Consumers in Maryland and a dozen other states across much of the mid-Atlantic region could be hit with up to 5% higher electricity costs next summer, but customers in Baltimore Gas and Electric Co.’s footprint just might be an exception.
BGE bills are expected to decrease roughly $3.36 a month, thanks to some previously negotiated credits, but not until at least next June 1, an analysis by a state utility watchdog shows.
The Maryland Office of People’s Counsel on Thursday reviewed results of an annual “capacity market auction,” completed this week by PJM Interconnection, the operator of the wholesale electricity market and 13-state regional power grid. The auction, in which companies make competitive bids to offer power generation, sets the wholesale price for electricity and enables enough supply to meet the projected needs of more than 67 million people in 13 states and Washington, D.C., for a year starting June 2026.
Supply prices are separate from and in addition to the delivery fees that are paid to utilities and have rates regulated by the state’s Maryland Public Service Commission.
This year’s auction set a record high clearing price of $329 per megawatt-day, up from last year’s clearing price of $270 per megawatt day. Power generators and others offer a price per megawatt of power for each day. Each bidder is paid the clearing price times 365 days for each megawatt they bid at or below the clearing price.
Last year’s price, a nine-fold jump from the previous year, has helped send utility bills soaring this year. BGE customers are paying an average $16.49 per month more this year, as of last month, as a result of the last two auctions.
Maryland consumers are being forced to shoulder the cost of supporting the massive power needs of data centers, mostly located outside the state, Maryland People’s Counsel David S. Lapp said in the analysis. Data centers accounted for more than 5,400 megawatts of increased demand compared with last year’s level.
In several OPC filings before federal regulators, the office argues that Maryland customers must pay hundreds of millions of dollars for transmission projects driven by data center load growth occurring in Northern Virginia.
“Residential customers are not causing these excessive costs and should not be paying for them,” Lapp said in Thursday’s announcement. “Utility regulation is failing to protect residential customers, contributing to an energy affordability crisis.”
Despite the promise of slight relief by next summer, BGE customers have been squeezed by higher bills.
Annie Albert, a Fells Point resident, said she’s taken steps for several years to conserve energy and make her 235-year-old rowhome more energy efficient. She said she’s cut back on electricity usage but still finds herself paying $500 a month this year, about the same as last year. She’s cut back spending in other areas, such going out to eat less and taking fewer vacations.
“Our prices have gone up, for sure,” said Albert, who has lived in BGE territory for a decade. “We’ve also seen an increase in the unreliability of the grid. This summer we’ve lost power more times than we have in the entire time I’ve lived here.
“But what are you going to do, it’s one of those necessities you just have to pay for,” she said.
PJM said wholesale capacity accounts for a relatively small portion of electricity bills and could translate into a year-over-year increase of 1.5% to 5% in some customers bills throughout the region.
Besides data center expansion, electricity demand is soaring because of electrification and economic growth, the grid operator said. Power generation included in the recent auction included 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar.
PJM transmission costs per megawatt hour have more than tripled when adjusted for inflation from 2007 through last year, according to the 2024 State of the Market Report for PJM.
The People’s Counsel had advocated for changes to PMJ’s market auction rules that helped boost the amount of electric supply bidding into the market this year. In one change supported by Gov. Wes Moore and other PJM governors, a cap was set on the clearing price. But even increased electric supply could not offset higher demand, Lapp said.
Customers of Maryland utilities Pepco, Delmarva Power and Potomac Edison all can expect energy bill increases next summer, ranging from $2.50 to $5.24 per megawatt hour.
For the first time in several years, the price for the BGE zone cleared at the same price as the overall PJM regional price because the auction included two Anne Arundel County power plants that are shutting down but required by PJM to stay online until reliability measures are put in place.
Those plants were excluded from last year’s auction, driving the auction results up by as much as $5 billion, according to an Office of People’s Counsel report released last August.
Have a news tip? Contact Lorraine Mirabella at lmirabella@baltsun.com, (410) 332-6672.
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