BGE’s first rate filing since 2015 ensures major investments in safety and reliability improvements receive thorough public review
BGE recently filed a request with the Maryland Public Service Commission (PSC) to review natural gas delivery rates to ensure they reflect the cost of the major safety and reliability improvements being made. Under the proposal, BGE is seeking to incorporate $63.3 million invested in modernizing the natural gas system in gas delivery rates. As proposed, the average residential gas and electric customer’s total bill would increase by 3.5 percent or $5.77 per month. BGE is not requesting an adjustment to electric rates. BGE last filed for a regulatory rate review in 2015.
Even as investments in major system improvements continue to enhance the safety and reliability of the natural gas system that serves almost 675,000 customers in central Maryland, the average residential gas customers’ total bills would remain lower than a decade ago under this proposal. Several factors have enabled bills to remain lower over the last decade, including significant decreases in natural gas commodity prices, customers being more efficient and using less energy overall, and most recently the federal tax reductions that allowed BGE to flow $103 million in annual tax savings to customers beginning in February of this year.
“We know that while any proposed increase may be a challenge, we also know that our customers appreciate the investments we are making to serve them better, and the continuous effort we make to reduce costs and pass through efficiency savings,” said Calvin G. Butler Jr., chief executive officer of BGE. “We’re delivering on our commitment to enhance the safety and reliability of the natural gas system, completing modernization projects on-time, on-budget and at a faster pace.”
BGE’s Strategic Infrastructure Development and Enhancement (STRIDE) gas infrastructure replacement program, now in its fifth year, has greatly accelerated the rate at which aging and leak-prone pipes made of outdated cast iron and unprotected steel materials are removed from service. In addition to making natural gas delivery safer and more reliable, significant environmental gains are being made through a reduction in greenhouse gas emissions. In the past three years alone, pipe replacements have led to a reduction of more than 1 million pounds of methane gas.
Under Maryland’s STRIDE law, the capped monthly charge is reset as investments are reflected in delivery rates. The company recently received approval of a second five-year STRIDE plan that will modernize gas equipment in more neighborhoods throughout central Maryland in 2019 through 2023. More than 150 miles of gas mains and more than 32,000 service pipes connecting customer properties to gas mains have been replaced with modern, durable gas equipment over the last four years of BGE’s STRIDE work.
Last year, the company invested $500 million in natural gas projects and maintenance. In addition to the STRIDE program, BGE investments in gas systems also include equipment inspections, repairs and replacements, preventive maintenance, and new gas main construction that are not part of the STRIDE plan. Investments not covered by STRIDE include replacement of sections of a major gas transmission pipeline that runs from western Baltimore County to Baltimore City, which first brought interstate natural gas to the region in 1949. Pipelines are being fitted with safety measures that allow for instrumented devices to travel through pipelines and provide data about the condition of the pipe. Crews are also relocating thousands of gas meters from inside garages to outdoors and installing concrete-filled steel bollards that protect the meters from vehicular damage.
BGE’s investments in the natural gas system contribute greatly to the regional economy, with the creation of approximately 600 jobs supported by BGE gas infrastructure projects.
Regulatory rate reviews are a public process led by the PSC, an independent state commission, that ensures transparency, public input and fair rates for all customers. A decision on the current proposed rates is expected from the PSC in January 2019.