27-05-2025
BGE customers can expect an electricity price increase on June 1. Here's why.
BGE customers will see another significant increase in the price of electricity starting June 1.
The increase comes amid frustrations from BGE customers who have been grappling with high energy costs throughout the year.
Why will electricity costs go up on June 1?
According to BGE, the increase is a result of an unexpected spike in capacity auction prices, and the Talen Energy reliability-must-run (RMR) fee.
What are capacity auction prices?
A capacity market auction is a competitive bidding process where power companies promise to make their electricity generation available in the future.
Last week, legislators criticized BGE, saying that the company was responsible for an energy supply undercount at the most recent auction, causing the total cost of electricity across the PJM region to go from $2.2 billion to $14.7 billion.
BGE said Tuesday that the increase was not due to the company raising its distribution rate, but an increase in the price of "electricity itself".
"It's like when gas prices go up—you're paying more for the gas you use, not more to the gas station for delivering it," a spokesperson for BGE said.
What is the Talen Energy RMR fee?
The Talen Energy RMR fee refers to the fixed payments made to Talen Energy for continuing to operate its Brandon Shores and H.A. Wagner power plants in Maryland, beyond their planned retirement dates.
PJM Interconnection, the regional grid operator a fee of $312 per megawatt per day for the Brandon Shores plant, amounting to approximately $145 million annually, along with a $5 million performance incentive. For the H.A. Wagner plant, PJM pays a fee of $137 per megawatt per day, which totals about $35 million per year, plus a $2.5 million performance incentive.
The details are outlined in a settlement agreement reached in January 2025.
Maryland struggles with ongoing energy rate increases
BGE raised rates on January 1, increasing the average residential gas bill by 9% and electric bill by 7%. Some customers saw even larger jumps, with winter bills climbing by more than $200.
The utility cited several reasons for the hikes, including higher distribution costs regulated by the Maryland Public Service Commission (PSC), a 30% rise in natural gas prices over the past year, and increased spending on energy efficiency programs mandated by the state.
BGE also pointed to major investments in gas infrastructure upgrades.
Baltimore City Council President Zeke Cohen has raised questions about the company's long-term plans.
Earlier this month, Cohen called for transparency around BGE's proposed multi-year rate increases for 2026.
In 2023, the PSC approved BGE's multi-year delivery rate increases, enabling the company to raise rates by approximately $408 million over three years for both gas and electric services.
