Regulated utilities spend millions on political influence in Maryland

BALTIMORE – Maryland electric and gas utilities’ are spending millions on political influence activities in Maryland according to a white paper released today by Maryland PIRG Foundation. As regulated monopolies, utilities have a unique ability to advance their interests  — higher rates and profits, slowing the transition away from fossil fuels, and locking in profits on the clean energy transition — through public policy. The paper, Politics of Power: Gas and Electric Utilities’ Political Spending in Maryland, tracks direct lobbying by utilities, as well as other activities such as advertising and trade association dues that can be reasonably categorized as intended to shift public opinion and influence decision-makers. 

“Utilities are in a unique position in which regulators and legislators have direct control over how much profit they are authorized to deliver to their shareholders,” explained Maryland PIRG Foundation Director Emily Scarr. “This dynamic makes utilities’ political dealings more vulnerable to corruption or the perception of corruption in the public’s eye. Spending designed to influence the actions of decision-makers must happen with clear guidelines and robust transparency.”

According to Maryland PIRG Foundation, recent high profile scandals in Ohio, Florida, and Illinois are an important reminder of the need for oversight and transparency.

Utilities are at a time of transformation in Maryland. As the state navigates the shift away from fossil-fueled home heating, gas utilities face the potential of partial or full retirement of their system, and electric utilities need to adapt to manage the electrification of transportation and homes. 

The white paper found that utilities collectively spent more than $2 million on lobbying in Maryland during the most recent reporting period. The companies weighed in on more 50 pieces of legislation relating to energy, the environment, decarbonization, decommissioning of power plants, and the implementation of the Climate Solutions Now act, Maryland’s landmark climate transition legislation. More than half of that spending came from Maryland’s largest two utilities, Baltimore Gas and Electric (BGE) and Potomac Electric Power Company (Pepco), which are both subsidiaries of the Exelon Corporation (Exelon). Exelon is a Chicago based publicly-traded holding company with nearly $20 billion in annual revenue.

At the time of release, more than 70 individual lobbyists had registered to lobby on behalf of various utility companies in 2024, 44 of which were registered on behalf of BGE and Pepco.

“The decisions made by our legislators and regulators as they work to meet Maryland’s ambitious climate goals will have real consequences for Marylanders’ health and financial security,” said Scarr. 

The utilities disclosed more than $4 million in general advertising expenditures for the reporting year 2022, and more than $1 million in trade association dues. Expenditures on advertising required to deliver energy to customers can be recovered through rates paid by customers, whereas promotional advertising and political advertising should not. According to the report authors, however, Maryland’s law on this is somewhat murky.

While specific advertising activities undertaken are not disclosed in public filings, the white paper found evidence that some advertising sought to sway regulators, decision makers, and public opinion on decisions before the Maryland Public Service Commission (PSC). The PSC oversees utility companies’ operations and approves the costs they charge their ratepayers as well as the authorized rates of return on their investments. 

• BGE ran sponsored content in the Baltimore Business Journal in support of its recent multi-year rate case filing at the Maryland Public Service Commission. In the sponsored content piece, as at the PSC, BGE argued that new gas infrastructure should be part of an “integrated approach” to climate transition—a cost that would fall to Maryland consumers. 
• Similarly, BGE has purchased at least six pieces of sponsored content in the Baltimore Banner, including a version of the same piece it ran in the Baltimore Business Journal, and a related piece charging that “loud and unaccountable voices claim that natural gas has no role in Maryland’s energy future.”

“Regulated utilities have proven to be a successful means of providing for the public good of reliable, safe, and affordable utility service,” explained Scarr.  “But transparency and vigilant regulation of the utilities is critical to protect the public interest.”

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With public debate around important issues often dominated by special interests pursuing their own narrow agendas, Maryland PIRG Foundation offers an independent voice that works on behalf of the public interest. Maryland PIRG Foundation, a 501(c)(3) organization, works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer meaningful opportunities for civic participation.