Utility Rates and Basics
OPC’s summer 2024 report shows how utility rates have changed over time. Using a variety of figures and tables, the report reveals that most Maryland utility customers have seen their gas and electricity rates increase substantially over the last 10-15 years, with some rates increasing by multiples of two or three. The report focuses on the amounts that utilities charge their customers for delivering electricity and gas to customers’ homes and businesses, as distinct from the supply (or commodity) charges. While the rates of many of the largest utilities have escalated significantly in recent years, other utilities have only seen modest rate increases, tracking inflation rates. The utilities with rapidly increasing delivery rates have taken advantage of regulatory policies that encourage utility spending on capital infrastructure—such as the substations, poles, and wires of the electric utilities and the pipes of the gas utilities—by allowing utilities to recover such spending, along with a profit, on an accelerated basis.
For OPC's press release on the report, click here.
For People's Counsel's op-ed on the report, click here.
For media coverage on OPC's report on rising utility rates, click here.
To see OPC's work on gas infrastructure spending, click here.
The individual utility pages available through the links on the left side of this page have information about current and historic rates and charges of the major Maryland electric and gas utilities. The information will be periodically updated.
Figures on the utility-specific pages show only rates and charges under the standard tariffs for residential customers. Rates and charges for other customer classes or non-standard options (such as time-of-use rates) for residential customers will be different. The rates shown are intended to illustrate general rate trends and are based on standard residential rate schedules. Reported rates may vary slightly from rates as they appear or appeared on customer bills because they reflect an annual weighted average, do not incorporate certain surcharges or reconciliations, or because they are not adjusted for temporary riders, including changes for tax benefits from the Tax Cuts and Jobs Act of 2017 and related credits being passed through to customers ahead of schedule.
Bill Basics
Your electric and gas bill includes two primary categories of charges:distribution service, and the commodity charges.
Distribution Service
The utility’s distribution (or delivery) service charge includes the costs of the utility’s infrastructure that serves customers and the utility’s operational costs.
The distribution charges that are on your bill include costs associated with the utility’s “rate base,” which is comprised of the utility’s outstanding (not yet paid for) capital expenditures. The utility’s profit largely depends on the size of its rate base. Stated otherwise, the greater the utility’s capital expenditures, the larger the rate base, and the larger the utility’s profits. Customers also pay for the utility’s taxes on its profit through the distribution charges.
Distribution charges tend to increase over time. The utility distribution charges are set by the Public Service Commission in rate cases.
Delivery costs are recovered with two different charges you see on your bill:
A distribution rate which is a volumetric charge that is calculated based on how much gas or electricity you use;
A fixed “customer” charge, which is a flat monthly fee each residential customer pays regardless of how much or little gas or electricity you used.
Commodity
The commodity charge—sometimes called a fuel charge or supply charge—is for the cost of the gas or electricity you use.
The amount of gas used (the gas molecules) is measured in therms.
The amount of electricity used is measured in kilowatt hours.
Utilities procure gas and electricity through competitive procurements regulated by the Public Service Commission, and the costs are passed through to customers with a small administrative fee.
Commodity costs can go up and down with the market, lowering or raising your overall bill.
Other surcharges
Your utility bill also includes surcharges that add to your bill.
Here are explanations of some of thosesurcharges:
STRIDE surcharge: Gas companies may have a “STRIDE” surcharge. The STRIDE surcharge is an additional charge for distribution service related to replacement of old infrastructure. What you pay in the STRIDE surcharge is added into the overall distribution services charges. Click to learn more about STRIDE.
EmPOWER surcharge: This surcharge supports programs to promote energy efficiency, such as rebates for energy-efficient appliances, home energy audits, and related programs. Click to learn more about programs through EmPOWER that can benefit you.
Local taxes: While distribution charges cover the utilities’ tax obligation related to their profits, local taxes may be included as a separate line item on your bill.
Click the left-hand menu to see current and historical utility rates for Maryland’s major utilities.
Glossary
Capital expenditure: Dollars a utility spends on projects and equipment that replace or expand the utility’s infrastructure. Capital expenditures go into the utility’s “rate base” (see below) with the Public Service Commission’s approval.
Delivery charges: The charges for delivering gas or electricity to your home, including the monthly customer charge and the distribution rate charge that depends on energy usage. Sometimes referred to as “distribution” charges.
Distribution rate: The rate that is multiplied by the amount of gas or electricity the customer consumes each month to determine the volumetric component of the delivery charges.
Monthly customer charge: A monthly fixed charge on customer bills that makes up the other main portion of the delivery charges.
Rate base: The total dollar amount of the utility’s capital investments that have not yet been paid for by customers. Utilities receive a return, including profit, that is based on rate base size and that is recovered from customers in their delivery charges.
Supply charge: A charge for the physical energy the customer consumes, measured in therms for gas and kilowatt-hours for electricity. Also called the “commodity” charge.
Utility infrastructure: The pipes, towers, wires, computers, and other equipment and infrastructure that the utility needs to deliver gas or electricity to customers.