The cost of utilities in Maryland has skyrocketed since 2010, according to a report released in June by Maryland’s Office of People’s Counsel. Baltimore Gas and Electric Co.’s gas delivery rates have more than tripled since 2010, with statewide utility rates following suit.
“Customers of most of Maryland’s largest utilities are facing staggering levels of cost increases for the delivery of their electricity and gas,” said Maryland People’s Counsel David S. Lapp in a news release Tuesday. “These increases reflect a concerted utility effort to boost profits by accelerating capital infrastructure spending — including massive spending on gas infrastructure that is at odds with State efforts to fight climate change.”
The report from the office that protects Marylanders from unfair utility sales practices focuses on the amounts utility companies charge their customers for delivering electricity and gas to their homes, which is included on customers’ bills. Bills also contain supply charges, which include the amount of gas or electricity the customer uses.
However, utility costs are not the same across Maryland. According to the report, Potomac Edison’s rates have risen by less than 1 cent, from 1.7 cents in 2010 to 2.2 cents per kilowatt hour — a measurement of electricity used — today, compared with Pepco’s rates, which have increased by more than 3.5 cents over the same period.
The rates of Washington Gas, an affiliate of Canadian-based AltaGas and Maryland’s second-largest gas utility after BGE, have risen much more slowly than BGE’s. BGE gas delivery rates have more than tripled since 2010 from 26 cents per therm — a measurement of gas use — to 85 cents per therm in 2024, while Washington Gas has a rate of 46 cents per therm, according to the report.
Columbia Gas, an affiliate of Indiana-based NiSource Inc. and Maryland’s third-largest gas utility, has had the highest increase in delivery rates, with costs rising from 30 cents per therm in 2010 to $1 per therm this year.
Asked about the report, Richard Yost, BGE’s director of communications, said in a written statement that: “Customers are becoming more reliant on safe and reliable energy to power their lives and livelihoods while we are also facing increased threats to the resiliency of our infrastructure, including cyber intrusions and more frequent severe weather brought by climate change.
“The energy infrastructure investments we make now will ensure we can continue to meet our customers’ needs and lay the foundation for the State of Maryland to reach its goal of net zero emissions by 2045.”
Yost said customers are benefiting from BGE’s infrastructure investments.
“Since 2011, the number of outages a customer experiences have decreased by 39 percent and the average length of an outage has decreased by 52 minutes,” his statement said. “Hundreds of miles of natural gas pipes are being replaced at an accelerated pace, which results in a safer, more efficient gas system. Once this gas system work is complete greenhouse gas emissions will be reduced by more than 210,000 metric tons annually—the equivalent of taking 45,000 gasoline-powered cars off the road.”
According to the people’s counsel report, increased delivery rates correlate with the state’s increase in spending on infrastructure such as poles, electric wiring and gas pipes.
The Public Service Commission adopted a 2020 multiyear rate plan to cover all utility costs while the 2013 Strategic Infrastructure Development and Enhancement Plan, or STRIDE, law covered the costs of gas pipe replacement work, according to the report.
The STRIDE law encourages companies to replace gas infrastructure by allowing increased rates to recover the money. The multiyear rate plan is an approved schedule of rate changes that helps recover costs for predicted utility spending.
According to the report, customers are paying more for their utilities each year to cover the cost of the replacement work. The OPC recommends ending these state policies while increasing transparency of customer impacts from utility rates and rate filings.
“Highly profitable rate recovery mechanisms are helping drive massive rate increases and imposing significant burdens on customers,” said Lapp, who was appointed by the attorney general to a five-year term, in the news release. “It’s past time to return to the basics of regulating utility monopolies for the public good rather than promoting strategies that place utility investor interests ahead of customer interests.”
