BGE issue and rate increase request again
We received another rate increase letter/email from BGE. As a Maryland State Delegate, I am going to send the following reponse to them. They seems to understand the families struggle, but they did not talk about fair funding, and accountability.
Families Deserve Reliable Service and Affordable Bills
The recent storms left more than 100,000 Maryland customers without power during extreme summer heat. For many families, losing electricity is more than an inconvenience. It means spoiled food, missed work, disrupted childcare, health risks for seniors and medically vulnerable residents, and uncertainty about when service will be restored.
At the same time, Maryland families are facing rising costs for housing, groceries, insurance, healthcare, and energy. Even what may appear to be a modest increase in a utility bill can have a meaningful impact on household budgets.
The yearly quick growth of energy cost has been a huge difficulty for every Maryland family.
The challenge before us is not simply how to keep the lights on. It is how to maintain and modernize our electric system while protecting Maryland families from bearing an unfair share of the cost.
We Need a Different Investment Model
The current utility model relies heavily on ratepayer-funded investments. While customers benefit from a reliable electric grid, they should not be expected to shoulder nearly all of the financial burden.
Maryland should examine alternative approaches that distribute costs more fairly among all beneficiaries of the system.
Option 1: Shared Responsibility Model
Infrastructure investments should be funded through a combination of:
- Ratepayer contributions
- Utility shareholder contributions
- Commercial and industrial customer contributions
- Federal and state grants where available
Under this approach, shareholders would be expected to reinvest a portion of earnings into reliability and resilience improvements before residential customers are asked to absorb the full cost.
Option 2: Reliability and Resilience Fund
Utilities could dedicate a percentage of annual profits to a reliability reserve fund that supports:
- Aging infrastructure replacement
- Storm hardening
- Vegetation management
- Emergency response preparedness
This would demonstrate that shareholders are contributing alongside customers.
Option 3: Growth Pays for Growth
Maryland is experiencing increasing demand from data centers and other large energy users.
When new infrastructure is required primarily to serve large-load customers, those customers should pay a proportionate share of the associated costs. Residential ratepayers should not be subsidizing infrastructure expansions driven by future commercial growth.
Option 4: Performance-Based Regulation
Utilities should be rewarded not simply for spending money, but for delivering measurable improvements in reliability, resilience, and customer service.
Accountability Must Accompany Any Rate Increase
Customers have been asked to pay more each year, they deserve transparency and measurable results.
Before any major rate increase is approved, utilities should clearly disclose:
- How much shareholders are contributing
- Expected reliability improvements
- Alternative lower-cost scenarios considered
- Executive compensation and administrative cost trends
- Impact on residential, small business, and low-income customers
Most importantly, there should be specific performance targets.
For example:
| Metric | Current | Target |
|---|---|---|
| Average outage duration | Baseline | Reduced by 20% |
| Average outage frequency | Baseline | Reduced by 25% |
| Storm restoration time | Baseline | Faster restoration |
| Customer bill burden | Baseline | Minimized increase |
If those targets are not met, there should be consequences. If utilities exceed expectations, reasonable incentives may be appropriate. Accountability must work both ways.
Conclusion
Marylanders expect reliable electric service. They also expect fairness.
The question is not whether investments are needed. The question is how those investments are financed and whether customers receive measurable improvements in return.
We should not expect utlitily companies receives historical and growing profits while everyday ratepayers pay more and more to their profit.
BGE rate increase letter
Dear Customers,
First, I want to thank you for your patience during the severe storms that hit our region last week—especially the more than 100,000 customers who lost power. Being without electricity is frustrating under any circumstances, particularly in extreme heat. I’m grateful for your patience as our crews worked around the clock to restore service.
It’s never easy to ask customers to pay more—especially at a time when so many families are already feeling the pressure of higher prices.
That’s why I wanted you to hear it directly from me.
Recently, BGE filed a request that, if fully approved, would increase electric delivery rates beginning next year by about $8 for a residential customer with average usage. I know many people will understandably ask, “Why now?”
You deserve a clear answer.
Like every family and business, we’re facing rising costs. But let me be clear—this request isn’t about expanding our business or taking on new projects. In fact, we’ve intentionally scaled back our investments and focused only on the work we believe is absolutely necessary to keep the lights on for the more than 1.3 million customers who depend on us every day.
I also want you to know that we understand what’s happening around your kitchen table. The cost of groceries, housing, childcare, healthcare, and just about everything else has gone up.
For many families, another bill—even a small one—matters. We don’t take that lightly, and we didn’t make this decision lightly either.
Much of the equipment that delivers electricity to your home was built many decades ago. Every year we have to make decisions about what can safely wait and what simply can’t. This plan focuses on the work that cannot wait to make sure the system can continue to serve our communities safely and reliably. However, there is a risk that deferring work could increase the risk of more frequent and prolonged service outages and emergency repairs that can be more expensive than planned, proactive replacements.
This is not a wish list. This is the minimum amount of work we believe must be done to continue providing the reliable service our customers expect—on ordinary days and when severe weather puts our system to the test.
Many of you saw just how important that work is during the severe storms that hit our region last week. When severe weather hits, customers rightly expect us to be ready—with people, equipment and resources to respond. Part of this proposal is about making sure we can continue to do that.
The next step is that the Maryland Public Service Commission will carefully review every dollar we’ve requested, and there will be opportunities for customers, consumer advocates, and other stakeholders to participate throughout the process.
Just as important as keeping your lights on is helping customers manage their bills.
Whether it’s through payment arrangements, energy assistance programs, energy savings tools, or other resources, we want every customer to know that help is available. If you’re struggling to pay your bill, please reach out before it becomes a crisis. We have a team ready to work with you.
I know trust isn’t earned through words alone. It’s earned by being honest, by listening, and by delivering on our commitments.
You have my commitment that we will continue to be transparent throughout the process. We’ll explain what we’re proposing, answer difficult questions, and keep working every day to keep costs as low as possible.
Thank you for the opportunity to serve you.
Sincerely,
Tamla Olivier
Chief Executive Officer, BGE