Baltimore City Council President Zeke Cohen holds a bag of postcards he said were written by city residents complaining of high energy bills during a news conference Thursday. (Photo by Christine Condon/Maryland Matters)
The Maryland General Assembly spent countless hours on energy reform this session, and emerged with a package of bills aimed at lowering customer costs.
But bills are still rising — and not only because of summer heatwaves — and a group of Baltimore policymakers and advocates called for more to be done Thursday.
The group, led by Baltimore City Council President Zeke Cohen, gathered outside Baltimore Gas & Electric headquarters and pressed the Maryland Public Service Commission to bring an end to multiyear rate cases, which let utilities apply for several years of rate increases at a time. The plans have “delivered record profits to Exelon shareholders at the expense of hard-working Baltimoreans,” Cohen said, referencing BGE’s parent company.
Del. Elizabeth Embry (D-Baltimore City) said the Next Generation Energy Act, passed this year, gave regulators the tools to address multiyear rate plans and excessive natural gas infrastructure replacements, which she called major contributors to higher bills. The act lets the PSC approve multiyear rate plans only if the utility “demonstrates the customer benefits of the investment.”
“We are now here asking for those tools to be implemented and for the spirit of that legislation to be respected,” Embry said.
A BGE spokesperson pushed back against the notion that multiyear plans were harming customers.
“All of the work we do, we do to benefit customers — full stop,” said BGE’s Nick Alexopulos.
If a utility receives approval on a multiyear rate plan, the new law does not let allow them to file for reconciliation after the fact, which would let them recover additional costs from ratepayers.
The PSC, for its part, is still evaluating the law, which only took effect June 1, and determining how to alter its procedures on multiyear ratemaking, Commission Chairman Fred Hoover said.
Baltimore City Council President Zeke Cohen tries to deliver ratepayer postcards to BGE Thursday. The bag was turned away for security reasons.(Photo by Christine Condon/Maryland Matters)
“Does it make sense to continue this? Does it make sense to continue it, but change it in some way? Or does it just not work?” Hoover said in an interview Thursday.
Before making a decision, the commission is likely to ask all affected parties — including utilities and the Office of People’s Counsel, which represents ratepayers — how they believe the language from the law should be applied, Hoover said.
Alexopulos, argued that Maryland is “not an outlier” among U.S. states because it allows multiyear rate cases, but said the process is fairly new to Maryland.
BGE filed its first multiyear plan in 2020, Alexopulos said. The process allows BGE to consult the PSC, and all other stakeholders, before it incurs costs — and ask for higher rates. Before that, BGE went to the PSC to ask for higher rates after incurring the costs, Alexopulos said.
“So, the multiyear plan the process itself adds transparency that didn’t exist before. And you know what the rates are going to be three years into the future,” he said.
In addition to ending multiyear plans, the group also called on BGE to cancel its 2026 rate distribution increase.
“We’re looking at folks who are deciding between groceries, rent or gas and electricity,” Cohen said. “And so, it is not a sustainable situation.”
Alexopulos argues that those increases fund “critical” upgrades to the system, which promote safe and reliable service. And Hoover said Thursday that the commission can’t intervene to reject that increase.
“We can’t go back and sort of adjust the rates in a retroactive manner,” Hoover said. “What we can do is say: ‘Well, in the future, you have to make this adjustment in what you’re charging.’”
Cohen attempted to deliver a bag of postcards Thursday that he said were from Baltimore ratepayers calling for BGE to end multiyear rate plans amid high bills. But a BGE employee who met him at the door declined the bag, citing security protocols. Alexopulous criticized Cohen for rejecting a meeting with BGE’s new CEO, Tamla Olivier.
“He declined, and instead decided to have a performative press conference about this issue rather than engaging in real conversation,” Alexopulos said of Cohen.
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Cohen said he declined the meeting because he felt it would not be productive unless BGE produced a plan for ratepayer relief.
“I don’t do meetings for meetings’ sake,” he said. “I want to see action from this company.”
At the PSC, just a few blocks from BGE’s downtown Baltimore building, Cohen received a warmer reception. Hoover accepted the bag, and highlighted the commission’s previous orders focused on lowering costs to ratepayers.
In late May, the commission ordered BGE to spread out an upcoming rate increase, caused in part by a historically costly electricity auction at PJM, which runs the electric grid for Maryland and about a dozen other states. The commission’s decision will lessen the impact higher prices this summer — when bills will increase due to high temperatures — and push it into the fall.
The PSC is also in charge of determining how utilities will dole out $200 million in state-funded customer rebates beginning later this summer. In June, Exelon announced $19 million in additional relief for low- and middle-income households, with $15 million going to BGE customers.
Most recently, the PSC changed the rules on extensions of the natural gas system, ordering that customers who request extensions must pay the cost themselves. That way, the rest of the customer base isn’t paying for extensions of a system that could eventually be phased out amid concerns about fossil fuel use and climate change.
It was a concern long voiced by consumer advocates. Hoover said it came down to a basic principle of rate-making.
“The economic principles say that the people that cause the cost are the ones that should bear it. And so that’s what we’ve applied in this situation,” he said.
Hoover said that won’t be the only order issued amid the commissions’ “Future of Gas” proceeding. More could be coming in the weeks ahead, he added.