Maryland residents reeling from soaring heating bills this winter:

Instead of blaming the weather, the state should crack down on the real culprit – Baltimore Gas & Electric Company’s out-of-control spending on pipeline replacement.

So say labor, consumer and climate advocates as well as People’s Counsel David Lapp and Maryland Attorney General Anthony Brown – a group backing legislation aimed at reining in utility spending and bringing down customer costs.

“This cold January and these new increases, with many people saying their bills have more than doubled, has brought us to crisis levels,” said Emily Scarr, senior advisor for Maryland PIRG.

Scarr and other critics point the finger at Maryland’s 2013 STRIDE Act.

“It incentivized financially the utilities to more proactively address their aging gas infrastructure, which they hadn’t been keeping on top of,” Scarr said. “But the law lacked any safeguards on spending, any significant cost controls or any requirements to prioritize safety.”

“We need our regulators and legislature to keep watch, to make sure that spending is prudent and providing benefit for customers,” she continued. “Right now, it’s totally imbalanced. It’s not affordable.”

Scarr and other advocates are rallying support for legislation that failed in the General Assembly last year, the Ratepayer Protection Act, sponsored by two Baltimore lawmakers, Delegate Elizabeth Embry and Senator Mary Washington.

It requires utilities to prioritize identifying and addressing gas leaks and rein in excessive pipeline spending to improve safety, while lowering costs.

Those costs have soared thanks to BGE’s pipeline replacement program, known as “Operation Pipeline.”

BGE’s gas delivery rates have more than tripled since 2010 and are projected to rise further as pipeline replacement costs rise, according to the Maryland Office of the People’s Counsel,

At the same time, BGE profits have more than tripled from $147 million in 2010 to $485 million in 2023, the sponsors say.

“The way it is set up now, the more a utility spends on new infrastructure, the larger the opportunity to profit, which creates a natural incentive for them to overspend,” Scarr said.

Delivering Profits

State-approved price increases of $7.77 a month for the average residential gas and electric customer began on January 1.

By June, that will grow to $26.06, a 12% increase for the average residential bill under BGE’s approved plan.

BGE says the higher rates are necessary to support ongoing investments in infrastructure, like replacing older natural gas pipes that leak. The rate hikes will also help improve safety and meet state climate goals, they say.

But watchdog groups say these claims are disingenuous.

“The high bills are predominantly due to massive rate increases in recent years – a reflection of BGE’s successful efforts to satisfy the aggressive investor growth that its parent company, Illinois-based Exelon, promises its investors,” People’s Counsel Lapp said in a recent op-ed.

“These high bills are . . . a reflection of BGE’s successful efforts to satisfy investors”  – People’s Counsel David Lapp.

BGE has not yet responded to a request for comment on the bill.

Under HB419, utilities would have to prioritize safety and use more efficient modern leak technology to pinpoint actual trouble spots rather than undertake costly wholesale pipe replacement, Scarr said.

(The Economic Matters Committee is scheduled to hear the bill on Thursday at 1 p.m.)

“There’s lining options you can choose. All sorts of other things you can do to repair a pipeline other than replace it,” she continued.

“Instead, what we’ve seen is BGE upgrading the whole system by putting in new higher pressure maintenance and lines throughout our neighborhoods,” she said.

“What they ought to be doing is going around across the city and addressing specific problems.”

Customers are now paying $2 to BGE for gas delivery for every $1 spent on gas to heat their homes, bill sponsors assert.

Without intervention, according to the OPC, average BGE customer’s monthly winter delivery bill could double by 2035, reaching $450 per month.

Poor Hit Hardest

Last month, Attorney General Brown joined Lapp in calling for lawmakers to reform Maryland’s STRIDE law as one step toward protecting citizens, especially vulnerable ones, from unaffordable heating bills.

Low-income households typically spend more than 10% of their monthly incomes on electricity and heating bills, the two said in a joint op-ed.

“In Baltimore City, that number is 26%, according to a recent study – the highest of any metropolitan area in the country.”