Customers Speak Out Against BGE’s Proposed $602.4 Million Multi-Year Rate Hike

BALTIMORE – Community members, consumer advocates, environmental groups and organized labor gathered before the Public Service Commission’s (PSC) final public hearing on Baltimore Gas and Electric’s (BGE) proposed $602.4 million multi-year rate hike. BGE is a state granted monopoly with no market competition, so their rates are reviewed and approved by the PSC.  The coalition called on the PSC to reject BGE’s proposed multi-year rate hike. 

According to analysis by the Office of the People’s Counsel, an independent state agency charged with protecting consumers, BGE’s customers would pay an average of $810 more per year on gas and electric bills if the PSC approves the proposal as submitted.  Advocates are worried this will exacerbate cost burdens for consumers who have nowhere else to turn for their gas and electric needs and are already struggling with disconnections.

“I’m concerned for people on fixed incomes, retirees, and people who are low income. How are they going to be able to pay for these increases?” asked Holly Ward, a member of 1199SEIU United Healthcare Workers East MD/DC. “It’s already hard for them to pay now, and if BGE increases rates, there will be a lot of people without lights and gas because they can’t afford their bills.”

BGE’s proposal is only the second time the company has asked for a multi-year rate hike. The first was approved in 2020 under a pilot program that has yet to be evaluated by the PSC. Consumer advocates are concerned that the financing model of the multi-year plan incentivizes excessive spending, leads to excessive profits and lacks adequate oversight from the PSC. In their August filings to the United States Securities and Exchange Commission, Exelon, BGE’s parent company, credits the multi-year plan for an increase in BGE profits (page 8).

“Enough is enough. It’s time to hold BGE accountable and stop the endless rate hikes to fund their gas replacement program and pad their profits, ” said Emily Scarr, Director of Maryland PIRG Foundation, “The Maryland Public Service Commission should heed the overwhelming opposition voiced tonight, reject a multi-year rate hike, and rein in the out-of-control spending driving up our gas bills.”

According to BGE’s official filing (page 6), a key driver in the rate increase is BGE’s proposed $1.8 billion in spending on new gas infrastructure. BGE’s proposal doubles down on gas infrastructure even as the state intends to turn towards cleaner energy sources. The 2022 Maryland Climate Solutions Now Act directs the state to reduce global-warming emissions by shifting away from fossil fuels to power our homes and buildings. 

“BGE’s outrageous rate hike is driven by the utility’s plans to spend $1.8 billion on new fossil gas infrastructure, despite the urgent need to phase out fossil fuels to avoid climate catastrophe,” said Taylor Smith-Hams, US Senior Organizer with 350.org. “We cannot allow BGE to continue to divest from the security and safety of our communities while investing in burning down the planet.”

The advocates warn that BGE’s proposal could lead to outsized profits for the utility’s shareholders and leave gas customers paying off the expense for decades to come.  A recent analysis from the People’s Counsel found that BGE is spending more than $6,000 per home on their gas equipment program, and plans to recover that investment – with profit for its investors – at an average of at least $19,000 per-house.  Consumer advocates worry customers can’t bear the cost.

“We’ve helped nearly 1000 low-income older adults receive tax credits and benefits this year. Utilities are the greatest or second highest expense for the vast majority of our elders,” explained Marceline White, Executive Director of Economic Action Maryland. “BGE’s proposed rate increase will break the budgets of many older adults, forcing them into impossible choices between basic needs like healthcare, groceries, and heating.”

In July, the Baltimore City Council voted to oppose the proposed BGE multi-year rate hike.

“People across Baltimore already struggle to pay their utility bills. We should not foot the bill for BGE’s costly gas line expansion. Especially at a time when utility companies should be pursuing clean energy sources. I am proud to stand with the community, the workers of 1199 SEIU, and with environmental and consumer advocates in calling on the PSC to reject BGE’s proposed multi-year rate hike,” said Baltimore City Councilmember Zeke Cohen.

The PSC is accepting public comments on the proposal until September 29th. The Commission will make a decision in the rate case by the end of the year. 

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