Public Utilities (GPU) — Title 4. Rate Regulation

The Commission shall issue an order, including the rate set under subsection (b) of this section.

The Commission shall serve the order on each affected public service company.

plainly print the tariff schedule of its rates and charges for its regulated services;

make available the tariff schedules for public inspection; and

post the tariff schedules to make the tariff schedules readily accessible to and convenient for inspection by the public.

Notwithstanding any other law, except as provided in paragraph (1) of this subsection, if the Commission finds after notice and hearing that it is in the public interest, the Commission may allow a telephone company that has 20,000 or fewer subscribers to provide a regulated service without requiring the telephone company to file a tariff schedule of its rates and charges for the regulated service.

The Commission may issue orders or adopt regulations that the Commission determines necessary to regulate a service in which a telephone company is not required to file a tariff schedule of its rates and charges under this subsection.

provides to the Commission notice of the new rate or change in rate at least 30 days before the new rate is established or current rate is changed; and

publishes the new rate or change in rate in accordance with § 4–202 of this subtitle during the entire 30 day notice period in new schedules or plainly indicated amendments to existing schedules.

the changes that it proposes to the rate schedules currently in force; and

the effective date of the changes.

The technical staff of the Commission may assist a water company or a sewage disposal company in establishing a proposed just and reasonable rate.

In assisting a water company or a sewage disposal company under this subsection, the technical staff may seek information from the water company or the sewage disposal company.

The Commission shall restrict the availability of staff–assisted rate cases authorized under this subsection to water companies or sewage disposal companies whose gross annual revenues, for the most recent calendar year for which data are available, are below an amount determined by the Commission, not to exceed $1,000,000.

The Commission shall adopt regulations to establish formal rules for staff–assisted rate cases authorized under this subsection.

This section applies only to a public service company that is an investor–owned electric company, a gas company, or a combination gas and electric company.

This section does not apply to a municipal electric utility or an electric cooperative.

the public service company is initiating the proceeding; and

information about the proceeding is or will be available on the Commission’s website.

The Commission may suspend, effective immediately and without formal proceedings, any new rate or change in rate proposed by a public service company.

Unless suspended by the Commission, and subject to § 4-203 of this subtitle, a new rate or change in rate proposed by a public service company takes effect on the date specified in the rate application.

The Commission shall furnish to the public service company proposing a rate a written statement of the reasons for the suspension.

The Commission promptly shall institute proceedings to consider whether the suspended rate is a just and reasonable rate.

The Commission may:

Subject to subsection (c) of this section, after the suspension or extension under paragraph (2) of this subsection expires, if the Commission has not entered a final order, the new rate or change in rate proposed by the public service company takes effect.

If a proposed new rate or rate increase takes effect before the Commission enters a final order in the proceedings, if practicable, the Commission may order the public service company that proposes the rate to keep a detailed and accurate account of:

After the proceedings conclude, the Commission may require the public service company to refund with interest, to each person listed under paragraph (1)(ii) of this subsection, the part of the new rate or rate increase that the Commission finds unjustified.

If a refund is not practicable, the public service company shall charge off and amortize the difference between the operating revenues under the rate charged and the operating revenues that would have been obtained from the same volume of business from the final set rate, through a temporary rate decrease for the period that the Commission sets.

pending a final rate proceeding, the rate in force is not a just and reasonable rate; and

the temporary rate is necessary in the interest of justice in view of the length of time that must elapse before a final order may be entered.

The temporary change in rate under subsection (d) of this section shall remain in effect for an initial period of not more than 9 months.

The Commission may order the temporary change to be extended by not more than 3 months.

If the final rate set is higher than the rate set in the order for a temporary rate, the public service company may amortize and recover over a period that the Commission sets, through a temporary increase over the final rate set, the difference between the operating revenue obtained under the order for a temporary rate and the operating revenue that would have been obtained from the same volume of business from the final rate set.

If the rate in the order for a temporary rate is higher than the final rate set, the Commission shall order a refund, charge off, or amortization under § 4-204(c) of this subtitle.

The valuation:

If a timely protest is filed, the Commission shall enter a final valuation by order after hearing.

a comparison of the costs of internal labor and contractual labor;

a demonstration of the reasonableness of the decision to use contractual labor;

a justification for the use of contractual labor when used instead of internal labor, including a cost–based rationale; and

any other information that the Commission requires.

an electric cooperative; and

a gas company, electric company, telephone company, water company, or sewage disposal company whose gross annual revenues, for the most recent calendar year for which data are available, are less than 3% of the total gross annual revenues of all public service companies in the State during the same calendar year.

When the Commission suspends a proposed new rate for an electric cooperative or a company subject to this section that is based on the existing authorized fair rate of return or, for an electric cooperative, the existing debt service coverage ratio, the Commission promptly shall institute proceedings to determine if additional revenues are required to allow the electric cooperative or the company to earn the existing debt service coverage ratio or the existing fair rate of return authorized in the previous base rate proceeding.

The Commission shall:

Proceedings under this section shall:

In proceedings under this section, the Commission may use a more recent past test period than that used in the previous base rate proceeding for the electric cooperative or the company.

