Baltimore Gas and Electric Co. wanted to raise its customers’ electricity rates starting Aug. 1. But state regulators said Monday that the proposed rate increase will require months of review and, if ultimately approved, won’t take effect until at least January.
The utility company last week filed a $156.1 million rate case with the Maryland Public Service Commission — a move that would increase residential customers’ electric bills by an estimated average of $8 per month.
In its filing, BGE said the rate increase was necessary to “sustain a safe and reliable system.” Without the funds, the region was at risk of longer, more frequent and more expensive power outages.
BGE requested that the increase go into effect next month, but the commission said a decision would not be made next year. Until then, the investor-owned utility said in a news release, “the current rates for BGE’s customers are frozen and will not change.”
Ratepayer and consumer advocates have said that BGE is incentivized to increase its spending because the more money it spends, the greater the company’s profits.
The utility said last week that it deliberately delayed its rate case to evaluate alternatives, which included not raising rates. But it ultimately decided against that and said its current rates were “neither just nor reasonable.”
BGE made a $578 million profit last year, according to the company’s financial filings. As part of its latest request, the company asked to increase the amount of profits its shareholders will earn from future infrastructure spending.
As the commission weighs the request from BGE over the coming months, it will have to consider how much more profit the company is allowed to make.
After a procedural schedule is set, the commission said it will solicit public testimony and hold evidentiary hearings before making a decision on BGE’s application.
This story has been updated to explain that BGE’s proposed rate hike cannot take place until at least January because of a regulatory timeline set by the Public Service Commission.
