BGE is requesting an average $8-per-month rate hike for its electric customers beginning next year, but the Maryland Office of People’s Counsel (OPC) has plans to challenge the proposal.

OPC is an independent state agency that advocates for utility customers and ensures utility rates remain reasonable.

BGE’s rate increase request was submitted to the Maryland Public Service Commission (PSC) for approval, and hearings will ensue over the next several months.

The PSC says a decision on BGE’s application is expected in January 2027, and until then, electric rates will remain the same for BGE customers.

The rate case does not include a utility bill increase for gas customers.

While OPC is consistently litigating rate cases on behalf of utility customers, Maryland People’s Counsel David Lapp says the work has become particularly demanding over the past decade.

“What we've seen in recent years for BGE is just rapidly growing profits. Their profits in 2025 were $578 million. They've about doubled over the last 10 years and gone up even much higher than that since Exelon's acquisition in 2012,” Lapp said.

Exelon owns BGE, Pepco and Delmarva Power, three of the main electricity and gas providers within Maryland.

Lapp says OPC is still reviewing BGE’s rate hike request, but he says the office will “certainly be challenging” the utility’s proposed return on equity of 10.4%.

“I can tell you now that that is too high, and that represents a level of profits that competitive companies don't seek or don't obtain,” Lapp said. “BGE is a monopoly with captive customers and certainly not subject to competition, and competitive companies earn returns that are substantially lower than BGE’s current 9.5%. So 10.4% is really reaching for the stars.”

Consumer advocates like Maryland PIRG Foundation Senior Advisor Emily Scarr are also displeased with the request.

“We plan to review this latest rate hike request in detail, but have serious concerns that as BGE rates and profits skyrocket, customers are facing systematic failures of customer service and safety. We call on the Commission to take a serious look at BGE's spending and reject its request for an excessive profit rate” Scarr said in a statement.

In its press release announcing the $156 million rate increase request, BGE said the figure is the minimum level of investment the company believes is necessary to maintain a “safe and reliable” system.

This rate case was filed as a “historic test year case,” which is a new requirement under the Maryland General Assembly’s landmark energy policy overhaul of 2026, dubbed the Utility RELIEF Act.

Previously, Exelon utilities had been utilizing “forecast test years,” which allow the companies to make a case for what they think they’ll spend in the coming years and adjust rates accordingly, subject to PSC approval.

The new law put a one-year moratorium on forecast test years, and in the meantime, the PSC will study whether allowing the use of forecast test years, historic test years or a hybrid model is in the best interest and protection of ratepayers.

The bill also keeps utilities from coming back to the PSC and asking if it can raise customer rates after spending more on building or renovating transmission infrastructure than previously approved.

Additionally, it requires utility companies to reimburse ratepayers if it spends less than it anticipated on infrastructure build-out.

But Lapp already has concerns that some elements of BGE’s rate request are similar to a form of reconciliation, like proposing a storm restoration expense rider.

“Essentially that means that BGE will be able to collect storm expenses as they occur without any incentive to minimize those costs, either by preparing its system in advance of storms to minimize the costs of storm damage, or to limit the amount that it costs to recover from storms,” Lapp said.

BGE refutes this, arguing the utility prepares for storms ahead of time, but it says the severity of storms and their cost have been unpredictable.

“The governor signed the Utility RELIEF Act into law earlier this year and now OPC is trying to move the goalposts. BGE is following the law as written. At a time when extreme weather like this past weekend is more frequent, having the storm rider is critical to maintaining a consistent level of storm response for customers,” said BGE spokesperson Nick Alexopulos in a statement.

Compliance with other Utility RELIEF Act provisions are also causing OPC and Exelon utilities to clash.

All Maryland utilities are voluntarily members of the regional electric grid known as the PJM, which allows them to cash in on certain financial incentives from the Federal Energy Regulatory Commission (FERC).

But the Utility RELIEF Act now requires utilities to be a member of PJM, which is expected to save ratepayers around $20 million annually by reducing each company’s return on equity by 0.5%

OPC sent a letter to each utility company in early June, asking them to file with FERC to give up the financial incentive before July 1.

House Speaker Joseline Peña-Melnyk (D-Anne Arundel and Prince George’s Counties) backed up the letter, saying in a statement, “We will be watching and assessing whether the utilities decide to be cooperative or confrontational on this.”

No utility voluntarily filed an adjustment with FERC before the Utility RELIEF Act effective date on July 1, which prompted OPC, the Maryland Energy Administration and the PSC to file a federal complaint the next day.

“We asked them to do that voluntarily, so that we, as the state, we collectively, the state of Maryland, don't have to spend a lot of resources litigating that issue at FERC, and potentially in the courts if they challenge it in the courts, and the utilities have not done that,” Lapp said.

Exelon says it is “still reviewing the Maryland Public Service Commission’s recent filing with FERC.”