Potomac-area utility customers are paying about $4 more per month after Maryland regulators slashed Pepco's rate hike request by more than half. Now another increase is on the table: Potomac Edison wants $52.8 million more in annual revenue, a request that could raise bills for some Montgomery County households.

The Maryland Public Service Commission (PSC) has cut both Pepco's and Washington Gas's rate requests sharply this year. Two more cases remain under review, including Potomac Edison's and a $156.1 million request from Baltimore Gas & Electric.

PSC and Maryland Energy Administration officials briefed state lawmakers Tuesday, Sept. 15, on how the Utility RELIEF Act (HB 1532), signed into law this year, is reshaping rate reviews. The briefing was held before the House Environment and Transportation Committee, chaired by Del. Marc Korman (D-Montgomery).

What regulators have already done

The PSC approved about $50.9 million of Pepco's $119.9 million rate increase request. The result: an average increase of $3.94 per month for residential customers in Montgomery and Prince George's counties, according to MyMCMedia. Pepco had originally sought $10.24 per month. Those rates took effect Aug. 31.

Regulators also rejected $164.9 million in costs tied to Pepco's White Flint substation project on Nebel Street in Rockville, finding the spending was not prudent.

The PSC similarly cut Washington Gas's request from $82.5 million to about $38 million. That adds roughly $4.01 per month for the average residential heating customer, The Sentinel reported. Washington Gas serves about 518,000 customers across six Maryland counties, including Montgomery.

What's still pending

Potomac Edison, a FirstEnergy subsidiary, filed its $52.8 million request Sept. 4. The company estimates approval would raise the average residential bill by about 5.3%, according to Potomac Edison's filing. A final order is expected in April 2027, according to PSC briefing materials.

Potomac Edison serves about 295,000 customers in parts of seven Maryland counties, including portions of northern Montgomery County, according to the company. Most Potomac-area households are Pepco customers.

In a 2023 rate case, Potomac Edison sought $50.4 million and regulators approved $28 million, according to the Maryland Office of People's Counsel. The office has sought expert testimony in the current case as well.

BGE's $156.1 million request, filed July 2, has a final order expected in January 2027.

Officials warn of rising costs

Niki Wiggins, the PSC's director of legislative affairs, told lawmakers the approved Pepco increase fell below the rate of inflation. Maryland Matters reported that Wiggins told the committee, "Rates have to be just and reasonable – that's a constitutional standard."

Maryland People's Counsel David Lapp warned that energy costs will likely keep growing, driven in part by data center demand. He said gas rates may also rise as residents move away from gas appliances.

Much of the savings under the Utility RELIEF Act are expected in 2027 and beyond. The law limits ratepayer money used for executive salaries, adds scrutiny to transmission line proposals, and cut the monthly EmPOWER energy-efficiency surcharge this summer.

Comments on the Potomac Edison case can be submitted through the PSC website under Case No. 9904. No public hearing date has been set.