Energy Affordability- Problems and Solutions

Energy Affordability- Problems and Solutions

Brittany Baker Maryland Director, Chesapeake Climate Action Network

There is so much information to help us understand the high energy cost issue. Please read it.

Some dive-in on the bill in the slide.

Below is a clear, regulator-accurate breakdown of which parts of your Washington Gas bill are avoidable vs. unavoidable, and what actions (if any) actually reduce each charge.


1. UNAVOIDABLE CHARGES

You pay these no matter what supplier you choose and even if gas prices fall.

๐ŸŸฅ Distribution Charge ($15.98)

  • Pays for pipes, meters, maintenance, emergency response
  • Set by Maryland PSC
  • Cannot be avoided
  • Reduced only by using less gas

๐ŸŸฅ STRIDE Surcharge (~$1.90)

  • Funds pipeline replacement & safety upgrades
  • Automatically approved cost recovery
  • Unavoidable
  • Continues even if you switch suppliers

๐ŸŸฅ System Charge ($11.85)

  • Covers system-wide reliability & balancing
  • Infrastructure-based
  • Unavoidable

๐ŸŸฅ EmPower MD Surcharge ($1.80)

  • State-mandated energy efficiency programs
  • Required by law
  • Unavoidable

๐ŸŸฅ Taxes ($2.99 total)

  • Montgomery County energy tax
  • MD Gross Receipts tax
  • Unavoidable

๐Ÿ”ด Bottom line (Unavoidable)

~$34โ€“36 of your $47.98 bill is unavoidable

No supplier switch, negotiation, or timing can remove these.


2. PARTIALLY AVOIDABLE CHARGES

Can be reduced only by using less gas

๐ŸŸจ All per-therm charges

These scale with usage:

  • Distribution charge
  • STRIDE
  • System charge
  • EmPower MD
  • Taxes

How to reduce them:

  • Insulation
  • Heat pump hybrid systems
  • Lower thermostat setpoints
  • Efficient water heater

โš ๏ธ But note:

Even cutting usage 30% usually lowers the bill only ~15โ€“20%.


3. AVOIDABLE / CHOOSABLE CHARGES

These are the only charges you can change via supplier choice

๐ŸŸฉ Natural Gas Supply (PGC โ€“ $13.46)

  • This is the commodity gas price
  • You may:
    • stay with Washington Gas default
    • switch to a retail supplier
  • This is the ONLY line item you can shop for

Reality check:

  • Typical savings from switching: $1โ€“3/month
  • Many third-party suppliers:
    • raise rates after teaser periods
    • add early termination fees
    • lock you into higher fixed prices

๐Ÿ“Œ Most people save little or nothing long-term.


4. What Is Truly Avoidable?

Charge TypeAvoidable?How
DistributionโŒ NoNone
STRIDEโŒ NoNone
System chargeโŒ NoNone
EmPower MDโŒ NoNone
TaxesโŒ NoNone
Gas supply (PGC)โœ… YesSwitch supplier
All chargesโš ๏ธ PartiallyUse less gas

5. Hard Truth (Important)

Washington Gas is essentially a fixed-cost utility disguised as a usage bill.

  • 70โ€“75% of your bill is policy + infrastructure
  • Efficiency helps, but only modestly
  • Electrification (heat pumps) is the only real escape, but costly upfront

If you want next:

  • a side-by-side bill before/after heat pump
  • a supplier switch risk table
  • how Maryland PSC approved STRIDE and why bills rose
  • comparison with BGE / Pepco gas customers

Just say the word.

PJM price model and your utility bill

Recently there are many complaints across the east coast (13 states falling under PJM, 67 million customers) about the high utility price. MD Senator Katie Fry Hester organized a meeting to talk about PJM price models and data center issue. I am attaching different price models shared from her office.

More slides are saved here: https://drive.google.com/drive/folders/16s2nfhPeaIx6mQxThpO52nLtZ1lTrnC3?usp=drive_link

A different approach:

I asked a question during the virtual meeting. Could we have a rate-payer centered model? I support having data centers. However, they need to share the cost of building infrastructures.

So the price model starts where considering the price increase will be limited by 3% every year, traverse back to see how much every other user need to pay to increase electricity capacity?

PJM has not done such analysis, or probably they would not. The Federal Energy Regulatory Commission should demand to do a study like that.

Another issue always puzzles me: we, as rate-payers, pay energy companies to design, build, finance and run our energy portfolio, what’s the exact power do we have to influence the decision of a private company? Is there anything wrong with this model for affordable energies?