Baltimore Gas & Electric Co.'s (BGE) April filing to adjust standard-offer service (SOS) residential rates to reflect higher-than-expected PJM capacity auction clearing prices was the subject of a lengthy April 23 discussion at the Maryland Public Service Commission. Staff recommended accepting proposed tariff revisions with a June 1 effective date; the commission took the matter under advisement to weigh competing risks and pending federal challenges.

Staff presentation and proposal
Eric Delgado of commission staff told commissioners that BGE proposed adjusting SOS rates to reflect actual capacity costs from PJM’s third incremental auction for the 2025–2026 delivery year. Staff said the PJM final clearing price for BGE’s zone was $306.84 per megawatt-day — significantly above the proxy price used when suppliers bid for SOS — and that the difference would otherwise be recovered via BGE’s Rider 8 energy-cost true-up beginning in October. Staff argued adopting the tariff change with a June 1 effective date would allow the cost to be spread over 12 months rather than eight, reducing the immediate monthly impact for customers. Staff estimated a residential customer using 1,000 kWh could see an increase of about $15.84 per month if the costs were recovered through the energy-cost adjustment instead of the proposed tariff timing.

Concerns from commissioners and advocates
Commissioner Richard and several colleagues criticized PJM’s auction process and raised the possibility that the auction result was flawed. Commissioner Richard described the increase as “an unjust and unreasonable new cost on our ratepayers” and urged exploration of whether the entities that govern PJM should bear some responsibility. Multiple commissioners asked whether refusal to accept the tariff now would simply move the same charges to the October Rider 8 true-up — a scenario staff said would compress the recovery period and likely increase the monthly impact.

Michael Sammartino and Ryan Shue of the Office of People's Counsel (OPC) told the commission OPC had filed a complaint at the Federal Energy Regulatory Commission (FERC) on April 14 asking for expedited treatment and that any FERC determination could affect whether ratepayers ultimately bear the cost. Sammartino noted that even with expedited proceedings, refunds (if ordered) would not be instantaneous.

BGE's position
BGE representatives (company spokesperson on record) said the filing did not change the underlying pass-through structure adopted five years earlier: suppliers bid using a capacity proxy and actual capacity costs are trued up later. BGE argued the present filing only changes the timing and method of the true-up (recovering the known difference earlier and spreading it over 12 months) and that doing so is more transparent to customers. BGE emphasized that if FERC later orders refunds, funds would flow back through established mechanisms such as Rider 8.

Why the commission deferred
Commissioners expressed competing priorities: lessen immediate rate shock by spreading costs over a longer period versus holding action until the outcome of FERC complaints and potential PJM governance changes are clearer. Staff warned that declining the filing outright could discourage future SOS bidders or drive higher bids because suppliers would bear added risk. After lengthy discussion, the chair said the commission would take the filing under advisement and return with guidance on whether and when to accept a tariff change.

Key specifics from the record
- PJM third incremental auction clearing price for BGE zone: $306.84 per megawatt-day (staff statement).
- Estimated bill impact in absence of staff’s timing proposal: residential 1,000 kWh customer could see roughly $15.84 per month increase (staff estimate).
- OPC filed a complaint with FERC on April 14 seeking expedited treatment and requested a FERC determination by May 31; staff and OPC said refunds (if any) could take longer to process.

Next steps: The PSC will consider the tariff filing further and indicate whether it will accept a tariff now or later after staff reviews competing factors (timing, customer outreach, potential FERC action and PJM governance changes).