BGE proposes rate hike for gas

Proposal seeks 3.5% increase; no change for electricity

Baltimore Gas and Electric Co. proposed a rate increase that would boost the average residential gas and electric customer’s total bill by $5.77 per month and cover the utility’s costs for replacing aging natural gas pipelines, updating meters and other work.

BGE filed a request Friday with the Maryland Public Service Commission to raise natural gas delivery rates an average of 3.5 percent. It last filed for a review by regulators in 2015, after which rates increased by $4.54 per month for the average customer in June 2016. The company is not requesting a change to electric rates.

The PSC is expected to make a decision on the rate request in January after a process that will include public hearings.

BGE, which serves almost 675,000 gas customers in Central Maryland, said it wants rates to reflect the $63.3 million the utility has invested over the past few years in safety and reliability improvements.

The BGE rate filing is just the first step in what is typically a months-long process, said Theresa Czarski, deputy People’s Counsel in the Maryland Office of People’s Counsel, which represents the interests of electricity and natural gas consumers. Her office will analyze the request and present expert witnesses and testimony to the commission.

“We will look at the case and do our analysis,” said Czarski, who said it was premature Friday to comment.

Even with the increase, the utility said, the average residential gas customer’s total bill still would be lower than a decade ago, due to significant decreases in natural gas commodity prices, more efficient appliances and use by customers, and the federal tax reductions that led BGE to pass on $103 million in annual savings through rate decreases starting in February.

“While any proposed increase may be a challenge, we also know that our customers appreciate the investments we are making to serve them better, and the continuous effort we make to reduce costs and pass through efficiency savings,” BGE CEO Calvin G. Butler Jr. said in an announcement. “We’re delivering on our commitment to enhance the safety and reliability of the natural gas system, completing modernization projects ontime, on-budget and at a faster pace.”

BGE has invested $63.3 million since 2016 in projects such as replacing sections of a major gas transmission pipeline that runs from western Baltimore County to Baltimore City, a backbone of the system that dates to 1949. Work also included equipment inspections, repairs and preventive maintenance, adding smart devices inside pipes and relocating thousands of gas meters from inside garages to outdoors. That work is part of an overall $500 million investment last year in natural gas projects and maintenance.

In a separate project, paid for by a capped monthly charge of $2 on customers’ bills, BGE is in its fifth year of a gas infrastructure replacement program to remove aging pipes.

Over the last four years, more than 150 miles of gas mains and more than 32,000 service pipes connecting homes and businesses to gas mains have been replaced with modern gas equipment. Pipe replacements have helped reduce greenhouse gas emissions, resulting in a reduction of more than 1 million pounds of methane gas over the past three years, BGE said.

Under state law, the capped monthly charge to cover that work will be reset as part of any rate change, BGE said. A second five-year plan was recently approved to modernize gas equipment in neighborhoods throughout Central Maryland next year through 2023.