ratepayers and households against historic capacity price spikes across the PJM Interconnection grid.

On October 1, 2026, the Maryland Public Service Commission (PSC) closed Round 1 with Order No. 92667, selecting just two projects totaling 440 MW and 1,760 megawatt-hours (MWh). The procurement closed at 55% of its statutory volume target.

The shortfall highlights a major rift in modern grid operations. While state energy policies demand round-the-clock decarbonization and rapid battery deployment, regional transmission operators are running into strict grid hardware constraints. PJM Interconnection, the regional transmission organization (RTO) serving 65 million people across 13 states and Washington, D.C., is navigating severe supply shortages. Regional capacity auction prices have repeatedly hit the market ceiling of $325 per megawatt-day ($/MW-day), driven by coal plant retirements, rapid electrification, and surging power demand from northern Virginia and central Maryland data centers.

The Maryland PSC designed its Energy Storage Capacity Credit (ESCC) program to counter these price swings. By awarding flat, 15-year contracts to developers, the state provides a steady income floor that makes multi-hundred-million-dollar battery projects bankable. In exchange, Maryland ratepayers receive a hedge against volatile wholesale capacity markets. The PSC calculated that the combined cost of the two selected projects will add only 6.98 cents per month to the average residential electricity bill.

The gap between Maryland’s 800 MW goal and its 440 MW award was not caused by a lack of capital. Instead, it was triggered by unexpected transmission interconnection upgrade fees and local land-use pushback. Out of five formal bids evaluated by state consultant Power Advisory LLC, two qualified developers dropped out entirely after PJM interconnection studies revealed millions of dollars in unbudgeted substation and line reinforcement fees. A third project was rejected because of local community zoning disputes.

What remains is a clear blueprint for utility-scale battery deployment: success no longer hinges on battery cell prices alone, but on securing brownfield interconnection rights at retiring thermal plants and strip mines.

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The Procurement Scorecard: Awarded Projects Versus Stranded Proposals

Evaluating the Round 1 proposals reveals the widening divide between projects that can successfully plug into the grid and those stuck in queue delays. The Maryland PSC conditionally approved Flatiron Energy’s 400 MW Chalk Point Storage Project and REV Renewables’ 40 MW Jade Meadow III Battery Storage Project. Both projects secured flat 15-year ESCC contracts, beating competitors on system location, existing switchyard access, and levelized costs to ratepayers.

To measure ratepayer value and system reliability, the state ranked projects based on capital efficiency, site viability, and network upgrade risks. The table below details the performance, sizing, and eventual fate of all major projects submitted in Round 1.

Project Name	Developer / Sponsor	Rated Power (MW)	Rated Duration / Energy	Proposed Site Location	Interconnection Type	Solicitation Outcome	Core Driver / Regulatory Ruling
Chalk Point Storage	Flatiron Energy	400 MW	4 Hours / 1,600 MWh	Aquasco, Prince George’s County	Existing Thermal Plant Switchyard (NRG)	Conditionally Awarded	Reuses brownfield fossil infrastructure; minimal grid upgrades required.
Jade Meadow III	REV Renewables	40 MW	4 Hours / 160 MWh	Barton, Garrett County	Reclaimed Surface Coal Mine (Western MD)	Conditionally Awarded	Co-located solar/storage hybrid; zero agricultural land conversion friction.
Chalk Point Expansion	Flatiron Energy	135 MW	4 Hours / 540 MWh	Aquasco, Prince George’s County	Adjacent Substation Expansion	Rejected (Round 1)	Submitted after the formal window; invited to re-bid in Round 2.
Oystercatcher Storage	Cardinal Energy Storage East	500 MW	6 Hours / 3,000 MWh	Harford County (Northeast MD)	High-Voltage Bulk Transmission Line	Rejected	Low cost-effectiveness score; Harford County community zoning pushback.
Fourth Quarter BESS	RWE Supply & Trading	300 MW	4 Hours / 1,200 MWh	Dickerson Site, Montgomery County	Retired Baseload Generating Complex	Voluntarily Withdrawn	Siting revisions and corporate project portfolio reallocation.
Pulaski Energy Storage	Pulaski Energy LLC	135 MW	4 Hours / 540 MWh	Baltimore County	Industrial Corridor Transmission Feeder	Voluntarily Withdrawn	Prohibitive PJM network upgrade costs revealed in system impact study.

The operational math behind the awards shows why brownfield sites won out. Flatiron Energy placed its 400 MW Chalk Point facility within NRG’s active and retiring oil- and gas-fired Chalk Point generating station. Because this site already hosted heavy generation for decades, the high-voltage transmission lines, transformers, and physical security perimeters were already built. This setup eliminated the need for PJM to assign multi-million-dollar deep network upgrade fees to the developer.

In contrast, Pulaski Energy Storage had earned high qualitative scores from state reviewers before pulling its 135 MW proposal in Baltimore County. During the formal PJM system impact study phase, grid engineers determined that interconnecting the facility would require massive transmission line rebuilds and transformer replacements. The developer would have had to pay these costs upfront, destroying the project’s financing model.

