BGE Proposes 17 Percent Electric Distribution Rate Increase Affecting Parts of Montgomery County

The Maryland Office of People’s Counsel published a consumer guide Tuesday breaking down Baltimore Gas and Electric’s request to raise its electric distribution rates by about 17 percent. The office is an independent state agency that represents residential utility customers, and it says the increase would leave BGE’s distribution rates 58 percent higher than they were in 2020.

The guide arrives four days after regulators finished with the other Exelon utility in the region. On Friday the Public Service Commission approved a $50.9 million increase for Pepco, which serves most of Montgomery County, against the $119.9 million the company had requested. Pepco’s new rates are already in effect; BGE’s case is just beginning.

More on the Pepco decision: the Public Service Commission’s announcement and WTOP.

Who This Affects in Montgomery County

Most of the county is not part of this case. The People’s Counsel says Pepco serves most of Montgomery County and Prince George’s County, while BGE serves parts of Montgomery County along with Baltimore City, Baltimore County, Anne Arundel County, most of Howard, Carroll and Harford counties, and parts of Prince George’s and Calvert counties. The utility named on your bill is the way to tell which case applies to you.

For Montgomery County customers, the commission put that Pepco increase at about 2.25 percent, or roughly $3.94 a month on the average residential bill. Regulators also disallowed about $164.9 million in capital costs tied to White Flint projects, finding the spending was not prudent, and set Pepco’s return on equity at 9.4 percent instead of the 10.5 percent the company sought.

Both utilities are owned by Exelon.

What BGE Is Asking For

BGE wants to collect an additional $156.1 million from customers. That would move the residential electric distribution rate from 4.9 cents per kilowatt-hour to 5.8 cents, and raise the flat monthly customer charge from $10 to $11.

For a household using 900 kilowatt-hours a month, the People’s Counsel puts the increase at about $8.58 a month, or roughly $103 a year. BGE assumes lower average usage, 851 kilowatt-hours, and estimates a smaller impact.

The request covers only the distribution portion of a bill, which is the cost of delivering electricity. Supply and transmission costs pass through separately and are not part of this case. BGE is not asking to raise its gas distribution rates.

What the People’s Counsel Disputes

The guide is the agency’s own reading of BGE’s filing. BGE’s application says the company is focused on “investments that are the most essential to continued safe and reliable service.”

The People’s Counsel argues that several parts of the request are not tied to service needs: raising BGE’s authorized return on equity from 9.5 percent to 10.4 percent, a larger rate base that includes investments the commission rejected in earlier cases, a change in rate design that would shift more cost onto residential customers, and a proposed “storm rider” that would let BGE raise rates automatically when storm costs run above forecast.

The two sides also frame the size differently. BGE says the request would raise the average total residential bill by about 4 percent. The guide argues that measuring against the whole bill understates it, because the case decides only the distribution piece.

How to Comment

The case is docketed at the Public Service Commission as Case No. 9888. Written comments are accepted now, and dates for public comment hearings have not been set. Any increase the commission approves would show up on bills early next year.

• PSC case dashboard for Case No. 9888
• File a public comment with the PSC
• Consumer’s Guide to BGE’s Proposed Electric Rate Increase (PDF)

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The full press release from the Maryland Office of People’s Counsel follows.

BGE’s proposal would increase distribution rates by 17 percent, OPC Consumer’s Guide explains

BALTIMORE – The Office of People’s Counsel released this week a Consumer’s Guide to BGE’s Proposed Electric Rate Increase showing that Baltimore Gas and Electric’s proposed rate hike would increase electric distribution rates for residential customers by roughly 17 percent—from 4.9 cents per kilowatt-hour (kWh) to 5.8 cents per kWh.

BGE’s request to collect an additional $156.1 million from customers would, if approved, push the utility’s electric distribution rates 58 percent higher than they were in 2020 and 129 percent higher since Illinois-based Exelon Corp. acquired BGE in 2012—significantly outpacing inflation, the Consumer’s Guide shows.

“BGE says it is focused on investments that are ‘essential to continued safe and reliable service,’” said People’s Counsel David S. Lapp. “But the rate case includes a request to substantially increase BGE’s profits to levels that far exceed those of companies subject to competition, as well as other requests that raise costs for residential customers without corresponding investments to meet customer needs.”

The Consumer’s Guide illustrates how BGE rates have changed over time and explains the categories of costs at issue in the rate case, the average residential customer bill impact, how utilities generate profits, and how customers can get involved.

“BGE’s requested rate increase continues a long line of nearly consecutive annual rate increases since Exelon’s acquisition of BGE in 2012,” Lapp said. “BGE’s requests might be necessary to meet Exelon’s investor goals of growing returns and profits, but they are causing unnecessary burdens for BGE’s customers.”

The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers in electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies, and the courts.

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