Customers to see higher electric bills this fall, depending on consumption, OPC advises
BALTIMORE – Most Maryland customers can expect higher electric bills this fall than last year, the Office of People’s Counsel advised customers today. The increases result from the 800 percent price spike in the 2024 “capacity market” auction held by PJM Interconnection, LLC to ensure electric system reliability. Those cost increases are hitting customers at different times depending on their electric utility but are in place now or will be soon for most Maryland customers.
“The overall effect of the increased costs from the PJM power auction largely will depend on weather and household consumption,” said Maryland People’s Counsel David S. Lapp. “Using less electricity wherever possible will help keep your bill down.”
The jump in the 2024 capacity market auction impacts the 2025-26 “delivery year,” running from June 1, 2025, through May 31, 2026. The costs of the auction show up in the supply portion of utility bills, and utilities have different schedules for when and how the costs will flow down to retail customer bills.
Following the auction last year, OPC issued a report estimating how the costs for the delivery year would impact monthly bills compared to the costs for the previous delivery year, which ran from June 1, 2024, through May 31, 2025, assuming the costs were recovered over the 12 billing cycles covering the delivery year. The report estimated the monthly costs, if paid over 12 billing cycles, to be about $18 dollars for Potomac Edison, $16 for Baltimore Gas and Electric customers, $14 for Pepco and SMECO customers, and $4 for Delmarva Power customers. The report’s estimated impact for Delmarva Power customers was lower because its capacity costs were already higher going into this year.
Utility customers will see the higher delivery-year costs over different periods. SMECO customers saw their increases begin in June, Pepco and Delmarva Power customers in August, and Potomac Edison customers beginning in October.
For BGE customers, a Public Service Commission order in late spring sought to avoid imposing any of the higher costs on customers during the summer and winter months when customer consumption and bills are usually higher. Avoiding any increases during the summer and winter months, however, means that BGE customers will see the increased costs across just six months of bills—three months in the fall (September-November) and three months in the spring (March-May 2026). That means typical BGE customers will experience an estimated increase of about $30 on monthly bills during the bridge seasons this fall and next spring while experiencing no additional capacity market costs during this past summer and the upcoming winter.
The 800 percent cost increase in the capacity market for the 2025-26 delivery year over the previous year resulted in part from PJM market rules that excluded as available supply in the auction the Brandon Shores and Wagner power plants located near Baltimore. PJM excluded the plants even though, as so-called “reliability must run,” or RMR, units, they continue to be available for several years until transmission projects to replace their reliability functions are completed. As documented in OPC’s report, the exclusion of the plants increased the overall auction results by as much as $5 billion.
After facing objections from OPC and others about its rules for future auctions, PJM eventually sought federal approval to change its rules to account for RMR units in future auctions. To support the rule change, PJM acknowledged flaws in its old rules, and in February 2025, the Federal Energy Regulatory Commission approved the rule change for future auctions, noting that it would “avoid the risk” that customers will “pay twice for the same capacity.”
OPC has a complaint pending with federal regulators about the 2024 auction results that are now increasing customer bills. If that complaint is eventually successful, customers would ultimately see refunds of portions of the increased costs.
The other major driver of the increased capacity costs is the rising power demands caused by data centers. Data centers can be developed faster than new generation supply can be built and thus drive up capacity market costs. According to one scenario run by PJM’s Independent Market Monitor, data centers drove up the auction cost for the 2025-26 delivery year by $9.3 billion, out of the total increase of about $12.5 billion from the previous auction.
For information on finding help to pay your utility bills, see OPC’s Get Help pages.
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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