Maryland Power Bills Rise Due to Increased Transmission Costs and Utility Profits
Maryland residents face rising power bills primarily due to increased transmission and delivery costs by BG&E, driven by its parent company Exelon's profit commitments to investors, rather than generation costs.
As Maryland residents grapple with escalating power bills during the summer heat, the focus shifts to the underlying causes beyond the competitive energy market. A study by the Electric Power Supply Association and Energy Tariff Experts reveals that power generation costs, accounting for about 45% of the average electric bill, have remained stable over the past decade, even decreasing by 20% when adjusted for inflation. The real issue lies in the doubling of BG&E's monthly delivery charges since 2010, with an average annual increase of 5%, significantly outpacing the 2.65% average inflation rate during the same period.
The Maryland Office of the People’s Counsel highlights that BG&E's rate hikes are not matched by other utilities, such as Potomac Edison, which saw only a 2.1% annual increase. BG&E attributes these costs to reliability improvements, but the evidence points to Exelon's commitment to deliver 5% to 7% annualized earnings growth to its investors by 2028. This profit-driven strategy ensures BG&E a guaranteed 9.5% return on every dollar spent on the electric grid, incentivizing unnecessary expenditures, like a $130 million substation for the stalled Baltimore Peninsula project and billing customers for a $17.5 million Ford F-150 truck contract.
While BG&E has announced a $15 million assistance program for struggling families, this amount is less than 3% of its $527 million profits in 2024. The disparity between utility profits and customer burdens calls for greater transparency and accountability to ensure investments serve the public interest, not just shareholder returns. For more details on the study, visit https://www.epsa.org.