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Maryland agency seeks pause on utility shutoffs as customers deal with hotter temperatures and higher rates

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Posted at 6:00 AM, Jul 02, 2024

BALTIMORE — It's hotter, utility bills are higher, and funding for several energy assistance programs ran out. A state agency believes this could be a deadly combination.

The Maryland Office of the People’s Counsel is asking state regulators to keep utility companies from cutting off customers who fall behind on their payments. They’ve filed a petition with the Maryland Public Service Commission seeking to pause service terminations until September 15, or require utility companies to include an affidavit affirming that a shut off does not pose a threat to the health or safety of the customer.

In their petition, the independent state agency advocating on behalf of Maryland utility customers, argued that there are inadequate customer protections during extreme heat.

“They're limited to 95 degrees, they don't include the heat index,” said David Lapp, the Maryland People’s Counsel.

According to state law, utility companies are restricted from shutting off a customer’s cooling service when the temperature is forecasted to be 95 degrees or above at 6 a.m. during a 72-hour period.

“Heat, we know, is actually more dangerous than the cold,” said Lapp. “And when customers don't have access to adequate cooling, there are real dangers that we're concerned about.”

Energy Assistance shortage
Adding to their concerns, is the shortage of assistance. The Maryland Energy Assistance Program (MEAP) and Gas Arrearage Retirement Assistance (GARA) ran out of funding on April 17. Benefits for those programs were suspended through the end of the fiscal year on June 30.

“The problem in the past has been that only about 25 percent of customers that qualify for energy assistance are actually receiving that assistance. So, we had legislation last year, that enabled those customers to automatically qualify for energy assistance when they qualify for other programs,” Lapp added.

That meant that more eligible applicants were automatically enrolled in the programs and funding failed to keep pace. The Maryland Department of Human Services saw a 57 percent increase in demand. A DHS spokesperson told WMAR-2 News that since April 17, a total of 30,945 MEAP and 4,486 GARA applications were denied. It's important to note that these applications may have been denied for other reasons, including applicants not meeting eligibility criteria.

"Skyrocketing" utility costs
At the same time, it's getting more expensive to heat and cool our homes. The OPC released a report last week detailing how gas and electric delivery costs have "skyrocketed" for most Maryland utility customers.

“What we found is that those delivery rates have increased substantially for a number of utilities,” said Lapp.

Customers are now paying more to have electricity and gas delivered to their homes. BGE's gas delivery rates tripled since 2010 from 26 cents/therm to 85 cents/therm in 2024. Columbia Gas rates increased 3.5 times the rate of inflation, increasing from 30 cents/therm in 2010 to $1.00/therm in 2024.

However, Washington Gas increased at about the rate of inflation, from 32 cents/therm in 2010 to 46 cents/therm in 2024.

Energy infrastructure upgrades are a major contributor to these rising rates, but the OPC report shows Washington Gas’ pace of spending has been much slower.

From 2019 to 2022, on average Washington Gas annually spent $360/customer on gas infrastructure, while BGE spent $570/customer and Columbia Gas spent $974/customer, according to the OPC’s report.

“How [is Washington Gas] getting by without making as many infrastructure improvements as BGE?” WMAR-2 News Mallory Sofastaii asked Lapp.
“It's an excellent question. And that's one of the things that we hope to raise in our report, because we're not seeing, you know, customers not getting gas from Washington Gas. And yet, their costs are literally about half of BGE’s costs today,” Lapp replied.

A BGE spokesperson said they can’t comment on the differences in rates and spending. BGE is voluntarily halting terminations of customers who were denied energy assistance through July 31. In an email, Richard Yost wrote:

"BGE’s investments in our systems enhance reliability, safety, and resiliency of the electric and natural gas systems serving customers throughout central Maryland. These customers are becoming more reliant on safe and reliable energy to power their lives and livelihoods while we are also facing increased threats to the resiliency of our infrastructure, including cyber intrusions and more frequent severe weather brought by climate change. The energy infrastructure investments we make now will ensure we can continue to meet our customers’ needs and lay the foundation for the State of Maryland to reach its goal of net zero emissions by 2045.

The Maryland Public Service Commission has full authority to determine the appropriate costs and prudent investments to be built into rates. Other stakeholders such as the Public Service Commission Staff and Office of People’s Counsel review and question our proposal throughout the transparent multi-year planning process. Once our multi-year plan is approved, the PSC has oversight of BGE, reviewing the work we accomplish compared to what we committed to, holding us accountable for meeting budgetary and performance standards.

Customers are benefiting from infrastructure investments by BGE. Since 2011, the number of outages a customer experiences have decreased by 39 percent and the average length of an outage has decreased by 52 minutes. Hundreds of miles of natural gas pipes are being replaced at an accelerated pace, which results in a safer, more efficient gas system. Once this gas system work is complete greenhouse gas emissions will be reduced by more than 210,000 metric tons annually—the equivalent of taking 45,000 gasoline-powered cars off the road."

The OPC believes increases in utility capital spending drives up utility profits as state law allows utilities to recover costs plus profits on an accelerated basis. “That accelerated recovery is attractive to utility investors and has fueled capital spending and corresponding rate increases,” according to an OPC news release.

It's a complex issue that Lapp wants the Public Service Commission and General Assembly to look at more closely. In the meantime, the heat is of immediate concern and how people can afford to stay cool.

On Friday, the utility companies submitted their response to the petition requesting an emergency order to prohibit service shut offs through September 15. Attorneys representing BGE, Potomac Electric Power Company, and Delmarva Power, said there are restrictions in Maryland protecting vulnerable customers from terminations. And moratoriums are harmful because customers can fall even more behind on their bills. Click here to read their full response.

It's now up to the Maryland Public Service Commission on whether they will grant or deny the petition. The PSC hasn't said when they'll issue a decision but knows time is of the essence as we are in the middle of summer.

July 1 marked the start of the new fiscal year and the Maryland Department of Human Services has started accepting and processing FY25 Office of Home Energy Program (OHEP) applications. OHEP works with utility companies to make sure customers with a pending application for MEAP on file will not have their service terminated.

Customers should reach out to their local Office of Home Energy Programs for assistance. Marylanders can also reach out to their local Department of Social Services to see if they qualify for an Emergency Assistance Grant, community based organizations like 2-1-1 Maryland, or contact their utility company directly.

Click here for additional information on how to apply for energy assistance.