Maryland Utility Rates Rise Despite New Cost-Saving Laws

Pepco and Washington Gas rates increased by $4 per month. The Public Service Commission approved these hikes. This occurred despite new state legislation aimed at lowering bills. The Utility RELIEF Act passed earlier this year. It included measures to cut energy costs. Gas customers stopped paying the EmPOWER surcharge in August. Electric customers will see a $9 monthly savings next year. These changes offset part of the rate increases.

Regulators reduced Pepco’s initial 23% increase request. The company dropped $8.6 million from its ask. This change followed a rule pausing forecast test years. Utilities must now base requests on historic spending. Niki Wiggins, PSC Director of Legislative Affairs, noted the increase stays below inflation. The commission is currently reviewing BGE and Potomac Edison requests. Both seek hikes of about $8 per month. A decision is expected in January.

Utilities Challenge RTO Membership Rules

Maryland law requires utilities to join the PJM RTO. This mandate removes a voluntary 0.5% return on equity incentive. The savings amount to $20 million annually for ratepayers. Utility companies refused to drop the RTO adder voluntarily. State agencies filed a complaint with FERC. Three Exelon utilities and four others moved to dismiss the case. Maryland agencies responded on September 3. They await a federal decision.

Ohio passed a similar law removing the RTO adder. Utilities fought the rule in appellate courts. The court upheld Ohio’s authority to require RTO membership. It revoked the voluntary equity incentive. David Lapp, Maryland People’s Counsel, expects a similar outcome here. He warns the process may take years. The state agencies are pursuing this litigation despite resource costs. The goal is to secure permanent rate reductions.

Regulatory Actions Limit Utility Revenue

Regulators are implementing large load tariffs for data centers. This measure targets high-volume energy users. It limits how utilities charge ratepayers for executive compensation. These rules aim to align costs with actual usage. The PSC is enforcing these new standards. They are part of a broader effort to control costs. Utilities are adapting their billing structures accordingly.

Consumer advocates are monitoring the BGE rate case. Baltimore City officials joined the campaign against the hike. State lawmakers are also involved in the opposition. The PSC will issue its final decision in January. This timeline allows for public comment and review. The outcome will set a precedent for other utilities. It reflects the balance between investor returns and affordability.

State Agencies Pursue Federal Litigation

The Maryland Energy Administration leads the FERC complaint. The PSC and Office of People’s Counsel support the effort. They argue the RTO adder violates state law. Utilities claim the incentive compensates for risk. The federal court must decide this conflict. The process is resource-intensive for state agencies. They continue to press their legal case forward.

Source: GN markets/energy (en-US). The situation illustrates the tension between regulation and market forces. Ratepayers face mixed results from recent legislation. Some costs drop, while others rise. The legal battle over the RTO adder remains unresolved. It could impact bills for years to come. Utilities continue to seek higher returns. Regulators push back to protect consumers.