May 22, 2013

Baltimore Gas & Electric (BGE) has filed yet another rate increase request in the form of a new customer surcharge. If approved by the Maryland Public Service Commission (PSC), electricity rates would increase by an approximate 4 percent. For an average home, this means a $4.41 per month increase or about $53 per year. BGE also requested a 4 percent natural gas rate hike, totaling to about $4.51 per month.

The funds will go toward replacing utility poles, overhead lines, and underground cable that are either outdated or damaged from major recent storms. Extensive tree trimming will also help to reduce power outages such as those experienced during Superstorm Sandy in 2012.

BGE President and CEO, Kenneth W. DeFontes Jr. said in a statement, “We understand that increases in our electricity and gas distribution base rates are never welcome, but the investments that we’ve made are already yielding tangible benefits for our customers in terms of fewer outages and quicker restoration when outages do occur.”

Why So Many Recent BGE Rate Hikes?

In February, the PSC approved a $113 million per year distribution rate hike for both electricity and natural gas, scheduled to take effect in June. The funds are set to go towards reliability and safety, and will raise the average home’s electricity bill by about 2.6 percent and 4.25 percent for natural gas. In June, the utility’s supply rates are scheduled to raise by about $6 per month for the average customer. Of course, customers can shop around for a retail electricity provider that offers lower rates to avoid this increase.

Many BGE customers and industry advocates are speaking out. Especially for both electricity and natural gas customers, these charges add up. Combine this year’s two rate hikes for both services, and many residential customers could see their bills rise by $15 or more per month. The largest criticisms revolve around supposed corporate greed that is common to point out with utility companies. Customers question whether or not the funds are actually going toward improved infrastructure and reliability as opposed to the pockets of corporate investors.

Still, others question why storm damages are taken into account with rate increases while rate payers’ losses aren’t taken into account. What about lost wages and groceries for individual rate payers? What about lost productivity for entire companies? There’s no doubt that the utility needs to improve its infrastructure so its customers can be better served. Concerned customers can, of course, speak out during public hearings prior to rate increase approvals. Hearing notices can be found on the Maryland PSC’s website.