The Maryland House and Senate are expected to announce their formal energy proposal to help curb rising utility costs within the coming days, and lawmakers are continuing to throw their ideas into the ring.

The House Environment and Transportation Committee heard hours of testimony on Tuesday over two contentious bills that would each fundamentally change how utilities operate in Maryland.

The first bill, dubbed the “Break STRIDE Act,” would limit a gas company’s ability to proactively charge ratepayers for gas pipeline replacement projects.

The Strategic Infrastructure Development and Enhancement Plan (STRIDE) Act was passed in 2013 as a way to encourage gas utilities to replace aging gas infrastructure, like cast iron pipelines, by allowing for “accelerated cost recovery.”

Accelerated cost recovery gives utilities the ability to recover the estimated cost of infrastructure upgrades through a surcharge — tacked onto energy bills — prior to carrying out the work.

Maryland law caps that surcharge at $2, but Del. Dylan Behler (D-Anne Arundel), the bill’s sponsor, says that limit is not meaningfully working.

Behler explained the surcharge resets when utilities come before the Public Service Commission (PSC) — the state utility regulator — to request a rate increase.

The initial $2 surcharge becomes baked into the utility’s base rate and new fees can compound on ratepayers’ bills.

Not only would the bill repeal the STRIDE Act altogether, but it would also prevent gas utilities from recovering infrastructure replacement costs within their multi-year rate plan requests.

This provision would be a key change because as explained by BGE Vice President of Strategy and Regulatory Affairs John Frain, utilities are now utilizing multi-year rate plans over STRIDE surcharges.

“We used STRIDE for the first 10 years. We had two, five-year plans, and then we did move to multi-year plans. Multi-year plans allow for the same upfront conversation and transparency as STRIDE into what the work would be,” Frain said.

Multi-year rate plans are a fairly new ability for utilities, allowing them to set customer rates for a 3-year period based on forecasted expenditures.

Before 2020, utilities gave the PSC their expense reports and were reimbursed through ratepayer bills retroactively.

All in all, Behler wants to prohibit both proactive cost recovery strategies, arguing they incentivize utilities to replace gas pipelines — which is costly — without considering less expensive alternatives — like repairs.

“STRIDE and accelerated recovery of gas infrastructure spending has driven up customer rates while allowing our investor-owned utilities to receive exorbitant profits on the backs of ratepayers, and we cannot allow it to continue,” Behler said.

But BGE Director of Government and External Affairs Brittany Jones says switching to a retroactive cost recovery model would be less safe and more expensive for utility customers.

“2025 marked the fewest underground [gas] leaks this century in the BGE system. This translates directly to fewer emergencies, fewer injuries and safer communities, especially in those neighborhoods that are burdened by aging infrastructure,” Jones said.

She also testified that pipeline replacement adds about $10 a month to the average BGE customer bill, and if the utility company was stripped of its ability to proactively recover costs, that charge would double.

Jones says that cost increase would be due to the need to repeatedly chase gas leaks instead of replacing a pipeline all at once.

The bill would also require utilities to provide two-year advanced notice to residents on any infrastructure replacement projects, giving customers ample time to decide if they want to electrify in order to opt-out of the costly upgrade.

The committee also heard testimony over HB1561, known as the “Affordable Energy Act” — a title some opponents find questionable.

The bill would give utility companies the ability to build their own energy generation sources, prioritizing solar, wind or geothermal plants.

Currently in Maryland, utilities like BGE own the power lines that transport electricity, but that electricity comes from independent generation providers.

Some lawmakers believe that allowing utilities to enter the generation market will help solve regional energy supply issues and ultimately lower utility bills.

“We're just going to add a stable, publicly accountable energy supply,” said the bill’s sponsor, Del. Pam Queen (D-Montgomery County). “Our 20 years of energy deregulation has not resulted in all the benefits promised, and this is a time for us to look at a way to solve this issue, looking at energy affordability, reliability and the demand challenges that we're facing.”

Exelon has been pushing for the bill’s passage for months, even purchasing a Super Bowl ad over the regulation change.

“Maryland’s public utilities can be a part of the solution, adding competition with public oversight to help keep costs under control. But current rules stand in the way,” a narrator said.

Maryland People’s Counsel David Lapp, who advocates for utility customers within an independent state agency, argues the legislation would only increase profits for utilities.

“What it's most likely to do is to drive up customer bills even higher. It will make generation a utility monopoly investment and grow utility profits by making ratepayers pay costs for decades into the future, whether or not that generation is needed to serve Maryland customers,” Lapp said.

He cited Pepco and BGE rates — both subsidiaries of Exelon — doubling and tripling in recent years with more increases likely on the way.

“Why have our monopolies expand their businesses when they are contributing so substantially to the energy affordability issues that Maryland customers are facing?” Lapp added.

Maryland State Treasurer Dereck Davis testified in favor of the bill, making the case for a need for more in-state generation.

“I think we can have more reliable in-state power, long-term planning, instead of market guessing,” Davis said. “The state can plan generation based on long-term demand and forecast. Infrastructure can be built because shortages do occur, and energy policy can align with state climate goals. Also, I believe potentially, it will potentially lower and offer more stable rates.”

Both bills await a committee vote, although bits and pieces of either bill could be looped into the larger energy package expected from both chambers.