Maryland Public Service Commission Intervenes in Exelon's Bid for CWIP Incentive, Requests Extended Comment Period

Strategic Insights -

The Maryland Public Service Commission (PSC) has submitted a notice of intervention and a request for an extended comment period in response to Exelon Corporation's filing to recover 100 percent of Construction Work in Progress (CWIP) costs in rate base for the construction of new major baseline wholesale electric transmission projects. The PSC is concerned about the potential burden on Maryland ratepayers and the financial risks to BGE, a subsidiary of Exelon, which is seeking the CWIP Incentive for its 2022 Regional Transmission Expansion Plan (RTEP) Window 3 project. The PSC is urging the Federal Energy Regulatory Commission (FERC) to extend the comment period by three weeks to allow for a more thorough review of the proposed CWIP Incentive.

Key Takeaways:

  • The Maryland Public Service Commission (PSC) has intervened in Exelon's bid for CWIP Incentive, requesting an extended comment period.
  • The PSC is concerned about the potential burden on Maryland ratepayers and the financial risks to BGE, a subsidiary of Exelon.
  • The PSC is urging FERC to extend the comment period by three weeks to allow for a more thorough review of the proposed CWIP Incentive.
  • Exelon is seeking to recover 100 percent of CWIP costs in rate base for the construction of new major baseline wholesale electric transmission projects.
  • The proposed CWIP Incentive is related to the 2022 RTEP Window 3 project, which will be built within BGE's service territory in central Maryland.
  • The PSC has the responsibility to ensure that bulk wholesale electricity transmission planning in PJM is consistent with the public interest and to promote adequate, economical and efficient delivery of utility services in the State.
  • The proposed CWIP Incentive amounts to an estimated $634 million, which represents an amount equivalent to 25 percent of BGE's entire transmission plant in service for the year ended 2024.
  • Exelon has requested that the PJM Tariff changes become effective October 1, 2025, with no suspension period or hearing, or alternatively with no more than a nominal suspension period.

Statistics:

  • Estimated cost of the CWIP Incentive: $634 million
  • Equivalent to 25 percent of BGE's entire transmission plant in service for the year ended 2024
  • Requested comment period extension: three weeks
  • Effective date of proposed PJM Tariff changes: October 1, 2025
  • Primary reason for CWIP Incentive: to ease financial pressures facing BGE due to credit agency's downward credit watch
  • Potential impact on ratepayers: significant burden

Sources:

  • UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Baltimore Gas and Electric Company Docket No. ER25-3018-000
  • Annotated Code of Maryland, Public Utilities Article ("PUA"), SS 2-113
  • FERC Stats. & Regs. P 31,222 (2006), Order No. 679-A
  • Order on Rehearing, 119 FERC P 61,062 (2007)