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Baltimore Gas and Electric customers would pay $8.53 more per month under proposed rate increase

Baltimore Gas and Electric Co. has asked the state for an increase to gas and electric rates that would add $8.53 to the average residential customer’s bill.

The utility filed the request to boost its delivery rates Friday afternoon with the Maryland Public Service Commission.

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Under the proposal, BGE is seeking an additional $133 million, which it says reflects the added costs of improvements to boost safety and reliability across its Central Maryland service area.

With the increase, the average electric-only customer’s bill would go up by $3.74, while the average gas-only customer’s bill would rise by $5.27. A combined gas and electric bill would increase by $8.53, slightly less than the combination of both averages.

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“While we know that any proposed increase may be a challenge for some of our customers, we also know that our customers value the high level of service that they have come to expect and deserve, which only comes from continuing the significant investments that we are making in our energy delivery systems,” BGE CEO Calvin G. Butler Jr. said in an announcement Friday.

Baltimore Gas and Electric Co. is proposing a rate increase that would boost the average residential gas and electric customer’s total bill by $5.77 per month and cover costs of replacing aging natural gas pipelines, updating meters and other work.

BGE last requested an increase in its electricity distribution rate in 2015. The utility was granted such an increase for natural gas last year. Higher gas rates took effect in January, boosting the average gas customer’s bill by $5.40.

The proposed increase would represent a 3.2 percent increase for electric-only customers and a 7.3 percent jump for gas-only customers.

But the average total bill under Friday’s proposal still would be 10 percent lower than it was more than a decade ago, BGE said. That’s because commodity prices have declined and people have boosted the energy efficiency of their homes.

The utility said it spent $1.8 billion last year to inspect poles, upgrade overhead circuit routes, replace underground circuits, trim vegetation, inspect, maintain and replace gas mains, make improvements to substations, and take steps to minimize and more quickly restore outages.

It also invested in technology, building infrastructure for electric vehicles and piloting the use of camera-mounted drones to inspect power lines and poles.

BGE’s request will go through a public process, including hearings, led by the PSC, an independent state commission. The utility must file a detailed “cost of services” study with the PSC that spells out the costs associated with the request.

Under state law, utilities are entitled to recover their costs and make a reasonable profit.

A decision is expected by December. As it has in the past, the commission could decide to grant the requested increase or order a smaller rate hike.

Paula M. Carmody, the Maryland People’s Counsel, who is charged with representing the interests of the state’s residential utility customers, did not respond to requests for comment Friday on BGE’s rate request.

But some consumer advocates worried about the impact of a large increase on utility bills.

“We’re very concerned about any measure that increases the burden of utilities, especially for seniors, retirees and other people on fixed incomes,” said Nancy Carr, a spokeswoman for AARP Maryland. “It’s just another burden on their monthly bills.”

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Many of the state AARP’s members already live on tight budgets, said Tammy Bresnahan, the chapter’s director of advocacy. For many, monthly social security income averages $1,400. The proposed BGE increase would amount to about $102 a year.

“When someone gets an increase like that, it makes it hard, especially people on fixed incomes,” she said. “They have to make choices between food and prescription drugs. … Gas and electric is something that people need every day to survive.”

Emily Scarr, director of consumer group Maryland PIRG, said the group will be looking into the details of BGE’s proposal.

“The PSC should not allow BGE to mask unjustified increases in delivery rates because commodity prices are low — consumers should reap the full benefit of lower energy costs and improvements in energy efficiency,” Scarr said.

She also said it’s important for the PSC to consider impacts of climate change when it evaluates investments in gas infrastructure — beyond those improvements need to maintain system safety. As home heating technologies such as electric heat pumps become cost-competitive and consumers find other ways to lessen dependence on fossil fuels, fewer customer will rely on gas as a home heating fuel, Scarr said.

The PSC should take that into account and not allow overly aggressive investments in gas infrastructure, she said.

The utility’s investment in energy efficiency should result in lower costs, but “It’s unclear if it’s being passed on to the consumer,” Scarr said. “The job is to figure out are these rates hikes justified and prudent.”

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