Baltimore Gas and Electric Company Seeks 7.6 Percent Rate Increase for Natural Gas Operating Revenues

Strategic Insights -

Baltimore Gas and Electric Company (BGE) has announced its plan to file for a 7.6 percent increase in natural gas operating revenues with the Maryland Public Service Commission. If approved, the rate increase would amount to $30 million and result in a monthly increase of $4.74 for the typical residential gas customer using 90 therms per month. BGE officials argue that the increase is necessary to fund operating and capital improvements to the existing gas system, as well as to recoup costs associated with its expansion.

Key Takeaways:

  • BGE plans to file for a 7.6 percent increase in natural gas operating revenues with the Maryland Public Service Commission.
  • The rate increase would amount to $30 million and result in a monthly increase of $4.74 for the typical residential gas customer using 90 therms per month.
  • The increase is necessary to fund operating and capital improvements to the existing gas system and to recoup costs associated with expansion.
  • BGE has spent $116 million on gas system improvements and expansion over the past three years.
  • The company aims to expand its gas business by approximately 16,000 customers annually to meet growing demand for gas service.
  • Over the past 10 years, gas base rate decreases have virtually offset increases, resulting in a 14 percent reduction in net gas prices for the typical residential customer.
  • Since the last rate request in 1992, BGE has implemented cost-cutting measures, resulting in a $5 million reduction in gas operations and maintenance costs.
  • BGE's gas rates have historically been below the regional average, and customers will continue to enjoy this regional price advantage even if the full rate increase is granted.
  • The company has created a separate gas division and developed a comprehensive strategy to align its natural gas business with the restructured interstate natural gas industry.

Statistics:

  • BGE plans to seek a 7.6 percent increase in natural gas operating revenues.
  • The rate increase would amount to $30 million.
  • The monthly increase for the typical residential gas customer would be $4.74.
  • BGE has spent $116 million on gas system improvements and expansion over the past three years.
  • The company aims to expand its gas business by approximately 16,000 customers annually.
  • Over the past 10 years, gas base rate decreases have resulted in a 14 percent reduction in net gas prices for the typical residential customer.
  • BGE's gas operations and maintenance costs have been reduced by $5 million since 1993.

Sources:

  • PRNewswire: "Baltimore Gas and Electric Co. Announces Plans to File for 7.6 Percent Rate Increase in Natural Gas Operating Revenues"
  • Baltimore Gas and Electric Company: Arthur J. Slusark, director of public information, 410-234-7433.