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Climate Policy for Maryland’s Gas Utilities: Financial Implications

This OPC report, prepared by the consulting firm Synapse Energy Economics, considers the financial impacts on gas utilities and customers of a gradual shift toward high levels of electrification. Customers already are switching to electricity from gas but the trend will accelerate as Maryland implements its greenhouse gas reduction goals. The report models the progress of Maryland’s electrification and projects greenhouse gas emissions and trends in gas consumption, space heating type and equipment sales. It then uses the projections to analyze the financial implications of Maryland’s climate goals for gas utilities in the State through 2050.

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Petition on long-term gas planning and immediate priority actions

In February, the Office of People's Counsel asked the Maryland Public Service Commission to initiate a proceeding on the planning, practices, and operations of the gas companies. OPC’s request asks the Commission to initiate a two-track proceeding. One track would cover priority actions that the Commission should take in the near term to align current gas operations with the consensus understanding that gas sales will decrease due to technology and State climate policy. The second track would cover long-term system planning, including the future role of gas utilities, the mitigation of potential stranded costs, and the maintenance of reliability and safety as utility revenues decline. OPC’s requests point out that the gas utility planning has not changed even though electric technologies—like electric heat pumps—are outperforming gas technologies and the State’s climate goals require the State to move off of fossil fuels. A Commission proceeding is necessary to ensure gas utility planning and practices are consistent with the public interest, Maryland climate policy, and the statutory requirement that rates utilities charge customers are just and reasonable.

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OPC's Legislative Work

On April 10th, the Maryland General Assembly concluded its 445th legislative session. Over the course of 90 days, the 188-member body considered more than 2,000 bills—ultimately passing 808 bills and 2 joint resolutions addressing everything from the State budget to tax credits, minimum wage, gun control, public safety, recreational cannabis, legal rights of child sex abuse survivors, elections, abortion, education, and climate.

Among this flurry of legislation, OPC identified and monitored 61 bills—and associated cross-files—with some connection to energy, utilities, or consumer protection. Our office maintained a strong presence in Annapolis, actively advocating on behalf of residential utility customers on 17 distinct bills. All told, OPC provided written testimony 31 times and testified orally 19 times this session.

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