BGE and the old bait-and-switch

In February, BGE made the case to Baltimore City Council that their deal with the city would save ratepayers $50 million in rate increases. Now, it’s becoming more clear how BGE plans to use the deal to benefit their shareholders.

Utility watchdog

November 16, 2023

As BGE explains on their website:

“Conduit work is now a capital improvement effort, which will lessen customer bill impacts. Costs were previously a maintenance fee, which by regulation were required to be directly passed on to our customers. Now BGE will recover the capital contributions in our rates over time, which reduces customer bill impact as opposed to the previous fee model that would have had a significant impact on customer rates.”

The devil, as they say, is in the details. While making the $138 million a capital improvement will cost ratepayers less up front, they’ll pay significantly more over time. According to analysis from the Office of the People’s Counsel, this funding mechanism will lead to customers paying $860 million to cover the utilities rate of return and taxes on the investment.

Ultimately, the matter is up to the Public Service Commission who is reviewing the proposal as part of BGE’s larger multi-year rate hike proposal that, if approved, would increase rates by $604 million over the next 3 years.

But, it appears there could be even more to the story. As reported this week by The Baltimore Banner, The Baltimore Sun, and WYPR, BGE is now refusing to make an internal memo on the financing of the program public.

What’s in the memo? We don’t know. BGE claims making the document public would help their case, but refuses to do so.

Baltimoreans deserve greater transparency from the utility, which has a state granted monopoly. The Public Service Commission should make the document public and we hope they will give tough scrutiny to the financing of the conduit improvements in the rate proposal.