Similarly, the 500 MW / 3,000 MWh Oystercatcher Energy Storage Project, proposed by Cardinal Energy Storage East, illustrates the growing risk of local permitting battles. While state regulators praised its strategic position on the northeastern Maryland transmission system, they rejected the proposal due to its lower economic score and strong pushback from Harford County officials and residents over battery safety, setbacks, and land use.

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How Interconnection Bottlenecks Impact Enterprise Budgets and Operations

The shortfall in Maryland’s Round 1 auction highlights operational and economic hurdles that extend well beyond state utility commissions. For commercial facility operators, energy procurement leads, and hyperscale data center operators in the Mid-Atlantic, the outcome highlights three major friction points: escalating capacity expenses, prolonged interconnection queues, and firm reliability exposure.

1. Surging Capacity Charges and Operational Power Costs

PJM’s capacity market auctions have created serious balance-sheet volatility for regional power consumers. When the 2025–2026 and 2026–2027 Base Residual Auctions cleared near the statutory cap of $325/MW-day across regional zones, commercial electricity bills jumped significantly. These price spikes hit industrial manufacturing plants, cold storage networks, and computational data centers that run continuous base loads around the clock.

Maryland designed its 15-year Energy Storage Capacity Credit system to mitigate these costs. When wholesale capacity prices surge, the energy produced and capacity cleared by these 440 MW assets returns credits back to the retail rate base, buffering commercial customer bills.

Enterprise Capacity Cost Exposure Model (10 MW Continuous Peak Load)
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Baseline Capacity Price ($/MW-day) : $50.00/MW-day --> $182,500 annual capacity cost
Capped Capacity Price ($/MW-day) : $325.00/MW-day --> $1,186,250 annual capacity cost
Gross Enterprise Difference (OPEX) : +$1,003,750 per 10 MW load per year

Because Round 1 secured only 440 MW of its 800 MW target, the regional capacity deficit remains wider than planned. Commercial power buyers must continue to factor near-ceiling capacity pass-through costs into their budgets until new battery installations clear PJM’s interconnection queue.

2. Lead Time Expansions and Interconnection Upgrades

The withdrawal of Pulaski’s 135 MW project highlights a major issue facing utility-scale energy projects: queue delays. In previous years, an energy storage developer could model battery hardware procurement and secure transmission interconnection rights within a predictable 24-to-36-month window. Today, PJM’s study process often takes anywhere from 48 to 72 months to finalize grid interconnection agreements.

More importantly, developers cannot reliably predict their network upgrade costs until deep into the study cycle. A developer might budget $5 million for an interconnection substation, only to receive an interconnection study demanding $45 million to rebuild upstream transmission circuits.

Because clean energy developers cannot absorb these unexpected costs under a competitive, fixed-price offtake bid, projects fall apart late in development. Enterprise energy planners cannot treat clean energy announcements as guaranteed until developers secure executed Interconnection Construction Service Agreements (ICSAs) without open-ended network upgrade liabilities.

3. Firm Reliability and Peak Shaving Deficits

Maryland has set strict statutory targets: a 100% carbon-free electricity grid by 2035 and net-zero greenhouse gas emissions statewide by 2045. Meanwhile, traditional fossil-fueled peaker plants are retiring faster than replacement clean capacity can connect to the grid.

A four-hour battery system serves a distinct operational purpose: it charges during periods of lower daytime costs and discharges its full output during the four critical hours of peak evening demand. By missing its 800 MW target by 360 MW, the local grid must rely on older, more expensive peaker plants during extreme heatwaves and winter freezes.

For companies running mission-critical facilities, relying on an aging peaker fleet increases brownout risks and capacity price spikes. This operational reality is forcing enterprise power buyers to invest in on-site generation, industrial-scale microgrids, and private battery systems rather than relying solely on the grid.

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Smart Siting: Brownfield Conversions and Mine Reclamations

The Round 1 awards highlight an important shift in utility-scale energy storage development. The winning projects did not compete on cell chemistry or balance-of-plant supply chains. Instead, they succeeded because of their land use and siting strategies.

Chalk Point: Extending the Life of Fossil Fuel Infrastructure

Flatiron Energy’s 400 MW Chalk Point deployment illustrates the practical value of power plant conversion. Sited within NRG’s historic fossil generation hub in Aquasco, Prince George’s County, the project solves several major development hurdles at once:

• Existing Point of Interconnection (POI): The property already hosts heavy 500 kV and 230 kV switchyard equipment built to handle hundreds of megawatts of baseload power. As fossil units wind down, the battery takes over the existing capacity without triggering massive grid upgrade costs.
• Industrial Zoning and Land Buffer: The facility is already zoned for heavy utility use. It sits well back from residential neighborhoods, avoiding the safety and setback disputes that stalled the Oystercatcher project.
• Tax Base Replacement: As traditional thermal plants reduce operations, host communities lose property tax revenue. Repurposing these sites with battery assets protects municipal revenues without industrializing open farmland.

