Maryland Public Service Commission ends multi-year rate plan pilot program

BALTIMORE, Md. — Maryland's Public Service Commission announced on Thursday that it had ended the Multi-Year Rate Plan pilot program, finding that the program didn't accomplish the goals it intended.

"This MRP lessons learned pilot gave us a clear record of what worked, what did not, and what must change if forward-looking ratemaking is to deliver real value for Maryland customers," Commission Chair Kumar Brave said.

BGE had been the utility to test the program.

"Today, the Commission affirmed that forward-looking ratemaking does have a place in Maryland's regulatory future," a BGE spokesperson said in a statement. "We support efforts to strengthen and place more focus on customer value. BGE, Pepco, and Delmarva Power are committed to working with the Commission and stakeholders to develop an approach that supports keeping bills low, lights on, and gas flowing for customers across Maryland."

The 129-page order goes in depth on the findings from the pilot program.

"Although the framework shortened cost-recovery periods for utilities and offered some visibility into proposed capital and operations spending, the Commission did not find that those changes produced clear, measurable benefits for ratepayers," the PSC said in its statement.

They added that the multi-year rate program didn't give customers more predictable rates, didn't advance the state's goals for its energy policy, and didn't create more utility innovation.

"Accordingly, the Commission is sunsetting the pilot established by Order No. 89482," the PSC said in its statement. "The decision does not adopt the existing MRP framework as Maryland's standard ratemaking model. Instead, it establishes a structured review to determine whether a redesigned multi-year plan or another alternative form of regulation can satisfy Maryland law while protecting customers and supporting safe, reliable utility service."

The Office of the People's Counsel agreed with the decision.

“We applaud the PSC for putting an end to the current pilot program,” said Maryland People’s Counsel David S. Lapp. “As the PSC’s order confirms, MRPs have made rate cases more complex, increased administrative burdens, and frustrated regulatory oversight. Our experience also shows that customers paid much more under MRPs than under standard ratemaking that uses actual costs.”

Read the full document here.