Statement: Governor Moore signs groundbreaking “pro-consumer” changes to utility regulation

Annapolis, MD —Governor Moore signed bipartisan legislation to reform utility regulation in the state, protecting consumers from wasteful utility spending, including methane gas pipeline spending that has caused gas bills to skyrocket in recent years without demonstrably improving safety.

The new law adopts provisions of the Ratepayer Protection Act (SB998/HB0419), introduced by Del. Elizabeth Embry and Sen. Mary Washington, revising the STRIDE law to require that gas pipeline spending prioritize safety and be cost effective.

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.

In May, utility regulators at the Maryland Public Service Commission (PSC) launched a full investigation into BGE gas system safety after a report from the PSC’s engineering department raised concerns that BGE mismanagement led to increased risk of gas pipeline explosions.

In addition, the new law directs the PSC to only authorize multi-year rate hikes if they demonstrate “the customer benefit of the investment,” and prohibits utilities from seeking surcharges for overspending that have functioned as a profit guarantee. According to the Office of the People’s Counsel, multi-year ratemaking, which began as a pilot program in 2019, has been a key factor in electric delivery rates rising 27% for Delmarva Power customers, 33% for BGE customers, and 38% for Pepco customers.

The new law also stops utilities from charging ratepayers for some trade association memberships and use of private planes, adopting provisions from the Ratepayer Freedom Act (HB960), which was introduced by Del. Andre Johnson.

In response, Maryland PIRG Senior Advisor Emily Scarr released the following statement:

“We applaud Gov. Moore and the legislature for making groundbreaking pro-consumer changes to utility regulation. By prioritizing safety over gas system expansion and reining in wasteful spending by BGE and other Maryland utilities, this new law can save Marylanders hundreds of millions of dollars.

“We have long argued that BGE’s ‘Operation Pipeline’ gas pipeline replacement program has prioritized spending that drives profits over more cost effective safety investments. The PSC’s investigation into BGE’s inspections for contractor work on gas pipelines exacerbates these concerns. It is time for BGE to pause “Operation Pipeline” until the company can fully demonstrate the program is prioritizing safety and is cost effective.”

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