Baltimore leaders have decided not to renew the city’s controversial agreement with Baltimore Gas and Electric that allowed the company to make infrastructure investments to the underground utility network.

Mayor Brandon Scott’s administration notified the utility company of its decision Friday via a letter. Officials are opting to negotiate a new deal with the utility company rather than automatically renewing the existing one, wrote Veronica McBeth, the city’s director of transportation.

McBeth said the agreement does not call for enough investment on BGE’s part.

The city’s decision to renegotiate was based on factors including the increasing cost of labor and materials and the system’s growing public safety needs, highlighted in a report probing a series of explosive fires in the underground system, McBeth said.

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BGE did not immediately respond to a request for comment.

The deal between Baltimore and BGE centers on the city’s 740-mile underground utility system, known as the conduit, which carries utility and telecom lines.

Previously, utilities including BGE — which takes up more than three-quarters of the conduit — paid the city rent to occupy space in the system. And Baltimore, rather than BGE, was responsible for capital improvements to the underground network.

In 2023, the Scott administration signed a deal that called for BGE to invest as much as $210 million in the city-owned system over six years. The agreement included an initial three-year term and an optional three-year extension. The deal was set to automatically renew at the end of the year unless the city notified the utility company by July 1.

Scott’s aggressive push for the agreement was controversial at the time. The city’s five-member Board of Estimates, which approved the deal, is essentially controlled by the mayor. He occupies a seat and gets two appointees. Comptroller Bill Henry and then-Council President Nick Mosby boycotted the February 2023 voting session on the agreement.

The Baltimore City Council held hearings to investigate the deal at the time.