Baltimore leaders call on state regulators to stop BGE's planned rate hikes

Baltimore's city council passed a resolution Monday calling on the Public Service Commission (PSC) to stop BGE's planned 2026 utility rate hikes.

The council unanimously voted on the resolution after residents voiced their concerns at last week's public hearing, arguing their gas and electric bills are unmanageable.

The Public Service Commission, which regulates BGE at the state level, approved these proposed multi-year delivery rate hikes in 2023.

City Council President Zeke Cohen plans to speak with state regulators on the proposed rate hike in a few weeks and wanted to have the full backing of the council before he spoke on behalf of the city.

Cohen said the plan the state negotiated with BGE would allow a pause on the next round of rate hikes which would come this summer.

Last week, the state found massive spending on gas infrastructure upgrades is fueling the hikes. However, the city council said these upgrades shouldn't be made on the backs of ratepayers.

"We are not saying that BGE, or any other utility, should not repair where there are broken pipes," Cohen said. "But what we heard in that meeting is that they are responding to their shareholders and not to the ratepayers."

Councilwoman Odette Ramos said the body wanted to act quickly before the next rate increase.

"We want to get that out of the way before those rate increases in the summer," Ramos said.

BGE spokesperson Nick Alexopulos said the energy bill increases scheduled for June are not BGE rate increases but are included in the supply section of the bill in response to the planned retirement of two critical power plants and the fee customers will have to pay to keep the plants operating until transmission lines are built.  

"This has nothing to do with BGE," Alexopulos said in a statement to WJZ where he called Ramos' quote "grossly misleading."

The city council does not regulate BGE, so this resolution won't decrease rates immediately. However, the council can lobby state leaders to make changes.

"It is incumbent on us to come up with some solutions for immediate rate relief. I don't think this is the only solution, I think this part of a slate," Cohen said.

Cohen said he hopes to bring some short-term relief to BGE customers. Long-term solutions to add more energy supply to the state are being discussed in the Maryland General Assembly.

BGE issued a statement to WJZ in response to the council's actions:

"It is important to understand, however, that while some politicians may be trying to attribute higher energy costs to MYPs, eliminating the MYP process does nothing to lower rates or give customers rate relief," Mark Case, BGE's vice president of regulatory policy and strategy. "Instead, it would turn back the clock on the MYP's enhanced transparency and rate predictability which is something customers, lawmakers, and regulators want and many other states have recognized."

Maryland Gov. Wes Moore told WJZ on Monday the General Assembly needs to provide relief to ratepayers, while also addressing long-term structural problems creating low energy supply in the state.

Why have the rates increased?

BGE spokesperson Nick Alexopulos says three key costs go into the overall total of your bill.

The first, according to Alexopulos, is the distribution cost, which is the main part of the bill that goes directly to BGE. That rate is regulated by the Maryland Public Service Commission.

BGE increased their rates on Jan. 1. The utility company increased the average gas bill by 9% and the electric bill by 7%.

But that's just part of the reason why your bill is higher.

Gas customers saw a spike in the supply section of their bill which is the cost of the actual natural gas they used, according to BGE.

"In January of this year, the actual price of natural gas was 30% higher than it was January a year ago, so if you take all of these into account, plus increased usage, it's led to bills that are high," said Alexopulos.

The third component is the increase of costs to "Empower Maryland" set by the state, which funds efficiency programs. 

BGE's customer assistance

BGE said late payment fees will be waived for January, February and March, and suspending disconnections for non-payments for those months.

The utility company said it is extending payment arrangements and reconnecting electric and gas for customers who were previously disconnected due to non-payment.

"We know some BGE customers are struggling to pay their winter energy bills, and we welcome all constructive dialogue on providing customer relief. BGE has taken a number of proactive actions to support our customers including waiving late payment fees, offering flexible payment terms and suspending disconnections," Case said.

Baltimore leaders investigate utility hikes

While BGE stands by its rates and says it offers ways to help customers, like waiving late fees and suspending disconnections for non-payments, that's not enough for Maryland and Baltimore lawmakers.

Baltimore's City Council recently introduced legislation to formally investigate these rising utility costs.

Baltimore City Council President Zeke Cohen highlighted that in 2023, the council adopted a resolution that called on the Public Service Commission (PSC) to reject BGE's multi-year rate plan and argued ratepayers should not have to pay for BGE's gas line replacement project. 

PSC, which regulates BGE at a state level, granted the company the rate case, despite opposition from city leaders. 

"The city council will stand with the ratepayers of this region, not the shareholders of the gas and electric company," Cohen said. "We stand with our people over their profits. We stand with workers, residents, restaurant owners and religious leaders, not a utility that holds a monopoly and has seen record returns." 

Maryland lawmakers take action

A group of Maryland lawmakers proposed legislation to address BGE rate increases.

The Ratepayer Protection Act would require gas companies to prioritize lowering spending on pipelines instead of raising rates for customers by identifying and addressing leaks. 

The bill would change the information required in plans submitted by gas companies to the Public Service Commission for proposed infrastructure replacement projects. 

Under the proposed bill, plans would need to show that the gas company prioritized projects based on cost-effectiveness and risk to the public. 

Plans would further need to include an analysis that compares the cost of the project with alternatives and a plan to notify customers impacted by the project at least two years before construction, allowing them a chance to switch to electric. 

BGE's gas delivery rates have more than tripled since 2010, according to the Office of the People's Counsel (OPC). The company's profits have also more than tripled from $147 million in 2010 to $485 million in 2023, according to the OPC.