A Baltimore City councilman is calling on the state body that oversees Baltimore Gas and Electric Co. to reject a proposed plan that would significantly increase gas costs for customers over the next three years and his City Council colleagues have also signaled their disapproval.
Zeke Cohen, who represents Southeast Baltimore’s 1st District, introduced — and council approved — a nonbinding resolution Monday opposing the rate increase. BGE says its proposed rate increase would replace gas and electric transmission lines and raise customer bills by an average of $10.36 per month in each of the next three years. An estimate by the Office of the People’s Counsel, however, says a winter gas and electric distribution charges would grow from $156 in 2020 to $254 in 2026, a 63% increase.
“They [BGE] need more oversight, not less,” Cohen said in press conference on Monday morning outside City Hall. “They need more accountability, not a massive taxpayer subsidized investment in their build out.”
The resolution is the the latest disagreement between city leaders, residents and the utility company.
In an early July City Council hearing, city officials scrutinized the utility company over replacing gas regulators. Residents have raised concerns over the project for months, questioning the safety of external regulators, devices that maintain a set pressure in a gas system, if vehicles crash into them. More than 400 city residents have taken BGE to court over the plan.
And in February City Council members questioned an agreement between Mayor Brandon Scott and BGE that would give the company access to Baltimore underground utility network — known as the conduit — in exchange for $134 million in repairs to the system over the next four years.
Cohen’s resolution asks the Maryland Public Service Commission, the body that oversees and regulates the utility company, to reject the multiyear rate plan that BGE proposed earlier this year. Cohen said in the resolution that BGE “does not formally prioritize pipeline replacement projects by risk or cost-effectiveness” or “adequately account for changing policy and market conditions in the face of climate change.”
Nick Alexopulos, a spokesperson for the utility company, said in a statement the multiyear plan includes major investments that will “begin to lay the foundation for the state of Maryland to be able to meet its goal of net-zero emissions by 2045.” Alexopulos said the investments are “indispensable” to the state’s decarbonization goals.
The plan will go through “a thorough process for public input, questions and clarifications,” Alexopulos said.
“We look forward to an equitable conclusion to this process, which will end with the PSC providing an order which determines what is approved and any future rate changes,” he said.
The Office of People’s Counsel, the state agency that advocates for utility consumers, said these rates allow utilities to charge customers for costs of projects “before those projects are used to serve consumers.”
These rates are based on “projected spending with little accountability” and are “primarily driven by spending on infrastructure,” according to an Office of People’s Counsel report released in June. Distribution costs for consumers are constant if the utility builds and replaces new infrastructure at the same rate as older infrastructure is paid off.
“But if infrastructure is replaced or added more quickly, distribution rates will increase. ... Thus, effective regulation is necessary to ensure utilities spend at appropriate levels,” the report read.
The report also estimates that the plan, if approved, would increase average gas rates by 70% during winter months and average electric costs by 44% between 2020 and 2026. BGE disputes these numbers.
Cohen pressed the utility company over the environmental effects of the relocation program in the city hearing earlier this month. A representative of the utility company said “replacing centuries-old cast iron pipe significantly reduces methane emissions.”
He said Monday morning that he was not satisfied with BGE’s answers.
“To my mind, doing this project so aggressively is the exact opposite of a commitment from a utility toward a cleaner, greener, future,” the councilman said.
Cohen, who is running for City Council president, said there is a strong support in the council to hold BGE accountable and thinks the resolution is going to pass.
Alexopulos, the BGE spokesperson, said there have been “misrepresentations and factual inaccuracies about BGE’s multi-year plan.”
He also said that Cohen’s statement that the system upgrade is unnecessary and more costly is “inaccurate” and that a net-zero emissions future requires “a more robust electric system to support increased electrification integrated with an upgraded natural gas system.”
BGE also disputes the estimates from the Office of People’s Counsel, calling them inaccurate, misleading and incomplete.
The Office of People’s Counsel said in a statement that they stand by their estimates, and that the utility company is making “low usage assumptions and averages that blur the real impact on customers.” People’s Counsel David Lapp said in an email that BGE is understating the impact “because they are using money already owed customers to offset the real increase.”
“We share the councilman’s concerns about the substantial rate increases BGE is requesting,” Lapp wrote. “BGE’s proposal appears to represent a wish list of spending that primarily benefits investors and would impose substantial burdens on utility customers for investments that are not necessary to serve the needs of BGE’s customers.”
As Taylor Smith-Hams, an organizer of an advocacy group focusing on fossil fuels, stood in front of City Hall at Cohen’s press conference, cities across the country are under excessive heat warnings and advisories, she said.
“Our leaders know that we must transition away from fossil fuels towards renewable energy,” said Smith-Hams, who works at 350.org, an advocacy group founded by environmentalist Bill McKibben.
These infrastructure projects, like the controversial gas replacement project where the company is relocating internal regulators to the outside of people’s homes, will make it “much harder” for the state to move towards cleaner energy, she said, asking the PSC to reject BGE’s plan.
Cohen said he will attend the meeting with the City Council resolution, which he hopes it sends a “clear message” to the commission that what BGE is doing is “inappropriate.”
“After that, we’ll go from there,” he said.