Maryland
Commentary: Time for Maryland utility customers to stop subsidizing fossil fuels – Maryland Matters
By David Lapp
The writer is Maryland People’s Counsel.
“A subsidy is a benefit given to an individual, business, or institution, usually by the government.” — Investopedia.com
Even as it searches high and low for funds to support ambitious climate goals, the state is forcing gas utility customers to subsidize billions of dollars in fossil fuel infrastructure spending.
In competitive markets, companies don’t spend billions of dollars on long-lived assets without believing they have a product customers will want for a long time. Absent strong future demand, the investment won’t be profitable and could lead to investor losses and, ultimately, bankruptcy.
But those competitive forces that discipline corporate spending are absent for gas utilities. By law, utilities are insulated from competition, and their investors face few of the risks that competitive businesses face. That insulation is compounded by the counterintuitive way gas utilities enhance their profits — by spending more customer dollars on infrastructure, usually gas pipes. Utilities recover those costs, plus profit, regardless of how much demand there is for the gas that those pipes deliver.
This way of profiting means that Maryland’s gas utilities have an interest in disregarding — and obscuring — the mounting customer costs of spending billions for gas infrastructure despite widely accepted projections of substantial declines in gas consumption due to electric technologies and climate policy.
Consider, for example, what is evident from proceedings before the Public Service Commission (PSC). Utilities report only the short-term impacts of their spending on customer costs. And they fail to consider that projected declines in gas consumption diminish the need for infrastructure spending — or whether lower-cost alternatives to such spending are available.
Our office’s reports provide the only data showing how this massive spending on gas infrastructure has impacted and will impact utility customers. No Maryland gas utility — nor the PSC — has provided its own data or projections.
Quite the opposite, in fact. The utilities are willfully blinding themselves to the future:
- Washington Gas, the state’s second-largest gas utility, admitted in its recent rate case that it has “[n]o analyses, documents, or studies. . . forecasting the expected gas usage of its customers over the next 30 years” — even though it expects customers to pay for its infrastructure investments for much longer, up to 80 years.
- Columbia Gas, Maryland’s third largest gas utility, recently said it is “not aware of any heat pumps currently available that would require no back-up heating system” — a hard-to-swallow statement given the availability of such heat pumps in Maryland and across the country. (This author has one that performed quite well without backup during our recent cold blast.)
- Baltimore Gas and Electric, Maryland’s largest gas utility, is spending more than $1.25 million on gas infrastructure every single day. BGE acknowledges that in the future its distribution infrastructure won’t be used for fossil gas but instead to “deliver something different.” No one — including BGE — can explain how alternatives like landfill gas or hydrogen can be cost-effectively substituted for fossil gas at scale.
No business operating in a competitive environment would risk spending vast sums on long-term infrastructure to deliver an undetermined “something different” or without considering alternatives and competition from other technologies.
Utilities can ignore these realities — but only if government regulation is lax. As the Maryland Supreme Court has observed, for utility monopolies, “extensive government control” over prices, services, and operations “takes the place of competition and furnishes the regulation which competition cannot give.”
The government’s failure to “control” gas utilities by replicating the forces of competition means that captive customers are paying for infrastructure that would never be built in a competitive market. This amounts to a massive state subsidy for fossil fuel infrastructure being foisted on state utility customers.
It’s past time for the General Assembly to address these gas utility subsidies. Right or wrong, the PSC recently declared that it has “limited” options to curb the gas utility spending on gas infrastructure “[u]ntil the General Assembly enacts changes to the STRIDE statute” — referring to the 2013 law that declares as its purpose the acceleration of gas infrastructure replacement work. The gas utilities agree, with BGE recently telling the PSC that it “should not move forward until the Maryland General Assembly makes future state policy decisions related to natural gas service.”
It is imperative that the legislature act now. Each day results in additional spending and locks repayment plus utility profits into rates for many decades to come.
An initial, modest step is to enact The Ratepayer Protection Act (SB 548/HB 731), legislation that would modify STRIDE in line with a Maryland Commission on Climate Change recommendation approved by an overwhelming vote, with broad and universal support, including from cabinet agencies, and opposition only from fossil fuel interests.
Sponsored by Sen. Charles E. Sydnor III (D-Baltimore County) and Del. Elizabeth Embry (D-Baltimore City), the bill requires gas companies to prioritize public safety and perform evaluations of cost-effective alternatives as a condition of obtaining profitable accelerated cost recovery for pipe replacement. These are modest and logical requirements that should already be part of the law.
Regulation of public utility monopolies is not self-executing; the state — the PSC and the General Assembly — must exercise its “extensive control” over utility monopolies. Otherwise, the utilities’ private interests overtake the public interest. Continued State inaction on gas infrastructure spending means continued windfalls for gas utility investors — windfalls from subsidies paid by captive utility customers. Utility customers deserve better.
Senate Bill 548 will be heard Thursday at 1 p.m. in the Committee on Education, Energy and the Environment. House Bill 731 will be heard on Feb. 29 at 1 p.m. in the Economic Matters Committee.
One of the most unique ships featured in Sail250 Maryland and Airshow Baltimore can be found docked at the Baltimore Peninsula.
