Consumer Advocates raise concerns on BGE’s proposed rate hike

Baltimore Gas and Electric (BGE) has proposed rate increases over the next three years. According to the Baltimore Sun, if approved, the average customers’ monthly bill would increase $31.07 after three years.

BGE is Maryland’s largest gas and electric utility and services most of central Maryland. Utilities’ rates are reviewed and approved by Maryland’s Public Service Commission.  This is only the second multi-year rate proposal the PSC has considered for BGE. The PSC will hold public hearings and accept public comment on the multi-year rate proposal later this year.

Utilities’ rates and profits are based largely on the price they charge customers for distribution of power to the home, gas and electric in BGE’s case. The cost of the energy itself is separate from the delivery and is passed on to consumers. Earlier this week, the Office of the People’s Counsel (OPC), which is an independent state agency that advocates for utility customers, released a Consumer’s Guide to the BGE Multi-Year Rate Plan. The OPC Guide argues that:

• The multi-year rate proposal would lead to massive rate increases.
• That multi-year rate proposals reduce utility accountability by shifting risk of utility overspending away from utility investors to customers.
• That BGE spending on gas infrastructure goes beyond promoting the reliability and safety of the system for existing customers.

In addition to infrastructure costs, BGE has proposed a set of electrification costs be included in the rates they charge their customers, allowing them to profit off rebates they offer to customers for new electric appliances such as heat pumps.

The Office of People’s Counsel has called on the Public Service Commission to reject the inclusion of electrification in BGE’s rate case.

“BGE has proposed an electrification strategy that prioritizes the financial interests of its owner, Exelon,” said People’s Counsel David S. Lapp in a statement. “We need a strategy that prioritizes the State’s interests, particularly the interests of utility customers. That strategy needs to be developed in an open and transparent setting where all potential policies are on the table.”

While moving our homes away from gas towards efficient electric appliances and home heating is critical to improve indoor air quality and meet our state’s climate goals, we need to do so in a way that best serves consumers and the public interest. 

You can read more about the rate proposal and OPC’s concerns in the Baltimore Sun.