Maryland legislature makes groundbreaking changes to utility regulation, lowering energy costs

Annapolis, MD — On the last day of the legislative session, the Maryland General Assembly passed bipartisan legislation to reform utility regulation in the state, protecting consumers from wasteful utility spending, including mounting methane gas pipeline spending that has caused gas bills to skyrocket in recent years without measurably improving safety. The bill now heads to the Governor’s desk.

Utility regulation components of SB937/HB1035:

• Requires gas pipeline spending under STRIDE and in multi-year rate plans prioritize safety and be cost effective. [Adopting provisions from the Ratepayer Protection Act (SB998/HB0419), which was introduced by Del. Embry and Sen. Mary Washington]
• Directs the Maryland Public Service Commission (PSC) to reject multi-year rate hikes if they do not demonstrate “the customer benefit of the investment,” and prohibits utilities from seeking surcharges for overspending that have functioned as a profit guarantee. 
• Stops utilities from charging ratepayers for some trade association memberships and private planes. [Adopting provisions from the Ratepayer Freedom Act (HB960), which was introduced by Del. Andre Johnson]

The STRIDE program has long been criticized for increasing gas delivery costs and failing to improve safety. Due in large part to STRIDE, BGE gas delivery rates have tripled in the last decade, and gas customers now pay BGE nearly $2 for every $1 they spend on the gas to heat their home. According to the Office of the People’s Counsel, multi-year ratemaking, which began as a pilot program in 2019, has caused electric delivery rates to rise 27% for Delmarva Power customers, 33% for BGE customers, and 38% for Pepco customers. 

In response, consumer, labor, and environmental groups issued the following statements:

“These groundbreaking changes to utility regulation are a massive victory for all Marylanders,” said Emily Scarr, Senior Advisor at Maryland PIRG.“By reining in wasteful spending by BGE and other Maryland utilities, these consumer protections will save Marylanders hundreds of millions of dollars.”

“As their bills continue to rise, working Baltimore residents deserve to know that their BGE payments are going towards infrastructure improvements,” said Ricarra Jones, Political Director for 1199SEIU UHWE in Maryland and Washington DC. “We applaud our state leaders for advancing the Ratepayer Protection Act to ensure that BGE remains accountable to our city’s residents.”

“By prioritizing pipeline safety over gas system expansion, the Ratepayer Protection Act addresses the energy affordability and climate crises,” said Brittany Baker, Maryland Director of the Chesapeake Climate Action Network. “These reforms mean gas pipeline spending will cost less and facilitate the transition to clean energy. These reasonable boundaries to the STRIDE program are a big win for Marylanders.”

“AARP Maryland celebrates the advancement of the Ratepayer Protection Act and other consumer protections because it ensures that any approved infrastructure upgrades are necessary and beneficial and should protect ratepayers from unchecked rate hikes,” concluded Hank Greenberg, AARP Maryland State Director. “This bill strikes a balance between safety and affordability, making it an essential step toward supporting Maryland’s aging population and ensuring that natural gas services remain within reach for all.”

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