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.
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