Baltimore Gas and Electric (BGE) will pay the city of Baltimore about $24 million annually to use its underground conduit system – an expense the utility already has indicated that it could very well pass on to customers, according to a report in the December 2 edition of The Baltimore Sun.
The company and city officials agreed this week to settle a lawsuit BGE filed last year over fees to use the century-old system, the local news outlet said. The suit was prompted when the Baltimore Board of Estimates voted last year to more than triple the sum that companies are assessed for using the subterranean pipes, which carry utility lines.
Under the terms of the November 30 pact, the rate for BGE and other users has been set at up to $2.20 a foot per year. The utility previously had paid 98 cents per foot to use the 741-mile conduit system.
“This is a win for electricity customers and for the city,” commented BGE Director of Communications Aaron Koos on the company’s official blog, adding, “Not only does the [settlement] agreement lower costs for customers — reducing fees by about $17 million annually—it also ensures that the City still has the funding it needs to modernize the conduit system. The outcome will be a safer, more reliable and efficient system.
Acting City Solicitor David Ralph told the Sun that the city and BGE will go before the Maryland Public Service Commission (PSC) to file for any resulting electricity rate hike for customers. The increase would be charged to all BGE users, not solely Baltimoreans.
“The city and BGE are now on the same side in going before the PSC, convincing them that this is something that should be shared by all rate-users, not just the city of Baltimore,” Ralph said.
It was unclear, the newspaper said, how much BGE would seek to offset the higher fees, but the figure of $8 more per month has been bandied about. .
Paula Carmody, head of the Office of People’s Counsel, told the local news outlet that the consumer advocacy agency would examine such a proposal when it comes.
BGE, which has rented space in the conduit system for more than 100 years, is its largest user, accounting for more than 75 percent of the capacity. In its suit, the utility had charged that the city was trying to generate revenue with the rate increase, not use the money to maintain the conduit system.
Headquartered in Baltimore, BGE provides service to more than 1.25 million electric customers and more than 650,000 natural gas customers in central Maryland.