The debate over Baltimore City’s conduit agreement with Baltimore Gas and Electric – the sprawling underground network that helps power city infrastructure built in the 1900s – is gaining more attention as state lawmakers have started asking questions.
There is one lingering question that appears to be weighing heavily on the minds of Baltimore City’s local and state politicians: Is the conduit deal really in the best interest of its residents?
The BGE contract enables the private utility business to have access to the city-owned underground conduit system by paying for network repairs instead of paying city fees.
In the meantime, Baltimore City Council members – even those most disgruntled about the deal, say they are waiting for documents subpoenaed from the mayor’s office to further evaluate the deal. The deadline for those documents is Feb. 21.
Baltimore Gas and Electric, rents the lion’s share, occupying 76% of the conduit.
During the meeting with state lawmakers, Stephen Salisbury, Baltimore City’s deputy city solicitor, defended the deal.
“We feel this was a good deal for the city,” Salisbury said. “We wouldn't have done it if we didn't think it was in the city's best interest.“
Nick Mosby, Baltimore City’s council president who sat out the meeting this week in protest, vehemently disagreed. Mosby even brought up his experience as an electrical engineer to bolster his argument about why it’s a bad deal for taxpayers.
“There is not any elected official in city hall who's willing to stand on this agreement,” he said. “At the end of the day, the origination, as well as the speed and the execution of this plan [will have] a tremendous impact on generations.”
The Baltimore City delegation which includes Sen. Jill Carter, Sen. Antonio Hayes, Sen. Bill Ferguson and Sen. Mary Washington listened on Friday.
Baltimore City Comptroller Bill Henry read a timeline of events regarding negotiations between the mayor’s office and the power company.
“The mayor claimed that this deal has been public since October [2022],” Henry said. “It’s simply not true. This deal hasn't even been public for a month. For the mayor to state otherwise is clearly conflating his administration's long term private discussions with BGE.”
Mosby chimed in agreeing that the mayor is rushing into a dangerous deal.
“This administration trying to skirt rules,” said Mosby. “[They’re] doing any and everything to try to get this thing passed in a very untimely manner.”
Besides the timing of the deal, there are also concerns about higher electric bills for Baltimore City residents. BGE filed a request on Friday with the Public Service Commission to raise customers' rates for delivery by about $10.36 each year on average for three years. If approved, it would take effect Jan. 1, 2024.
Salisbury, the deputy city solicitor and attorney, argued this deal would lessen customer bills.
“I know a lot of people are focused on their [Baltimore Gas and Electric] rates,“ said Salsibury. “The city has no control over BG&E’s rates. But the structure of this deal is such that, this would allow the BG&E to realize a savings from the way the deal is structured.”
BGE agreed to pay $134 million for 'system improvements' between 2023 and 2027. In addition, BGE would pay the city $1.5 million each year in maintenance fees. BGE has claimed the capital improvement agreement will 'lessen customer bill impacts.'
But Mosby retorted that was a misrepresentation and challenged Salisbury’s claim about the company lowering electric rates due to savings.
“The idea that this deal is going to help customers' bills is absolutely ridiculous,” Mosby said during the meeting with lawmakers. “It's that capital improvement costs the 34 plus million dollars that BG&E is going to put in their rate case to potentially raise rates.”
Another concern among lawmakers was whether the current deal meets the government’s commitment to increase participation from minority and women-owned businesses. In 1976, Baltimore City established its minority and women-owned business program to increase participation in the economy among historically marginalized individuals.
But Sen. Hayes questioned why the deal lacked a legally binding supplier diversity requirement in a fiery exchange.
“You guys had the ability to mandate this as a part of agreement. You chose not to,” Hayes said. “There's already a voluntary agreement. There's no other enforcement mechanism that the [Public Service Commission] held that could hold them accountable.”
Salisbury, the city attorney, countered Hayes by saying that even though the Public Service Commission’s minority and women-owned business goals are voluntary, Baltimore Gas and Electric has typically exceeded minimum benchmarks.
As the matter gets sorted, one Baltimore City Council member is pushing for swift action that would potentially erase the city’s spending board. Zeke Cohen is proposing legislation that would curb the mayor’s spending power.
“The debacle over the BGE conduit deal is a brutal indictment of our strong mayor system of government in Baltimore,” Cohen said in a statement. “We must respond by democratizing the Board of Estimates to make it more accountable to our residents. Or, we could just abolish it.”
Editor's Note: A previous version of this story inaccurately described the rate hike for BGE proposed.
