Maryland Power Bills Rise Due to Utility Profits, Not Market Forces

As Maryland residents face escalating power bills during a sweltering summer, the blame has been placed on the competitive energy market. However, a closer examination of the data reveals a different narrative. According to a study by the Electric Power Supply Association and Energy Tariff Experts, power generation costs, which constitute less than half of the average electric bill, have actually decreased by 20% over the past decade when adjusted for inflation. The real issue lies in the transmission and delivery costs, which have seen a significant rise.

The Maryland Office of the People’s Counsel found that BG&E's monthly charges for delivering electricity have doubled since 2010, marking an average annual increase of 5%, far exceeding the inflation rate of 2.65% per year. This stark contrast is highlighted by Potomac Edison's modest 2.1% annual rate increase over the same period for Western Maryland customers. The disparity points to BG&E's monopoly on energy distribution as a key factor in the rising costs.

BG&E's parent company, Exelon, has committed to delivering annualized earnings growth of 5% to 7% through 2028 to its investors, a strategy that prioritizes shareholder returns over customer benefits. This commitment is facilitated by a regulatory model that guarantees BG&E a profit of 9.5 cents for every dollar spent on the electric grid, irrespective of the necessity of the investment. Examples of questionable expenditures include a $130 million substation for the stalled Baltimore Peninsula redevelopment and a $17.5 million contract for a Ford F-150 truck, both charged to ratepayers.

While BG&E has announced $15 million in temporary assistance for families struggling with high energy costs, this amount pales in comparison to the company's $527 million profits in 2024. The situation calls for greater transparency and accountability to ensure that utility investments serve the public interest, not just corporate profits. Without significant reforms, Maryland families will continue to bear the brunt of rising power bills, underscoring the need for leaders to address the root causes of these increases.