Maryland’s utility regulator denied roughly half of a BGE rate increase request as part of a 2023 reconciliation process, but ratepayers can still expect to see bill increases in the new year.
BGE submitted a claim with the Maryland Public Service Commission (PSC), asking that customers help foot the bill for its proposed utility projects that came in hundreds of millions of dollars over budget.
In 2023, BGE spent $323 million on capital investments for gas and electric systems infrastructure above what the PSC had authorized, leading the utility to request $152 million more from customers to help compensate for what it under-recovered.
BGE says the underbudgeting can be attributed to inflation rates, supply chain issues and storm activity.
“BGE understands that energy bills are a top concern for our customers, and we take that responsibility seriously,” said BGE President and CEO Tamla Olivier in a statement. “While we appreciate the Commission’s focus on keeping costs low for customers, we have a responsibility to keep the power system operating reliability [sic] and safely which requires maintenance work on our systems.”
PSC Chair Frederick Hoover said the commission wanted to ensure the unforeseen expenses were not just passed onto ratepayers without a thorough review.
“So that's what we did in this order, and we determined that their overshooting of the budgets and over expenses over what they had projected would not be allowed to be passed on to customers,” Hoover said.
The commission still approved $77 million in reconciliation costs for BGE, meaning customers can expect an average monthly bill impact of 72 cents for residential electric customers and $1.95 for residential gas customers.
Those increases will begin in February 2026 and extend through the end of 2027.
The Maryland Office of People’s Counsel (OPC) – an independent state agency that advocates for utility consumers – asked the PSC to deny the entire increase request but is “relieved” the commission reviewed the provided evidence that led to the approval of a lesser amount.
Maryland People’s Counsel David Lapp says OPC still has several concerns with BGE’s spending habits, pointing to $213.8 million in approved rate increases from 2020-2023, including additional rate increases that more than doubled the amount the PSC initially approved.
“These numbers show that BGE’s spending forecasts cannot be trusted and that the company is failing to operate its business with the fiscal stewardship and financial prudence that its customers deserve,” Lapp said in a statement.
BGE says customers are already seeing tangible benefits from the investments the utility is making in its gas and electric systems, including “the best electric service reliability in the company's history in 2024.”
The 2023 reconciliation process will be the last one for BGE – new legislation passed by the Maryland General Assembly in 2025 prohibits utilities from going back to the ratepayers to recover costs following the PSC’s approval of multi-year rate plans.
The $77 million rate increase that will hit ratepayers in February comes on top of the utility’s authorized $408 million rate increase for 2024-2026.
The approved rates resulted in an average 2024 bill increase of $4.08 a month for residential electric customers and $10.43 per month for residential gas customers.
Customers saw a smaller increase in 2025, and the PSC reports ratepayers will see an average increase of roughly 34 cents a month for electric and $2.80 a month for gas come Jan. 1.
BGE says these increases may vary slightly, largely depending on customer usage.
At a time when BGE has come under fire from customers and elected officials in recent years for its rate hikes, Hoover says there are a lot of factors the PSC has to keep in mind when determining how much the utility can charge customers.
“We understand that BGE has an important responsibility in providing reliable, available and affordable service to all their customers. We've tried to make sure that they have sufficient revenues to do what they need to do without overburdening the customers that actually have to pay the bill,” Hoover said.
The latest rate increase also comes just days after BGE was called to testify in front of the PSC on its customer service practices and long call wait times.
The PSC told BGE to go ahead with its planned increase in customer service staffing, and Hoover says the commission will be issuing a directive in the coming days with further items the body wants to discuss based on the complaints its heard.
