BGE Gas Regulators Part of Decades-Long, $15 Billion BGE Spending Plan, OPC Customer Impact Brief Explains
BALTIMORE – Baltimore Gas & Electric’s installation of gas regulators on thousands of Baltimore residences is part of the utility’s massive spending on gas infrastructure that risks “stranding” billions of dollars in uneconomic investments, according to an impact analysis released by the Office of People’s Counsel today.
“It is long past time to evaluate the need and desirability of spending hundreds of millions of dollars each year tearing up our streets to add and replace fossil gas infrastructure,” said People’s Counsel David S. Lapp. “These investments are not compatible with long-term customer interests and the State’s climate goals. The spending on fossil fuel infrastructure represents a lost opportunity to help customers electrify their home energy use, save money, and help mitigate climate change.”
BGE’s gas regulator installation initiative is part of its long-term program to replace all of its infrastructure that existed as of 2013—the year the General Assembly passed a law called “STRIDE.” BGE’s “Operation Pipeline” program, part of STRIDE, includes installing gas regulators on thousands of customer properties to lower the pressure from the newly installed high-pressure gas mains so the gas can be used in customer appliances.
BGE plans to complete its STRIDE program around 2043, but customers will be on the hook to pay for it through the end of the century, at a total cost of $15 billion, OPC’s analysis shows. BGE’s STRIDE program is the utility’s largest category of capital spending. In 2023, BGE will spend about $160 million on STRIDE with a total cost to customers—after accounting for BGE’s returns—of about $576 million.
BGE’s Operation Pipeline is inconsistent with the ongoing shift towards electric heat pumps and other advanced electric technologies that are now more efficient and cost-effective for most residential customers, the analysis explains. As customers take advantage of those technologies—and as State and federal policies encourage electrification—gas sales can be expected to decline substantially. Those declines will cause huge rate increases, driving further electrification and leading to the infrastructure becoming uneconomic. At greatest risk are lower income families that are less capable of electrifying their home appliance use.
“BGE has 20 more years of spending to complete Operation Pipeline,” Lapp said. “By substantially curbing its program and planning for the inevitable decline in gas sales, we can save customers billions of dollars.”
OPC’s impact analysis is based on two gas reports issued in 2022, Maryland Gas Utility Spending: Projections and Analysis (Oct. 2022) and Climate Policy for Maryland’s Gas Utilities: Financial Implications (Nov. 2022), as well as its petition for gas planning filed with the Public Service Commission in February.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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