OPC asks regulators to open investigation into BGE’s capital expansion plans on the Baltimore Peninsula
BALTIMORE – A regulatory proceeding is needed to obtain information and add transparency to Baltimore Gas and Electric’s plans to spend more than $500 million on transmission and distribution infrastructure on the Baltimore Peninsula because the anticipated development is foundering, the Office of People’s Counsel said in a filing to the Maryland Public Service Commission today.
“Customers face paying billions of dollars in their utility bills over the coming decades for all the costs related to BGE’s Baltimore Peninsula investment plans,” said Maryland People’s Counsel David S. Lapp. “But BGE based its plans on development that is not happening as anticipated, and BGE has not identified any other customer growth to justify its level of spending.”
As The Baltimore Banner has documented over articles beginning last summer, BGE initially planned the massive build-out of electric infrastructure based on Under Armour’s ambitious 2016 plans to redevelop the area into a “mini-city.” But after ten years, about one-tenth of the planned development has been built, about half of the retail and office space that has been built and was to drive the anticipated electricity demand is empty, and Kevin Plank’s development company recently announced it was exiting from the rest of the project.
If the large commercial customers don’t materialize, much of the billions of dollars added to future rates for BGE’s infrastructure spending likely will be picked up by residential customers instead—adding to BGE residential customers’ already significant burdens due to high rates, OPC’s filing points out, noting that the projects also involve significant disruptive work that will impact customers and the community over several years.
OPC’s filing explains that customers are disadvantaged by the piecemeal basis in which the distribution and transmission spending is happening—including multiple Commission dockets and filings, along with massive transmission expenditures that are subject to minimal review by the regional transmission organization, PJM, or by federal regulators.
BGE has been incorrectly telling customers that its Baltimore Peninsula work plans are reviewed and approved by the Commission, OPC’s filing points out. Transmission projects are federally jurisdictional and not subject to Commission approval except under state siting laws that do not apply to the underground transmission lines that BGE plans for the project, OPC’s filing explains. (House Bill 928 (Del. Embry) would remove the siting exemption in state law for underground transmission lines.)
Without Commission action, OPC’s filing says, BGE’s massive transmission investments will evade any meaningful cost-effectiveness review. PJM did not propose the infrastructure work, but BGE presents the work to PJM as “local” projects. Local projects fall into a well-known regulatory gap that allows them to avoid federal cost-effectiveness review. That regulatory gap is the subject of an OPC complaint at the Federal Energy Regulatory Commission.
“Ratepayers cannot be protected when information comes in bits and pieces with no ability to holistically understand the full scale, purpose, and need for hundreds of millions of dollars in capital infrastructure on the Baltimore Peninsula,” Lapp said. “Customers deserve an investigation to understand the scale and scope of the work and how much these investments will add to their distribution and supply rates.”
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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