The utility regulation legislation that state lawmakers passed on the final day of the General Assembly session is “a massive victory” for Marylanders, consumer advocates said.

Amid months of outrage over unexpectedly high natural gas and electric bills stemming from increases in supply and delivery rates and colder winter weather, utility customers and elected officials called for legislative action.

The Next Generation Energy Act tackles some of those issues. If signed by Gov. Wes Moore, it would take effect June 1.

The legislation gives utility customers an $81-per-household rebate, while increasing utility companies’ burden of proof for gas pipeline infrastructure projects and multiyear rate plans that lay out three years of rate increases.

It also changes how Baltimore Gas and Electric and other area utility companies gain approval from the state’s utility regulator, the Maryland Public Service Commission.

Republican critics of the legislation, which also addressed trash incinerators and in-state power generation, said it was overall “anti-business” and “overregulation.”

BGE says it will continue to work with lawmakers and the Public Service Commission.

“We are deeply committed to Maryland’s future and appreciate the work done in this session to champion fair and equitable service for all customers while collaboratively addressing the state’s evolving energy needs,” a statement from BGE reads.

The broad legislation features language culled from two earlier proposals, the Ratepayer Protection Act and the Ratepayer Freedom Act. Both aimed to prevent gas and electric utility companies from overcharging customers.

Lawmakers, including Del. Elizabeth Embry, a Baltimore Democrat, have blamed 2013 legislation called the Strategic Infrastructure Development and Enhancement (STRIDE) law for triggering costly gas pipeline construction projects.

“This bill does not eliminate STRIDE but it makes the utilities justify slamming us,” Del. Brian Crosby, a St. Mary’s County Democrat, said during Saturday’s legislative session. He added that multiyear rate plans also wouldn’t go away, but would require more justification from utility companies before the Public Service Commission sets increases.

Justifying costly gas projects

Embry’s Ratepayer Protection Act had support from Attorney General Anthony Brown, Maryland’s People’s Counsel David Lapp, Baltimore City Council President Zeke Cohen, as well as labor, consumer and climate advocates.

It proposed rolling back STRIDE, a law that encouraged gas utility companies to replace — instead of repair — aging gas pipeline infrastructure. Under that law, companies can recoup the cost from customers through delivery and distribution charges.

Some 900 miles of BGE’s 7,600 miles of gas infrastructure are made of old cast-iron and bare steel pipes. The utility has replaced about 500 miles since 2014 and has about 400 miles to go, Charles Washington, vice president of government affairs at BGE, said during an energy committee hearing March 12.

BGE and other utility companies have argued that gas pipeline replacement work is focused on safety, not profit. But lawmakers and ratepayer advocates disagree, calling the STRIDE law a blank check.

“It has been used to just replace gas infrastructure wholesale. That was not the purpose of the bill,” Embry said at a February press conference. “The purpose was to prevent gas leaks. This bill returns the STRIDE act to its original purpose and protects the pocketbooks of ratepayers.”

Under the Next Generation Energy Act, the bill that passed using some of Embry’s bill’s language, gas pipeline projects will prioritize safety and cost-effectiveness by requiring utility companies to provide a timeline for completing eligible projects, estimated costs and a description of customer benefits.

Utility companies also will need to demonstrate that projects are prioritized based on their risk to the public and cost-effectiveness and compare the project with other alternatives, such as leak detection and repair and the retirement of portions of the gas system.

Under the legislation, utility companies must also provide the Public Service Commission with evidence and justification for the use of contracted labor instead of their own workforce.

No ratepayer-subsidized private planes

Also new: Investor-owned electric and gas companies, like BGE’s parent Exelon, will be banned from using Maryland ratepayer money to finance private planes for the companies or their owners.

Additionally, these companies can’t use ratepayer money to acquire more planes, or to pay for lobbying, trade association memberships and sponsorships.

There are two investor-owned electric companies in the state. Exelon also owns Potomac Electric Power Company (Pepco) and Delmarva Power. First Energy owns Potomac Edison Company, which provides service in Western Maryland.

Exelon has at least two private planes currently registered to the company, according to the Federal Aviation Administration.

The company previously owned a private helicopter that it sold to the Baltimore-based Constellation Energy in 2022.

“Oh, and as a bonus, ratepayers aren’t going to be paying for private jets for Exelon anymore,” Montogomery County Del. Lorig Charkoudian said during the Saturday legislative session.

BGE didn’t immediately respond to questions about whether ratepayer money has been used for planes or other expenses subject to the new ban.

The proposal was introduced by Del. Andre Johnson Jr., a Harford County Democrat.

Johnson questioned representatives for BGE, Pepco and Delmarva about their parent company’s private aircraft at the March energy committee hearing. He asked if ratepayers were footing the bill for the purchase and use of the company’s planes, including for the Exelon CEO’s personal use.

Washington, who represents BGE, responded that he wasn’t sure how those expenses are paid.