Maryland PSC approves Baltimore Gas and Electric’s multi-year rate plan
Baltimore Gas and Electric Company (BGE) got approval from the Maryland Public Service Commission for its multi-year rate plan.
The commission authorized a rate increase over three years of approximately $408 million, for both gas and electric service. For the first year, the commission authorized the use of federal tax credits to partially offset the rate increases to customers.
The approved rates will result in average year-one bill increases of $4.08 a month for residential electric customers and $10.43 per month for residential gas customers in 2024.
Those average increases decline substantially in subsequent years, to 34 cents a month for electric and $2.80 a month for gas in year three.
Also, the commission approved BGE’s proposed budget of $120 million associated with the new conduit agreement that the company executed with Baltimore City but determined that it would be subject to a future prudence review at the reconciliation stage of this rate case and all future rate cases until the costs are fully recovered. The commission found that the current evidentiary record was unclear as to whether the new conduit agreement will benefit ratepayers or impose significant future burdens. The commission questioned the prudency of the agreement, considering that the company entered into a contract that expires before the end of the decade but expects cost recovery over the next 50 years.
Also, the commission denied the request of the Maryland Office of People’s Counsel (OPC) to reject BGE’s three-year forecasted revenue requirement and terminate the multi-year rate plan construct altogether. OPC had argued that the results so far of the plan demonstrate that it fails to protect consumers and does not serve the public interest beyond benefiting utility shareholders.
Further, the commission rejected BGE’s proposed performance incentive mechanisms (PIMs) to provide rewards or penalties to the company based on achieving (or missing) certain goals, finding that the design and costs of the programs outweighed benefits to customers.
BGE serves 1.3 million residential electric customers and 700,000 natural gas customers in Baltimore City and parts of 10 adjacent Maryland counties.
