A Maryland Public Service Commission judge approved a settlement agreement Thursday that would increase rates for residential Baltimore Gas and Electric customers for the fourth time in four years.
For the average customer with both electric and gas service, the hike would add about $4 to their monthly bills — a significantly smaller increase than the utility sought earlier this year.
The new rates will take effect in the middle of this month, though the PSC commissioners still must review the agreement before the order is final on Dec. 12.
"We know that every dollar of increase can have an impact, particularly for households of fixed or low incomes," said Paula Carmody, who heads the Maryland Office of People's Counsel, an agency that represents residential utility customers and is a party to the settlement. "But in this instance, we had a full evaluation of the company's documents and data in front of us and believe that this was a reasonable settlement in light of all the information."
BGE has not used a settlement agreement — in this case signed by BGE, PSC staff and other stakeholders — for a rate hike request in at least three decades, utility officials have said. The agreement, which was filed in October, represented a hike that was less than a third of what the utility sought in July.
BGE, Maryland's largest utility provider with more than 1.2 million electric and 655,000 gas customers, is in the midst of a multiyear upgrade to its infrastructure that it says will reduce the frequency and length of power outages. It is allowed by law to recoup its costs through rate increases. The utility provider said it has invested $3 billion in infrastructure upgrades in the last five years and plans to invest $3 billion more through 2018.
BGE officials have not ruled out the possibility that they will seek another rate increase next year. The utility has argued that because electricity and gas commodity costs have fallen in recent years and because it has launched new programs to increase energy efficiency, customers' bills have decreased despite the rate hikes.
The average residential electric consumer, with a monthly bill of about $135 a month, would pay an additional 96 cents a month. The average residential gas consumer, with a bill of about $71 a month, would see an increase of $3.41. Customers with both services would pay less than the sum of the two increases, about $4 a month.
In July, BGE requested a hike in rates that would have added about $6.50 to the average residential electric bill and about $8.50 to the average residential gas bill, or about $15 a month for customers getting both services.
Terry J. Romine, the chief public utility law judge for the PSC, wrote in approving the settlement that she found the increases "reasonable" and that approval was "in the public interest."
The order will become final Dec. 12 unless any party files an appeal, but Carmody said such an appeal was unlikely because the parties had already found agreement in the settlement proposal.