More than one million Baltimore Gas and Electric customers have experienced a 50% surge in gas delivery charges since 2020, outpacing inflation by double, according to reports by the Baltimore Sun. This financial strain places affordability at the forefront for Maryland residents as state regulators prepare to decide whether to curb utility infrastructure spending and connection subsidies.
Maryland Public Service Commission Reviews Gas Delivery Charges
The Maryland Public Service Commission holds the authority this October to reduce or eliminate line extension allowances and accelerated cost recovery for pipeline replacements. Under the current line extension allowance program, real estate developers and building owners receive utility subsidies to connect new buildings to the gas system. Existing utility customers fund these projects through their monthly bills, even as state projections indicate gas consumption will decline in the coming years. Eliminating these allowances would require new customers to pay their own connection costs, saving Baltimore Gas and Electric gas customers $620 million over 10 years, according to an analysis by the Office of People’s Counsel.
Strategic Infrastructure Development and Pipeline Replacement Costs
State regulators could deliver additional financial relief by scaling back utility plans to invest more than $7 billion in replacing aging gas pipelines with new ones. The Office of People’s Counsel warns that if this spending continues under the Strategic Infrastructure Development and Enhancement Plan, customers will be charged over $30 billion. Despite Baltimore Gas and Electric spending $1.4 billion on STRIDE pipeline replacement projects, hazardous leaks per year rose from 3,000 in 2014 to more than 4,000 in 2023. Tim Oberleiton, a senior attorney at Earthjustice’s Washington, D.C. Regional Office, works on reducing fossil fuel pollution from buildings, vehicles, and power generation, and represents environmental organizations before public service commissions and courts across Maryland, Virginia, and the District of Columbia.
Comparative Utility Reforms Across Other States
Regulators in Massachusetts, California, and New York are actively reining in utility spending on gas pipeline expansions and replacements. California eliminated line extension allowances in 2022, saving gas customers $104 million a year, and passed a 2024 law requiring utilities to prioritize zero-emission appliance zones over full pipeline replacements. New York ended its line extension allowances, generating projected savings of $200 million per year, and now requires utilities to file long-term plans evaluating alternatives to traditional gas infrastructure every three years. Massachusetts is considering similar reforms projected to save $160 million annually, and since 2023, its Department of Public Utilities has mandated that utilities prove pipeline replacements are necessary before approving investments.
Frequently Asked Questions About Maryland Utility Rates
What is the Strategic Infrastructure Development and Enhancement Plan?
The Strategic Infrastructure Development and Enhancement Plan, known as STRIDE, is a state-approved program allowing utilities to replace aging gas pipelines and recover costs through customer bills. The Office of People’s Counsel projects that total customer charges under this plan could exceed $30 billion if current spending trajectories continue.
How much money could customers save by ending line extension allowances?
An analysis by the Office of People’s Counsel shows that ending line extension allowances for Baltimore Gas and Electric would save customers $620 million over a 10-year period.
What alternatives are utilities required to consider under the Next Generation Energy Act?
The Next Generation Energy Act requires utilities to prioritize gas pipeline safety and demonstrate that they have evaluated more cost-effective alternatives to full pipeline replacements before moving forward with capital-intensive projects.
Related reading