Jul 28, 2014

BGE Asks for Rate Increase to Upgrade Grid

Baltimore Gas and Electric filed a request Friday with the state to increase the monthly rates Maryland customers pay in order to make improvements to its power system.

BGE Asks for Rate Increase to Upgrade Grid

Baltimore Gas and Electric (BGE) customers could soon see their electric bills go up by $7.22 per month and their gas bills by $4.62 per month, according to the Capital Gazette.

The company filed a request Friday with Maryland's Public Service Commission (PSC) to increase gas and electric distribution rates for both residential and commercial customers.

“There’s never a good time to seek a rate adjustment, especially now that we know so many of our customers are struggling in this economy,” BGE spokesman Rob Gould told the Capital. “But not making these adjustments is not an alternative if we want to keep delivering (gas and electric) efficiently, reliably and safely to our customers.”

BGE plans to spend about $3 billion on systems improvements over the next five years. 

Mark Case, BGE vice president of strategy and regulatory affairs, told the Capital that rate increases are in no way related to the June 29 storm that caused power outages for more than 93,000 customers in Anne Arundel County.

“The modernization of electric and gas systems is something that’s been under way for a while,” Case told the Capital. 

BGE's modernization plan includes potentially burying power lines. An idea that was also proposed Wednesday by Gov. Martin O’Malley (D-MD) as part an executive order calling for a 60-day study on how to improve Maryland's power grid.

O'Malley said he wants to evaluate whether burying electric lines makes financial sense. According to the Capital, some estimates put burial costs at more $1 million per mile.

Paula Carmody, the head of the state Office of People’s Counsel told the Capital, “We will certainly scrutinize and challenge BGE’s request.” 

The counsel recently fought . PSC decided earlier this month to reject $50 million of Pepco's proposed $68 million rate increase.

Carmody questioned the timing rate increase request given that the PSC is examining BGE's preformance in restoring power after the June 29 storm. The request also follows the merger between Exelon and Constellation Energy—BGE's parent company.

“I don’t think anybody’s idea of a successful result of a merger is an increase in rates paid by residential customers,” Carmody said.

The PSC is expected make a decision on BGE’s rate adjustment request in February 2013.

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