Maryland’s gas distribution utilities are spending hundreds of millions of dollars a year on long-lived gas infrastructure. These investments are paid back to utilities over many decades along with a profit; that profit multiplies the initial cost by a factor of about three, driving huge rate increases. The State’s largest gas utility, for example, has tripled its delivery rates since 2012. These investments are problematic because gas consumption is widely expected to decline as gas appliances face stiff competition from highly efficient electric appliances. The competition is compounded by other concerns about gas use, including its inherent safety risks, its health impacts, and its contribution to climate change and other environmental concerns. Thus, aside from rising distribution costs, there are risks that the gas infrastructure will become economically obsolete well before the investments are paid off.
In 2013 Maryland enacted the Strategic Infrastructure Development and Enhancement (“STRIDE”) Act, which provided gas utilities with new financial incentives to replace aging gas infrastructure by allowing for accelerated recovery of certain infrastructure investment costs. STRIDE sparked a utility spending spree that has driven significant increases in gas distribution rates. For years, declines in gas supply costs masked the effect that rising distribution rates had on customer bills. To learn more about the STRIDE law and understand how it has encouraged a substantial increase in gas infrastructure spending, visit “STRIDE.”’
OPC has studied and published various gas utility spending reports. The reports show how gas infrastructure spending has accelerated and increases rates. They include projections that demonstrate that without a change in course, gas delivery rates will significantly increase even further in coming years. For more information about gas spending and its impact on current and future customer bills, please visit “Gas Spending and Analysis.”
In 2023, OPC filed a petition with the Public Service Commission to address the lack of any planning for the utilities’ gas infrastructure spending. As of the spring of 2025, little progress has been made in the case. OPC continues to urge the Commission to confront and develop a plan for the future of gas. For more information about OPC’s work on the future of gas proceedings, visit “Future of gas proceedings.”
If you need help with your bill or resources for financial assistance, visit “Get Help with your bill.”