Baltimore formally responds to BGE proposal to only collect utility conduit fees from city residents

Baltimore City has filed a formal response to the Public Service Commission (PSC) that opposes a proposal by Baltimore Gas and Electric (BGE) to impose a surcharge on conduit infrastructure fees that only applies to city residents. 

The move comes weeks after BGE filed a request with the PSC to "protect" its customers in surrounding counties from additional costs resulting from Baltimore City's decision to increase its utility conduit fees. 

BGE says its proposal would shield customers outside of Baltimore City from paying costs associated with the Baltimore-owned conduit system. An estimated surcharge of around $9 per month would be added to the bills of Baltimore City electric customers beginning January 1, 2027, but would not apply    

In announcing its response, Baltimore City said in a statement that BGE's proposal for a surcharge on Baltimore residents would be "effectively raising city residents' utility bills above those of the rest of BGE's customer base." 

The city said BGE only requested an increase in fees after the Board of Estimates approved an updated cost for all users of Baltimore's underground conduit system, including BGE. It said BGE's proposal "is a clear attempt to retaliate by targeting Baltimore ratepayers, before they even experience any financial impact from the change," said the city's statement. 

Baltimore's mayor says surcharge comes as families struggle

"It is unconscionable that BGE is targeting Baltimoreans with this surcharge at a moment when families are struggling with higher costs across the board," said Baltimore Mayor Brandon Scott. 

"Residents will be able to see this for what it is: an unprecedented, unnecessary money grab by BGE and a thinly-veiled attempt to blame city government. We will use every tool at our disposal to fight this proposal and hold BGE accountable for their efforts to pass on every penny of costs to their consumers," Scott added.

In a statement issued on Wednesday, the utility provider said: "BGE's priority has always been keeping costs as low as possible for our customers. Baltimore City leaders walked away from an agreement that saved customers money and improved the city-owned conduit system, choosing instead to increase fees on customers by 84% without justification. The city can still reverse that decision and put customers first."

Last month, BGE said Baltimore City had collected nearly $375 million since 2016 and was planning to raise its new conduit fees by 84%. Baltimore officials have "not been transparent about where that money went, how customers benefited, and why an increase is justified," the utility provided added.

Baltimore's planned conduit increases will serve as "a customer-funded city infrastructure tax" that would eventually be recovered through electric bills, said BGE. This would result in "burdening all BGE electric customers with nearly $50 million in new costs next year alone."

Agreement calls for $120 million in improvements over four years

Baltimore City's century-old network of underground conduits -- which houses electrical, telecommunications and fiber-optic cables -- is set to be solely updated by the city beginning at the end of 2026. The city's conduit agreement with BGE calls for $120 million of capital improvements over the course of four years.  

"With no direct connection to the customer-driven reliability needs, infrastructure priorities, or operational requirements of the electric distribution system, the city's conduit fee increase ought not be paid by BGE customers outside Baltimore City," said the BGE statement. 

Baltimore owns the underground conduit system it is raising fees on, making the city responsible for managing, maintaining, inspecting and improving it. "City law requires underground electric facilities in Baltimore to be placed in the city-owned conduit system, leaving BGE with no alternative but to use the infrastructure," BGE said.   

"This is a matter of doing what's equitable for our customers. BGE cannot support requiring families and businesses outside the city to pay for a revenue increase imposed by Baltimore City," said Tamla Olivier, president and CEO of BGE. "Customers across central Maryland are already concerned about affordability, and our filing ensures that those costs remain where the city's decision was made."