BGE pauses Port Covington transmission work after multiyear cost increases; company cites site, design, routing and market pressure

BGE told the Education, Energy, and the Environment Committee that it has paused work on the Port Covington transmission portfolio to deepen engagement with Baltimore residents and community leaders after multiyear cost increases and routing challenges.

Michael Argentino, BGE’s principal project manager for the Port Covington portfolio, said the program replaces the 70-year-old Gould Street substation with a new Port Covington substation and installs underground transmission to link several substations and improve resiliency. He told the committee the portfolio "enhances the reliability for 45,000 existing customers throughout South Baltimore," including neighborhoods such as Cherry Hill, Ridgely's Delight, Federal Hill, Locust Point and Westport, and serves critical customers including the University of Maryland Medical Center and MTA assets.

Argentino identified four primary drivers of the project’s increased cost estimate: the selection of a single viable site that required a two-story enclosed substation (adding complexity and cost); engineering and design changes that required extra demolition and specialized civil work at Westport; prolonged efforts to secure an underground transmission route in coordination with Baltimore City and a developer (a process he said has taken about five years without an official path secured); and market conditions — citing roughly 27% higher labor costs and 50% higher material costs versus pre-COVID estimates and additional pressure from tariffs on imported high-voltage equipment.

John Frane and other witnesses emphasized that while FERC ultimately reviews prudency and cost recovery for transmission formula rates, many state-level mechanisms provide earlier transparency. Frane noted BGE’s multiyear plan filings and annual updates, which include scope and cost estimates and trigger stakeholder discovery. He also described the CPCN (Certificate of Public Convenience and Necessity) process and said some supplemental transmission projects undergo full CPCN review while others may seek a waiver depending on land, environmental or scope implications.

When lawmakers pressed whether customers are already bearing the $400 million estimate sometimes referenced for Port Covington, witnesses said customers are only charged for investments after assets go into service and are included in the annual rate filings; some distribution prework is in service, but the broader $400 million figure is not currently being recovered from customers. Frane added that formula-rate updates sometimes result in modest refunds or settlements — he cited a recent BGE transmission update settlement that produced a roughly $500,000 refund to customers.

BGE framed the pause as a temporary, deliberate step to engage locally, incorporate updated development plans and consider the committee’s recommendations while underscoring that the underlying reliability needs in South Baltimore remain. The company committed to delivering the work "safely, reliably and prudently" and to follow up with the committee on details, schedules and cost estimates.

The committee did not vote on any measures; members requested additional written materials and pledged further review of Port Covington and supplemental project practices across utilities.