By MDBayNews Staff
Marylanders are being told—again—that their soaring BGE bills are the unavoidable result of markets, weather, or global forces beyond anyone’s control. That story is convenient. It’s also incomplete.
The uncomfortable truth is that Maryland’s utility shock is not primarily a failure of capitalism or bad luck. It is a failure of regulatory structure—one designed to socialize risk, guarantee returns, and leave ratepayers holding the bill with no meaningful escape.
A System Built to Approve, Not Restrain
At the center of this structure sits the Maryland Public Service Commission, an agency charged with balancing reliability, affordability, and fairness. In practice, however, the system has evolved into one where approval is procedural, and restraint is rare.
Multiyear rate plans lock in increases years in advance. Overspending is reconciled later and passed through to customers. Infrastructure investments earn guaranteed returns regardless of performance. Even programs sold as “savings” appear as permanent surcharges on monthly bills.
By the time ratepayers feel the impact, the decisions are already final—and the hearings long over.
Guaranteed Profits, Mandatory Participation
Maryland utilities don’t compete for customers. You don’t shop around for a better delivery provider. You don’t opt out of programs you didn’t request. You pay.
That monopoly structure might be defensible if regulators aggressively protected consumers. Instead, the framework virtually guarantees earnings for utilities like BGE’s parent company, Exelon, while insulating them from the consequences of bad forecasts, market errors, or policy miscalculations.
When costs rise:
- Utilities recover them.
- Regulators justify them.
- Ratepayers absorb them.
There is no equivalent safety valve for households facing inflation, stagnant wages, or fixed incomes.
The PJM Mess Exposed the Fragility
The recent chaos in the PJM Interconnection capacity market should have been a wake-up call.
A rules-based exclusion of Baltimore-area power plants—kept online for reliability but barred from bidding—artificially tightened supply and sent prices soaring. Billions in added costs followed, flowing straight to consumers.
But the deeper issue isn’t just PJM’s flawed rules. It’s that Maryland’s regulatory system automatically passes regional market failures downstream while offering ratepayers no corresponding protection or relief.
Risk is pooled. Accountability is not.
EmPOWER Maryland: Policy Goals, Ratepayer Costs
Energy efficiency programs under EmPOWER Maryland may have long-term benefits, but their structure reflects the same regulatory imbalance.
Participation is mandatory. Surcharges are unavoidable. Returns to utilities are often higher than on basic service. And while savings are projected in aggregate, individual households—especially renters and low-income families—may see little direct benefit.
When affordability concerns arise, the response is rarely reform. It’s assistance programs. In other words: ratepayers fund the policy, then fund the relief from the policy.
Who Actually Has a Choice?
Maryland’s energy debate often invokes choice, innovation, and sustainability. But for most households, the lived reality is far simpler:
- You cannot decline infrastructure spending.
- You cannot opt out of efficiency mandates.
- You cannot hedge against regulatory error.
- You cannot vote with your wallet.
You can only pay.
That isn’t a market. It’s a closed loop—regulated, approved, and insulated from consequences.
The Reform Conversation Annapolis Avoids
Real reform would require asking questions regulators prefer not to confront:
- Why are utility returns effectively guaranteed while household costs are not?
- Why are multiyear rate plans approved with limited off-ramps?
- Why do efficiency programs reward spending more than results?
- Why do data-center and grid-expansion costs fall disproportionately on residents?
So far, Annapolis has responded with messaging, not restructuring.
Bottom Line
Maryland’s utility crisis isn’t an accident. It’s the logical outcome of a regulatory model that prioritizes predictability for institutions over affordability for families.
Until lawmakers and regulators are willing to redesign that structure—introducing real cost discipline, accountability, and consumer protection—BGE bills will continue to rise, and officials will continue to act surprised.
Ratepayers deserve better than that performance.
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