Jade Meadow III: Revitalizing Reclaimed Coal Mines

REV Renewables used an equally effective siting strategy with its 40 MW / 160 MWh Jade Meadow III project in Garrett County. Sited on a reclaimed surface coal mine in western Maryland, the project demonstrates how to deploy clean energy on legacy industrial land:

• Zero Farmland Disruption: Constructing utility-scale batteries on mountainous terrain is challenging, but using previously cleared, contoured mining land avoids clearing forests or repurposing farmland.
• Inflation Reduction Act (IRA) Energy Community Bonuses: The project qualifies as a historic coal community under the federal Inflation Reduction Act. This designation unlocks an extra 10% Investment Tax Credit (ITC) bonus on top of the baseline 30% credit, significantly improving project economics.
• Hybrid Infrastructure Integration: Jade Meadow III pairs battery storage with nearby solar arrays, creating an integrated hybrid asset. This setup allows the system to store peak solar generation during mid-day hours and feed it back to western transmission lines during evening demand peaks.

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A Strategic Playbook for the 2027 Energy Storage Solicitation

Maryland law requires the Public Service Commission to launch Round 2 bidding by January 1, 2027, and finalize awards by October 1, 2027. PSC Chair Kumar Barve noted that this next auction should draw deeper participation, pointing to a pipeline of more than 40 storage projects currently moving through PJM’s reformed “Cycle 1” interconnection review.

To secure capacity awards and achieve commercial operation under PJM’s strict interconnection rules, developers and enterprise power off-takers must execute across three distinct lines of defense.

First Line of Defense: Rigorous Interconnection Audits and Early Withdrawal Thresholds

Developers must move past speculative grid queue filings. The withdrawals of Pulaski (135 MW) and RWE (300 MW) show that high qualitative scores cannot save a project burdened with uneconomic network upgrades.

• Pre-Bid Network Sensitivity Modeling: Run detailed power flow simulations before entering formal state solicitations. If an interconnection point requires replacing remote bulk transformers or reconductoring 20 miles of shared transmission line, project economics will not survive fixed-price state auctions.
• Defined Kill-Criteria: Set strict financial limits on network upgrade fees. When an RTO system impact study shows network upgrade costs higher than $80,000 to $100,000 per megawatt of installed capacity, teams should pivot to alternate sites rather than burning development capital in extended study cycles.
• Focus on Cycle 1 Assets: Focus Round 2 bidding exclusively on projects that have cleared PJM’s reformed cluster study phases. Trying to bid projects that lack completed System Impact Studies (SIS) will only repeat the project dropouts seen in Round 1.

Second Line of Defense: Co-Location and Industrial Brownfield Prioritization

Greenfield development across agricultural and open suburban land faces rising regulatory and community pushback across the Mid-Atlantic. To de-risk project timelines, developers should focus primarily on industrial brownfield properties.

• Retiring Thermal Plant Partnerships: Partner with industrial generation owners like NRG, Constellation, and Talen Energy to acquire development rights inside active or retiring thermal plant switchyards.
• Reclaimed Land and Mine Reclamation: Use former surface mines, capped landfills, and heavy industrial parks across western and central Maryland. These locations bypass agricultural protection laws and qualify for the 10% federal Energy Community tax credit.
• Targeting Re-Bid Expansions: Projects that were turned away in Round 1 strictly due to procedural timing—most notably Flatiron’s 135 MW / 540 MWh Chalk Point expansion—should be prioritized. Because their primary interconnection points are already vetted, these shovel-ready expansions offer the lowest execution risk for Round 2.

Third Line of Defense: Proactive Community Engagement and Safety Pre-Clearance

Cardinal Energy Storage East’s 500 MW Oystercatcher project proved that a strong technical location on the grid means nothing if local county officials oppose the project. Battery developers must secure local buy-in well before submitting formal state applications.

• Early Engagement with Local Regulators: In Maryland, projects that bypass county-level zoning reviews via the PSC’s Certificate of Public Convenience and Necessity (CPCN) process often face fierce local political pushback. Developers must engage county commissioners and planning boards months before state filings.
• Proactive Fire Safety and Hazard Reviews: Address public safety concerns by providing comprehensive UL 9540A fire test data, deflagration management plans, and dedicated training funds for local emergency personnel. Clear educational outreach addressing thermal runaway, water runoff management, and noise mitigation is critical to countering local opposition.
• Host Community Benefit Agreements: Structure binding local community benefits packages. By directing a portion of operational revenues toward local school districts, fire services, and public infrastructure, developers can turn local community boards from project opponents into active project partners.

Maryland’s Round 1 procurement makes one thing clear: hitting ambitious clean energy and battery storage mandates takes more than passing legislation and securing project capital. The developers who win will be those who solve the practical challenges of grid interconnection, industrial brownfield siting, and local community support.