USS Marinette LCS25 is one of the most functional ships in the Navy fleet. At 370 feet long with 80 crew members, the ship has a helicopter landing pad and hangar, two rib boats in the belly of the vessel, and heavy artillery, including a cannon.
The ship has four engines, two of which are like jet engines, meaning it can sprint ahead of other vessels to intercept watercraft. It can also truck side to side and spin 360 degrees with controllable reversing and steering deflector buckets attached to the stern of the jet propulsion system. It can also traverse the littoral zones, water close to shore, and navigate waters as low as 15 feet deep.
“Where we shine is our ability to operate where other ships can’t,” said Cdr. Brian Sims, the ship’s executive officer. “For a 370-foot ship, one of the smallest in the fleet, it packs a punch. We can go 40 plus knots.”
The ship is used in counternarcotics missions primarily on the East Coast and in the Caribbean.
It is based in Jacksonville, Florida, but was built in Marinette, Wisconsin, which is where the ship gets its name. It began operating in 2023 and has yet to deploy. The ship can be out on the water for weeks or even months.
“We go out and find drug trafficking individuals and intercept, and the Coast Guard then takes over and arrests,” Sims said.
The pilot house is where the ship truly shines. An officer and junior officer monitor the radar and navigation, while another sailor sits at the helm and oversees steering the vessel and monitoring the engines.
“This is a very unique design for Navy ships,” Sims added.
The ship also hosts several heavy artillery pieces, including a cannon on the bow with different types of rounds to combat different threats. It can fire 220 rounds in a minute.
With its rich Naval history, Baltimore is playing host to some of the Navy’s finest, and the crews are equally as excited to be here in Maryland, the backbone of the Navy, celebrating 250 years of American history.
“Baltimore is a fantastic city, steeped in maritime tradition. Of course, we have Fort McHenry that we sailed past and rendered honors to when we arrived,” Sims said. “Having the ability to be in this role in this position on board this ship to celebrate the nation’s 250th, it’s an absolute honor, and one that, one that gives us all pause, and lets us reflect on where we’ve come as a nation.”
As Maryland families head into another hot summer, many are about to receive an unpleasant reminder of just how badly some state leaders failed to address Maryland’s growing energy problems this year.
Higher energy bills are not coming by accident. They are the predictable result of years of poor planning and a continued refusal by Democratic leadership in Annapolis to confront the real issue facing our state: Maryland does not produce enough electricity to meet its own growing energy needs.
Instead of seriously addressing that challenge during this year’s legislative session, Democratic leaders celebrated passage of the so-called Utility Relief Act (House Bill 1532), which offers Marylanders roughly $12 in savings per month. At a time when families are facing soaring energy costs driven by a massive shortage of reliable in-state power generation, that is not meaningful relief. It is a political talking point designed to avoid the larger conversation Maryland desperately needs to have.
Our state imports nearly half of the electricity it uses. Nearly half of the power keeping homes cool, businesses operating and communities functioning every day comes from outside our borders. Yet even as demand for electricity continues to rise, Maryland continues falling behind on building the reliable generation capacity needed to support our future.
That is not a serious long-term strategy.
Families across Maryland are already struggling with inflation, rising housing costs and economic uncertainty. Energy bills are becoming another major financial burden for working families, seniors and small businesses. But instead of focusing on increasing reliable power supply, meaning fully lowering consumer costs, and strengthening Maryland’s long-term energy security, Annapolis continues offering temporary fixes that fail to address the underlying problem.
The reality is simple: Maryland needs more power generation, and every responsible energy source should be part of the conversation. Natural gas, nuclear, renewables, battery storage, clean coal and emerging technologies all have a role to play in creating a more reliable and affordable energy future for our state.
Maryland also needs a broader conversation about the role experienced infrastructure providers and utilities can play in strengthening reliability and supporting future generation needs. These are organizations that already manage the systems Marylanders depend on every day and understand the long-term planning required to maintain dependable service.
Reliable and affordable energy is not a partisan issue. It is a basic requirement for economic growth, business investment and everyday quality of life.
As summer begins and air conditioners start running around the clock, Maryland families will once again be reminded that energy policy decisions made in Annapolis have real world consequences.
Unfortunately, they are paying for those consequences every month.
Del. Jason Buckel is the Minority Leader of the Maryland House of Delegates and represents Allegany County in the Maryland General Assembly.
MARYLAND (WBFF) — A group of Republican candidates, a voter, and an election-integrity organization are asking an Anne Arundel County Circuit Court judge to stop the state from certifying primary election results until election officials contact every voter whose original ballot was rejected and allow them to correct the problem.
The lawsuit, filed in Anne Arundel County Circuit Court against the Maryland State Board of Elections, comes a month after state election officials acknowledged that some Maryland voters were mistakenly mailed ballots for the wrong political party and sent replacement ballots to affected voters.
The ballot error affected voters who requested physical mail-in ballots for the June 23 primaries.
The Maryland State Board of Elections said its vendor, Taylor Print and Visual Impressions Inc. (TPVI), mailed some of the voters’ ballots for the wrong political party, but the administrator said the board’s vendor couldn’t identify which voters received erroneous ballots. Over 500,000 Maryland voters had requested mail-in ballots, most of them in Montgomery, Baltimore, Anne Arundel and Prince George’s counties, and Baltimore City.
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Read the full story on The Baltimore Sun.
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