- Maryland regulators approved BGE delivery-rate increases starting Jan. 1, 2026, raising gas by 4.2 cents per therm and electric by 0.1 cents per kWh.
- The PSC cut BGE’s 2023 cost-recovery request from $152.3 million to $77.2 million, leading to smaller bill increases beginning February 2026.
- Consumer advocates and Baltimore leaders argue multi-year rate plans enable excessive pass-through spending and are pushing for legislative limits and stronger oversight.
- BGE says inflation, storm costs, supply-chain issues, and required safety and grid upgrades are driving higher spending and rates.
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Maryland’s regulatory environment is under intense scrutiny as BGE moves deeper into its second multi-year rate plan (MRP), which is designed to provide predictable, multi-year rate changes under PSC oversight. On January 1, 2026, BGE’s new gas and electric delivery rates took effect, continuing an upward trajectory in base distribution costs that BGE has depended on to fund maintenance, modernization, and grid reliability improvements.
However, their reconciliation request—seeking $152.3 million to recover 2023 costs—was substantially pared by the PSC, which approved only $77.2 million. This reflects regulatory pushback against unchecked cost recovery, particularly where BGE has exceeded original budget forecasts or where the expense justification is insufficient.
Consumer advocates, including the Office of People’s Counsel (OPC) and organizations like AARP Maryland, are raising alarms that the rapid increases in utility rates have outpaced inflation and income growth, disproportionately impacting vulnerable populations. They point to systemic issues in how multi-year plans are constructed and scrutinized—and whether utilities have enough incentive to control costs when under-collections can be effectively passed along to ratepayers.
The broader structural dynamics include rising supply and capacity market costs (especially from PJM auctions), climate-driven infrastructure demands (e.g. pipeline replacement, emissions control), and energy policy shifts (like EmPOWER programs or the Future of Gas docket). These force regulatory bodies to balance investment in reliability and safety with affordability and equity.
Strategically, stakeholders face several open questions: Can PSC tighten ex ante budget controls and ex post reconciliations without undermining infrastructure goals? Will legislative reforms limit multi-year rate plans’ exposure to cost overruns? How will BGE and Exelon manage capital spending pressures amid inflation, climate mandates, and market volatility? And what consumer relief programs (e.g. subsidies, payment plans) will be needed—and funded—to offset the burden for low-income and fixed-income Marylanders?
Supporting Notes
- As of January 1, 2026, BGE’s gas delivery rates increased by 4.2 cents per therm and electric distribution rates by 0.1 cents per kilowatt-hour.
- Since Exelon’s acquisition of BGE in 2012, base gas distribution rates have more than tripled, and electric distribution rates have nearly doubled.
- BGE requested $152.3 million to reconcile under-collected costs from 2023; the PSC approved only $77.2 million of that request.
- For customers, that decision will translate to a monthly increase of approximately $1.95 for gas and $0.72 for electric usage, effective February 2026 through end of 2027.
- The overall rate hikes stem from a PSC‐approved $408 million three-year rate increase plan (2024-2026).
- Advocacy from OPC and AARP claims that BGE failed to demonstrate sufficient fiscal prudence and that many expenditures could have been delayed or reprioritized.
- BGE defends its spending due to inflation, supply-chain disruptions, storm recovery costs, required infrastructure, safety, reliability, and regulatory compliance.
- Baltimore City Council unanimously passed a resolution calling for freezing or stopping planned 2026 rate hikes, alleging utilities are prioritizing shareholder goals over ratepayer burden.
- Regulatory reforms are being considered, including bills to reorder cost structures, require cost-benefit analyses for gas infrastructure, prioritize leak mitigation, and disallow certain cost pass-throughs.