Advocates applaud measures by Maryland Public Service Commission to end costly gas subsidies, reduce costs for ratepayers

BALTIMORE – On Friday, the Maryland Public Service Commission (PSC) issued its first order under its “Future of Gas” proceeding. The order directed all Maryland gas utilities to stop subsidizing new customers’ connections to the gas system, and instead embrace “traditional ratemaking principles, which dictate that, to the degree possible, the entity causing the cost should be the entity that bears the cost.”

For decades, gas customers have covered some or all of the costs to extend gas lines to new customers, driving up delivery rates, and adding to utility profits over a decades long payback period. Connecting a home to the methane gas system hooks it onto fossil fuels for years, contributing to climate pollution in the state and creating new risks for deadly explosions.

Initially petitioned by the Office of the People’s Counsel (OPC), the decision is the first to come from the “Future of Gas” proceeding, a venue for short and long term gas planning. The Upgrade Maryland Campaign has advocated for the PSC to use the proceeding to protect residents from the growing costs of Maryland’s aging methane gas pipelines and  to jumpstart an equitable transition to clean, efficient electric home heating and appliances. 

Advocates and the OPC have called for an end to gas line subsidies, both to protect customers from the rising costs of the gas system and to ensure utility regulation is inline with state climate policy.

In response to the ruling, members of the Upgrade Maryland Campaign issued the following statements:

“Making current customers subsidize new customers’ methane gas lines prioritizes gas system expansion over public safety, driving up our bills and expanding polluting fossil fuel infrastructure,” said Maryland PIRG Senior Advisor Emily Scarr. “We applaud our regulators at the Public Service Commission for intervening to stop these fossil fuel subsidies.”

“Maryland residents can’t afford to keep propping up the state’s aging methane gas system. The Commission’s decision to end line extension allowances will save gas customers money and help rein in methane gas, a climate super pollutant which puts the health of our families and planet at risk,” said Brittany Baker, Maryland Director for Chesapeake Climate Action Network. “Building new homes with efficient, electric equipment means cleaner air, healthier homes, and lower bills, while helping the state meet its climate goals. Through their new order, the PSC is ensuring gas utilities stop incentivising expensive and dangerous methane gas for home heating and power.”

“The cost of Maryland’s aging methane gas system goes beyond dollars and cents. Burning gas in our homes is responsible for harmful air pollution that exacerbates asthma in our communities and prevents our neighbors from reaching their full potential,” said Ruth Ann Norton, President & CEO of Green & Healthy Homes Initiative. “By ending costly subsidies that charge residents for extending methane gas pipes to new customers, the Maryland Public Service Commission took a major first step toward cleaner air and healthier homes. We applaud this move and look forward to continued action from the Commission to jumpstart an equitable transition to healthier, more affordable communities.”