Maryland regulators end utility rate pilot, begin reform review

Todd Karpovich, The Baltimore Sun on Oct 2, 2026

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BALTIMORE — Maryland regulators have ended a pilot program that allowed utilities to set rates over multiple years, concluding that the approach produced few measurable benefits for customers while adding complexity to the ratemaking process.

The Maryland Public Service Commission voted to sunset the Multi-Year Rate Plan pilot and launch a two-phase review to develop a new framework for utility ratemaking. The review is expected to conclude by June 2027.

The commission said the pilot helped utilities recover certain costs more quickly and provided greater visibility into proposed spending on capital projects and operations. However, regulators found no clear, measurable benefits for ratepayers.

The pilot also complicated rate cases and required additional time and resources, according to the commission’s findings. Regulators said advance reviews of utility spending plans became less effective when companies later made significant changes to those plans.

The commission further found that the pilot failed to make rates more predictable or stable than the traditional ratemaking process, which relies on historical test years. It also did not demonstrate progress toward Maryland’s energy policy goals or spur greater utility innovation.

Created in 2020, the pilot was intended to address regulatory lag and spread rate changes over multiple years while improving transparency, reducing administrative burdens, encouraging innovation and sharing risk between utilities and customers.

Baltimore Gas and Electric Co. was the first utility to participate in the pilot. The commission later approved multiyear plans for Potomac Electric Power Co. and Delmarva Power & Light Co.

The commission’s decision does not rule out a revised multiyear rate plan or another form of forward-looking regulation. Instead, regulators directed utilities and other participants to examine whether a redesigned system can comply with Maryland law while protecting customers and maintaining safe and reliable service.

“This MRP lessons learned pilot gave us a clear record of what worked, what did not, and what must change if forward-looking ratemaking is to deliver real value for Maryland customers,” Commission Chair Kumar Barve said in a statement.

The first phase of the review will examine how utilities’ rates should be calculated, including the use of forecasted, historical and hybrid test years.

The commission’s work group has been directed to conduct a study required by the Utility Reducing Energy Load Inflation for Everyday Families, or RELIEF, Act. Electric utilities must submit recommendations, including any proposed legislative changes, by Feb. 1, 2027. The commission is required to report its findings to the Maryland General Assembly by April 1.

The second phase will focus on developing a potential new framework for multiyear or other forward-looking rate regulation. The work group must submit its report by June 30, 2027.

Among the issues it will examine are customer benefits, cost-sharing mechanisms, unexpected costs, utility spending plans, prudency reviews, bill stabilization adjustments, authorized returns, transparency and cost controls.

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