BGE says rent hike could mean $10 monthly bill increases for city customers

Baltimore’s decision to charge Baltimore Gas and Electric more to use the underground utility system means BGE will charge its customers more, too.

That was the argument utility representatives made Wednesday in a futile attempt to sway city lawmakers from increasing the rental fee for space in what’s known as the conduit.

City and BGE officials went head to head during a spending board meeting, their first public session since Mayor Brandon Scott announced he was reversing course on an existing deal with the utility.

Brittany Jones, a vice president for BGE, said the word “affordability” was noticeably missing from city discussions.

“We have to prioritize affordability,” she said. “Our customers are struggling to pay their current bills.”

Scott and other city leaders say BGE can absorb the conduit rental increase without burdening customers, many of whom are already struggling to pay their utility bills.

The Carroll County Board of Commissioners and the Harford County Chamber of Commerce did not testify but argued in letters that the city’s conduit rental rate increase would be an additional burden on their residents.

After discussion, the city’s five-member spending board, controlled by the mayor, unanimously approved the increase. It’s set to go into effect Jan. 1.

Under the previous agreement, struck in 2023 by Scott’s team, BGE took over primary responsibility for capital improvements to Baltimore’s 741-mile underground utility network in exchange for paying steeply reduced rent to the city. The arrangement allowed the utility company to profit off of the asset as though it was its own.

Last month, Scott announced he would return to a traditional rental arrangement with BGE in which the company pays to lease space in the system. He proposed increasing rental fees from $2.20 per linear foot to $4.05.

City officials say the conduit rent increase, which is to be paid by all companies that occupy space in the conduit, is necessary to make improvements to an aged utility system that is prone to explosive fires.

Stephen Salsbury, Baltimore’s deputy solicitor, said at the spending board hearing that a 2025 study found dangerous crowding in conduit manholes. The study also recommended installing sensors in the system to warn of dangerous levels of gases.

Scott asked Salsbury if the city could afford to make the recommended upgrades at the current rental rate.

“Bottom line, if we were to return to the $2.20 linear foot rate, we could not meet the recommendations in that report,” Salsbury said.

BGE has a request before state regulators for a rate increase that would amount to $8 per month for the average residential electric customer.

Jones said BGE would be forced to ask state utility regulators to increase its rates beyond that. Bills for BGE residential customers who live in numerous jurisdictions would face an estimated $1-$2 increase per month increase, she said.

Jones said staff working for state regulators previously suggested BGE could target a conduit-related increase only at Baltimore residents. In that scenario, city customers would face a $10 per month increase in their bills, she said.

City officials said such a targeted increase would be unprecedented for the Maryland Public Service Commission, which oversees utility rates.

“The PSC, in the history of the PSC, has never approved a rate increase for just one jurisdiction,” Scott said. “If they do approve your rate increase, it’s probably going to be for the entirety of the customer base. And for me ... my bill has already been increasing by more than $1 to $2 per month anyway.”

With the spending board’s approval of the rate increase, the city faces the strong possibility of legal action by BGE.

In 2015, when city officials last attempted to increase rates from 98 cents to $3.33 per linear foot, the utility company sued the city. The two parties settled a year later at a rate of about $2.20.

BGE officials have said previously they would prefer to settle out of court. Asked Wednesday if all avenues for negotiation were exhausted, Jones said, “the door is never closed.”