Exelon utilities should return more than $32 million in overcollections to customers, OPC tells state regulators
BALTIMORE – The Maryland Public Service Commission should immediately require Baltimore Gas and Electric and Delmarva Power to refund more than $32 million in overcollections from customers, the Office of People’s Counsel said in recent filings with the PSC.
“The PSC established a framework to prevent utilities operating under a multi-year rate plan from benefitting—at ratepayer expense—from inaccurate cost forecasts that result in higher rates than necessary,” said People’s Counsel David S. Lapp. “The PSC created a path for a rate adjustment when there is a ‘significant disparity between [the utility’s] revenues and expenses to the detriment of ratepayers.’ That is the case here, and the PSC should require BGE and Delmarva Power to refund the excess revenues the utilities collected from customers.”
The utilities, both owned by Illinois-based Exelon Corp., reported their overcollections—$28 million for BGE gas and $4.27 million for Delmarva—in their respective “Annual Information Filings,” submitted in connection with their multi-year rate plans (MRPs). For the most recent year of their respective MRPs, the filings compare each utility’s forecasted, PSC-approved spending and revenues for the year and what the utility actually spent and collected in that year.
In past years, the PSC ordered refunds for Delmarva’s customers when the company’s Annual Information Filing demonstrated that it had collected more revenue from customers than what the Commission had authorized based on Delmarva’s forecast.
Upon learning of the most recent overcollections, OPC asked BGE and Delmarva to refund the overcollections to customers. Both companies declined, citing a provision in the recently enacted Utility RELIEF Act. As OPC’s filings point out, the Exelon utilities refused to provide the refunds even though the rate adjustments are separate from the reconciliation filings required by the MRP process and despite the General Assembly’s intent in the 2025 Next Generation Energy Act and 2026 RELIEF Act to allow reconciliations when they benefit customers.
“By refusing to issue the refunds customers deserve, the Exelon utilities seek to subvert both the preexisting MRP process unaffected by legislation and the letter and intent of recent legislation,” Lapp said. “The utilities are trying to keep funds over-collected from customers rather than return them to customers, contrary to Exelon’s statements about being focused on customer affordability.”
The utilities’ position that customers should not receive refunds of overcollections follows other actions by the Exelon utilities that undermine affordability protections for customers. Exelon recently asked federal regulators to dismiss a complaint from state agencies that could reduce transmission profits in light of the Utility RELIEF Act, saving customers more than $20 million per year. In another example, Pepco recently argued to the PSC that new limitations on employee compensation included in the RELIEF Act do not apply to their current pending rate request. The PSC rejected Pepco’s argument in an order issued last week.
Regarding the overcollections, OPC filed initial comments at the end of July, asking the PSC to require the utilities to issue refunds. On August 21, OPC filed reply comments. BGE and Delmarva also filed reply comments, arguing that the Utility RELIEF Act stripped the PSC of its authority to order refunds. OPC filed further comments today, briefly addressing the Exelon utilities’ interpretation of the statute and requesting a hearing on the matter.
For more on how alternative forms of ratemaking—like MRPs—that set rates based on utility forecasts of costs, rather than proven, actual costs, have accelerated rate increases for Maryland customers and frustrated effective utility oversight, see OPC’s comments to the PSC in its “MRP lessons learned” proceeding; OPC’s testimony on the RELIEF Act before the General Assembly, and OPC’s forecasted rates analysis.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers in electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies, and the courts.
* * *
|
