Baltimore Gas and Electric Co. asked Friday for another rate increase, three months after winning approval for higher charges, and company officials said they expect to seek more in the future.
It's the third time in as many years that BGE has requested higher distribution rates. If approved, the typical residential customer getting both electricity and gas would pay about $72 more a year for distribution.
Company officials said they expect to ask for frequent rate increases as they seek reimbursement for more aggressive tree-trimming, infrastructure upgrades and other work aimed at improving service.
"This phase that we're in of significantly investing in reliability, it's not sort of a 'two-year effort and then finish' kind of thing," said Mark D. Case, BGE's vice president of strategy and regulatory affairs. "This is a long-term cycle."
BGE said its request — which should be decided by state regulators in December — would add $4.41 per month to the typical residential electric customer's bill and $2.50 per month to the typical residential gas bill. Customers who receive both services would pay about $6 extra in total distribution charges, the company said.
That increase would come on top of higher distribution rates from the last two cases that add up to nearly $4 a month on typical residential electric bills and about $4.80 on typical residential gas bills, BGE said.
In addition, BGE asked Friday to add a monthly surcharge on electric bills for five years to accelerate outage-reduction improvements, a move it called consistent with recommendations by Gov. Martin O'Malley's utility task force in the aftermath of last June's damaging derecho windstorm. Typical residential customers would pay about 34 cents a month in the first year, rising to 75 cents by the fifth year, BGE said.
The company said its growing infrastructure expenses in recent years are being offset for customers by generally lower energy costs and improved energy efficiency. If the Maryland Public Service Commission approves the request in full, the typical BGE residential electric bill still would be more than $8 a month cheaper than it was four years ago, the company said.
The monthly gas bill, though, would be more than $5 higher. And the frequent rate increase requests are prompting customer fatigue, particularly after a year that included two major-outage storms.
"Of course I'm not for it," said Noel Levy, co-chairman of the infrastructure committee for the Pikesville-Greenspring Community Coalition. "We just keep paying more, and we get less electricity."
Customer advocates said all Marylanders should brace for recurring efforts to raise their rates. Five of the state's major utilities have pending requests for higher charges, according to the Maryland Office of People's Counsel, which represents residential utility customers.
"There's a lot of infrastructure-building going on, so we expect to have a lot of rate cases over the next few years," said Theresa Czarski, the deputy people's counsel.
Count on more requests for surcharges to pay for infrastructure, too. Utilities hope a state law taking effect in June will improve their odds of winning regulatory approval for surcharges on gas customers' bills.
BGE's Case said the utility expects to ask for such a gas surcharge in late summer. The amount — perhaps 25 cents a month — would be used to replace old gas mains made of bare steel or cast iron.
Utilities argue that surcharges allow them to accelerate the pace of work because they would start collecting money as the work begins, rather than after the fact. Maryland's regulators have only allowed utilities to seek rate increases for infrastructure work already performed.
But surcharges drive customer advocates crazy. Charles Acquard, executive director of the Silver Spring-based National Association of State Utility Consumer Advocates, called the charges a "beeline directly into the pockets of consumers" because they don't receive the same level of regulatory scrutiny as rates.
"That's why utilities are after them," he said.
Companies are asking for more surcharges — and rate hikes, too — across the country, Acquard added. Aging infrastructure is one driver of the trend.
BGE said it is seeing results from the past few years of work, such as tree trimming and burying power lines. Outages in all conditions except the most severe storms were down 20 percent in both number and length last year, compared with 2010, Case said.
Of course, the most severe storms produce the worst outages. The derecho and superstorm Sandy fell into that category last year, the former hitting with little advance warning and leaving some BGE customers without air conditioning for eight sweltering days.