BGE asks state regulator to "protect" utility customers outside Baltimore City from conduit fee increase

Baltimore Gas and Electric (BGE) said Tuesday it had filed a request with Maryland's Public Service Commission (PSC) to "protect" its customers in surrounding counties from additional costs resulting from Baltimore City's decision to increase utility conduit fees.

Baltimore has collected nearly $375 million since 2016 and is planning to raise its new conduit fees by 84%, said a news release issued by BGE. 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, BGE said. 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.  

BGE says the proposal it is submitting to the PSC 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. 

"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. 

City responds to BGE

The following joint statement was issued on Tuesday by Baltimore Brandon M. Scott, Council President Zeke Cohen, and Comptroller Bill Henry: 

"News of BGE's attempt to avoid paying its fair share of the cost to maintain the city's underground conduit system is disappointing but unsurprising. Worse, they are asking the Public Service Commission to approve an unprecedented surcharge that would apply to only Baltimore City residents. Notably, BGE claimed at the Board of Estimates in August that Public Service Commission staff suggested such a surcharge, but the council president's letter requesting evidence to support this assertion received no response. The mayor, council president, comptroller, and members of the city council demand that the commission reject this illegal and unprecedented request from BGE and fulfill their responsibility to the people of Baltimore City, to protect them from corporate overreach."

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."