Natural gas meter with pipe on the wall. (Photo by Bill Oxford/Getty Images)
In 2025, the average BGE bill for a home that has a gas furnace, will be an astounding $3,750. In 2021, the same bill was about 50% less. There’s a practical legislative bill that will slow the rise of home heating bills.
Open your January utility bill and you’ll know why there’s lots of talk about expensive energy bills. Are rates higher due to our PJM electricity grid? Is it BGE’s “Operation Pipeline” spending? Could the new retail energy reform bill SB1 be to blame? Clean energy? Is it because we import electricity? More importantly, what can be done to give consumers rate relief?
Last year’s SB1 consumer retail energy reform went into effect on Jan. 1, 2025, and consumers are getting rate relief. Because most of the remaining 285,000 residential third-party energy contracts are on pricey variable rates. SB1 eliminated variable rates and these families will see their electricity and gas supply rates drop to regulated levels in the next few weeks. Thanks to SB1, those families will save about $200 million in 2025.
In 2025, utility bills are climbing for two reasons.
Every family, in every utility service territory will pay higher electricity supply rates because wholesale rates are higher. Statewide, electricity supply rates jumped from 7 cents per kilowatt hour in 2021 to 12 cents in 2024. In 2025, electricity supply rates will jolt to roughly 13 cents per kilowatt hour because of the mismanaged PJM capacity auction. While painful, this rate increase is hopefully temporary, and largely out of state legislators’ and regulators’ control.
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Yet state legislators and regulators have a lot of control over utility delivery rates. Both electricity and gas regulated delivery rates have risen, a lot, far outpacing inflation. Owned by Exelon, BGE’s 1.2 million electricity and 660,000 gas customers, as well as Pepco’s 553,000 electricity customers’ delivery rates have increased a lot.
Electricity and gas delivery rates are higher mostly due to recent and massive utility spending on profitable capital infrastructure. Utilities leaned on two public policies, the 2013 STRIDE law and the Multi Year Rate Pilot, that dialed-up the utility financial incentives to overspend.
A family that lives in the BGE territory and heats its home with a gas furnace now pays two-thirds of its gas bill to BGE delivery, and one-third for the actual gas supply commodity. A decade ago, it was the opposite.
BGE customers have seen the highest gas and electric delivery rate increases, and the other utilities aren’t far behind. Check out today’s energy rate issue with this customizable “What’s My BGE Bill? How Does it Compare to 2021, 2024 and 2025?” Enter your home’s electricity and/or gas usage, and see the bill estimates by year. BGE’s 660,000 families whose homes use gas are the “canary in the coal mine” accounts — their January BGE bills will be rough with this cold snap.
BGE has spent $1.5 billion so far on their “Operation Pipeline” replacement program which was enabled by the STRIDE law. Washington Gas accounts won’t be too far behind if the PSC grants their STRIDE spending wishes.
The time is ripe for the legislature and PSC to intervene and pursue consumer rate relief.
Del. Elizabeth M. Embry’s (D-Baltimore City) HB419, cross filed with Sen. Mary Washington (D-Baltimore City), the STRIDE Ratepayer Protection Act, is a smart compromise that will slow down future gas rate increases, especially for Washington Gas accounts. This bill seeks to tighten the types of future gas infrastructure investments requested under the 2013 STRIDE law. Without intervention, gas pipeline replacement spending is on track to cost Maryland’s gas users $40 billion over decades. Yes, that’s $40 billion.
The 2013 STRIDE law is so open-ended that it includes no safety, gas leak or spending standards. Often touted as needed for safety, STRIDE has resulted in pumped-up shareholder profits via profitable gas capital spending with no change in safety. According to federal pipeline reporting, 67% of gas incidents are due to “excavation damage, outside force damage and incorrect operation.” Old cast-iron pipes, as of today, are about 4% of incidents. By adding cost constraints and safety requirements to the law, HB419 will help deliver on safety, while lowering future gas delivery prices.
It’s time for a more balanced gas system rebuild. As energy costs continue to rise, it is crucial for policymakers to balance necessary infrastructure improvements with the financial well-being of Maryland residents. Legislative measures like HB419 represent practical steps toward achieving this balance and providing much-needed relief to consumers.