BGE customer gas equipment program to cost, on average, at least $19,000 per house over lifetime, OPC analysis shows
BALTIMORE – Baltimore Gas & Electric is spending more than $6,000 per house, on average, to install customer-specific gas equipment through its gas infrastructure replacement programs, a new Office of People’s Counsel analysis estimates. BGE plans to recover this investment—along with a return for investors—through customer bills over 35-50 years at an average per-house cost of at least $19,000, according to OPC. OPC submitted its analysis to the Public Service Commission in conjunction with the Commission’s proceeding on gas regulator installations in Baltimore City.
“The work BGE performs to install gas regulators, replace customer service lines, and relocate meters requires a significant per-house investment,” People’s Counsel David S. Lapp said. “This work is being done with little apparent consideration of the investment’s long-term viability. In fact, much of the investment may become obsolete, as policy and economics favoring electrification are expected to substantially diminish the role of gas.”
When BGE replaces a low-pressure gas “main” pipeline with a higher-pressure main as part of its “Operation Pipeline” program, the company installs a new service regulator on each property with gas service. BGE also often replaces the “service” pipe that runs from the gas “main” to the property and sometimes moves customer meters. OPC reviewed BGE data to estimate the cost of this work. The data show that the range for each structure varies significantly by project, from slightly under $5,000 to as much as $30,000. The average cost for post-June 2021 work is $6,343.
The equipment and labor costs for serving each house are intended to be recovered from BGE’s entire customer base over the duration of the life of the equipment, which lasts as long as 35 years for meters and regulators, to 50 years for the service pipes.
“BGE’s approach to implementing these projects is short-sighted and unreasonable,” Lapp said. “It assumes customers will remain on its gas system—consuming similar amounts of gas as they consume today—for many decades to come, and it risks potentially stranding hundreds of millions of dollars of investments in service pipes, regulators, and meters that serve no purpose long before their costs are fully paid for.”
To avoid unnecessary spending, OPC’s initial comments in the regulator proceeding asked the Commission to require BGE to provide customers at least two years advance notice before starting work to connect their homes with new gas infrastructure. That notice should include information about customer options to electrify their homes and to obtain financial support for electrification, OPC said.
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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