What's Happening?
Maryland’s Office of People Counsel (OPC) has filed two complaints against Exelon utilities, including Baltimore Gas and Electric (BGE) and Delmarva Power, alleging they owe ratepayers tens of millions of dollars due to overcollections and new state laws.
OPC is advocating for the refund of a combined $32 million in overcollections to gas customers. BGE's overcollection of $28 million occurred in 2025, during the second year of its multiyear rate plan approved by the Public Service Commission (PSC) in 2023, while Delmarva Power overcollected by approximately $4.3 million in the same year. Exelon subsidiaries are contesting these claims. The Maryland General Assembly banned reconciliation for future multiyear rate plans in 2025 as part of the Next Generation Energy Act (NGEA) to combat rate hikes. Subsequently, the Utility RELIEF Act was passed in 2026, clarifying that utilities cannot file for reconciliation that would result in additional charges to customers. However, BGE argues that it lacks a legal framework to return overcollections from its 2023-approved plan, as the Utility RELIEF Act applies to plans approved after January 1, 2026.
Why It's Important?
This dispute highlights a critical conflict between utility companies and consumer advocates over ratepayer funds and the interpretation of state laws. The $32 million in question represents a significant amount for Maryland ratepayers, and the outcome will determine whether these funds are returned to customers or retained by the utilities. The core issue revolves around the legal interpretation of the Utility RELIEF Act and whether it mandates refunds for overcollections from rate plans approved before 2026. The OPC, supported by lawmakers like Chair Marc Korman, argues that the PSC has the authority to order such refunds and that utilities can voluntarily return funds. This case will set a precedent for how overcollections are handled under multiyear rate plans, impacting consumer trust and the financial obligations of utility companies. It also underscores the ongoing challenges in balancing utility profitability with consumer protection in a regulated market.
What's Next?
The Maryland Public Service Commission (PSC) is expected to call a hearing to address the Office of People Counsel's (OPC) complaint regarding the overcollections. The PSC will need to rule on the legal interpretations of the Next Generation Energy Act (NGEA) and the Utility RELIEF Act concerning the refunding of overcollected funds. The outcome will clarify the responsibilities of utilities for past overcollections and the extent of the PSC's authority to mandate refunds. Additionally, OPC, the PSC, and the Maryland Energy Administration (MEA) have filed a second complaint with the Federal Energy Regulatory Commission (FERC). This complaint seeks to require seven investor-owned utilities in Maryland, including BGE, Delmarva Power, and PEPCO, to reduce their profit levels by removing a 0.5% 'RTO adder' on their return on equity (ROE) for transmission infrastructure. This adder was a voluntary incentive for joining a Regional Transmission Organization (RTO), which became mandatory for Maryland utilities on July 1. Exelon is challenging the legality of this Maryland legislation at the federal level, and this litigation could take years to resolve.
Beyond the Headlines
The legal battles initiated by the Office of People Counsel (OPC) against Exelon utilities in Maryland reveal deeper systemic issues within utility regulation and consumer advocacy. The debate over the $32 million in overcollections underscores the complexities of multiyear rate plans, which aim to provide predictability but can lead to discrepancies between projected and actual costs. The differing interpretations of the Utility RELIEF Act highlight the need for clear, unambiguous legislation to protect consumers from overcharges. Furthermore, the challenge to the 'RTO adder' at the federal level reflects a broader effort to reduce utility costs for ratepayers by eliminating incentives that become redundant once RTO membership is mandated. This case could influence how other states approach utility regulation, particularly concerning profit margins and the return of excess funds to customers. It also emphasizes the crucial role of independent state agencies like OPC in holding powerful utility companies accountable and advocating for the financial well-being of residential consumers.
