The Maryland Public Service Commission approved rate hikes for BGE customers last Friday, an increase that would generate about $113 million per year in an effort to “promote safety and reliability” for electricity and natural gas services. The average residential electric bill will increase by about 2.6%, while the average gas customer will see an increase of 4.25% per month. The new distribution rates will take affect beginning this week.
Reasoning for the rate increase it attributed to State-mandated safety and reliability projects in addition to increased infrastructure spending. In regards to safety, some of the funding will go towards the new Deanna Camille Green Rule, which imposes safety regulations in regards to contact voltage detection and prevention. Reliability and infrastructure improvements include upgrades in electric reliability, distribution infrastructure repairs and upgrades, and boosted tree trimming, which will help decrease power outages and downed lines.
BGE initially requested $175 million, 35% more than what was approved. Of the $113 million, roughly $80.55 million was approved for electric distribution and $32.4 million for natural gas distribution. The Public Service Commission did not grant the remaining $61 million that was requested due to the lack of ability on BGE’s part to successful clarify projected estimated expenses, which were “not currently used and useful, they are not even known and measurable.”
Since the rate hikes are distribution-related, all BGE customers will be affected, no matter if they receive electric supply from BGE or a retail electricity provider. Currently, BGE’s supply rates are at an average 8.968 cents per kilowatt hour, with an increase to 10.474 cents per kilowatt hour scheduled in June. BGE customers shopping around for a retail electricity provider should look for providers with rates below the scheduled 10.474 cents per kilowatt hour.