Already weary from winter’s escalating utility bills, Maryland consumers face another round of energy cost hikes starting next week, this time from rising electricity supply prices.
The increases, which will show up mostly on the supply portion of customers’ electric bills, stem from an “unprecedented spike” in prices set by a “capacity auction” last year, Baltimore Gas and Electric officials said.
At auctions run by PJM Interconnection, the operator of the wholesale electricity market and 13-state regional power grid, companies make competitive bids to offer electricity generation that will meet regional demand three years into the future. Supply price increases as of June 1 are separate from, and in addition to, delivery fees that are paid to utilities and have rates regulated by the state’s Maryland Public Service Commission.
Increased demand from new data centers and other users in the mid-Atlantic and a constrained transmission grid have sent prices up. Additionally, PJM is requiring two Anne Arundel County power plants to be kept online until reliability measures are put in place.
Auction results become part of the price customers pay per kilowatt of electricity used, BGE said.
“This is not a BGE distribution rate increase; it’s an increase in the price of the actual electricity customers use,” said Nick Alexopulos, a BGE spokesman. “How much a customer’s bill will go up depends on the amount of electricity they use and will be more pronounced in extreme heat when customers use the most energy during summer.”
The Office of People’s Counsel has estimated bills could rise an average of $20 per month, or higher depending on usage, for BGE electric customers. BGE said this week that estimates of the peak month of July show customers could see their total gas and electric bills jump by $39 to $151, depending on energy use.
Such electricity increases amount to yet another jump in utility bills for consumers, many already feeling overburdened with expenses.
Teporah Bilezikian, a musician who lives in Baltimore’s Little Italy neighborhood, said she hasn’t been able to catch up from the winter’s rising gas delivery charges. Her monthly bills have nearly doubled, ranging from $600 to $800, she said.
“I’ve always been struggling to pay my bills here,” Bilezikian said. “I have a very large bill that I don’t know how I’m going to pay. …The one bill I haven’t been able to keep under control is my BGE bill — it’s outrageous.”
“This next rate hike is absurd,” she said. “All of us are asking: What is the commission doing for the citizens?”
Some consumer advocates and state officials are hoping federal regulators ultimately will step in to reverse any increases. Support has been growing for a state utility watchdog’s request that the Federal Energy Regulatory Commission “undo” price increases resulting from PJM’s 2024 auction.
PJM officials have said that Maryland for decades has imported electricity produced in other states to meet its needs, and that most of the eastern part of the state has lacked transmission infrastructure.
In a response to the complaint, PJM said allowing challenges to final auction prices right before or while they are in effect would created unneeded uncertainty and deter future investment in generation, harming consumers in those markets.
That complaint, filed in April by the People’s Counsel, a state utility watchdog, has won the backing of dozens of state lawmakers and the PSC, which said the price tag from the auction rose from $2.2 billion to $14.7 billion, costing ratepayers hundreds of additional dollars a year.
“Absent FERC action on our complaint before June 1, the BGE customer will see those increased rates starting June 1,” said Lapp, whose office has asked for an expedited case. “Customers could see substantial increases, depending on air conditioning use and if it’s a hot summer.”
The People’s Counsel complaint argued that grid operator PJM failed to include the state’s Brandon Shores and Wagner power generation plants in its auction, though the plants will continue operating for a period before being retired under a settlement agreement. That leaves out capacity value of the two plants, creates an artificial capacity shortage and raises prices, the complaint backers say.
Maryland customers are “paying twice for the same reliability,” Lapp said.
Dozens of Maryland lawmakers urged FERC to “reject those inflated costs as unjust and unreasonable,” in a letter supporting the complaint against PJM.
Kelly Richmond, an artist and resident of Baltimore’s Charles Village neighborhood, said recent rate increases, coupled with higher electricity prices, are out of hand. Her bill jumped from $163 in March 2024 to $362 in March this year.
“We can worry about who’s at fault later, but right now, someone needs to take action,” Richmond said. Ratepayers “have clearly expressed we cannot afford it.”
The increases are a heavy burden for those on fixed incomes, renters and people on public housing vouchers, said Laurel Peltier, a consumer advocate who helps low-income ratepayers find ways to lower bills.
“People with an old gas heater and people with old electric heaters are freaked out,” she said. “They’re still trying to figure out how to pay off this winter’s bills that have just been piling up. If you’re on a fixed income, you don’t have anything else to pull from.”
Lapp said Wednesday that he hopes federal regulators will intervene and reset prices. That would bring down costs for consumers along the regional grid by more than $5 billion, he said.
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