The Commission shall enter a final order as to the revenue requirement determined under this section within 90 days after the proposed new rate is filed.

The final order shall:

If, in the final order, the Commission decides to conduct further proceedings under subsection (c) of this section, the final order may provide for refund, consistent with the provisions of § 4–204(c) of this subtitle, of any difference between the new rate authorized under this subsection and the rate the Commission sets under subsection (c) of this section.

If the Commission decides to conduct further proceedings under subsection (b) of this section, the Commission, after a hearing, may:

The Commission shall take any action under this subsection within 120 days after entry of a final order under subsection (b) of this section.

This section does not apply to a proposed new rate that is filed:

Unless the Commission provides otherwise, this section does not apply to a proposed new rate that is filed more than 3 years after the Commission enters a final order authorizing the existing fair rate of return or, for an electric cooperative, the existing debt service coverage ratio in the previous base rate proceeding.

provides gas or electric services;

is subject to a cost allocation manual approved by the Commission;

does not meet the standards for rate proceedings provided for under § 4-207 of this subtitle.

A public service company subject to this section shall file an independent audit opinion prepared by an entity approved by the Commission on the earliest of:

The independent auditor shall:

set the amount of the monthly surcharge required to support the costs and determine which customers of the applicable utility are subject to the surcharge;

include in the rate base the related net capital costs; or

adopt another method to apportion the costs appropriately.

In this section the following words have the meanings indicated.

“Customer” means a retail natural gas customer.

“Eligible infrastructure replacement” means a replacement or an improvement in an existing infrastructure of a gas company that:

“Plan” means a plan that a gas company files under subsection (e) of this section.

“Project” means an eligible infrastructure replacement project proposed by a gas company in a plan filed under this section.

necessary to ensure safety and improve reliability; and

consistent with State policy.

A gas company may file with the Commission:

A plan under this subsection shall include:

A customer notification plan required under paragraph (2) of this subsection shall provide for:

For a plan filed under this section:

For a gas company to recover costs associated with eligible infrastructure replacement projects, a plan shall demonstrate:

A plan under this subsection shall be filed separately from a base rate proceeding.

In a base rate proceeding after approval of a plan, the Commission shall, in establishing a gas company’s revenue requirements, take into account any benefits the gas company realized as a result of a surcharge approved under the plan.

Any adjustment for return on equity based on an approved plan only shall be considered and determined in a subsequently filed base rate case.

Within 180 days after a gas company files a plan, the Commission:

Within 150 days after a gas company files an amendment to an approved plan, the Commission shall take final action to approve or deny the amendment.

The Commission may approve a plan if it finds that the investments and estimated costs of eligible infrastructure replacement projects are:

The Commission may not consider a revenue requirement or rate–making issue that is not related to the plan when reviewing a plan for approval or denial unless the plan is filed in conjunction with a base rate case.

Subject to paragraph (2) of this subsection, if the Commission does not take final action on a plan within the time period required under subsection (f) of this section, the gas company may implement the plan.

If a gas company implements a plan that the Commission has not approved, the gas company shall refund to customers any amount of the surcharge that the Commission later determines is not reasonable or prudent, including interest.

are part of a plan approved under this section or implemented under subsection (g) of this section; and

accelerate gas infrastructure improvements in the State.

The Commission may review a previously approved plan.

If the Commission determines that an investment of a project or cost of a project no longer meets the requirements of subsection (f)(3) of this section, the Commission may:

Except as provided in paragraph (3) of this subsection, when determining necessary and proper expenses while setting a just and reasonable rate for a gas company, the Commission may include all costs reasonably incurred by the gas company for performing environmental remediation of real property in response to a State or federal law, regulation, or order if:

Environmental remediation costs incurred by a gas company may be included in the gas company’s necessary and proper expenses regardless of whether:

Environmental remediation costs incurred by a gas company may not be included in the gas company’s necessary and proper expenses if a court of competent jurisdiction determines that the proximate cause of the environmental contamination is a result of the gas company’s failure to comply with a State or federal law, regulation, or order in effect when the contamination occurred.

In this subsection, “financial benefit” includes any monetary gain on the conveyance of real property, or any portion of real property that was subject to environmental remediation, to a third party and any other financial benefit of the property or portion of the property that subsequently inures to the gas company, including income from rentals and tax credits, deductions, or other financial benefits, less any environmental remediation costs relating to the property that the gas company was not allowed to recover from the gas company’s customers.

If a gas company is allowed to recover environmental remediation costs under this section, any financial benefit accruing to the gas company as a result of the remediation of real property shall be credited to the gas company’s customers in a manner determined by the Commission.

In this section the following words have the meanings indicated.

“Contract capacity” means the amount of monthly peak load requirements:

“Large load customer” has the meaning stated in § 7–232 of this article.

“Load ramp period” means the period of time from commencement of service until a large load customer’s billing calculation is based on the full contract capacity.

requires a large load customer to cover the just and reasonable costs associated with any electric transmission or distribution system buildout required to:

protects residential retail electric customers from the financial risks associated with large load customers through the use of:

allocates to the large load customer:

sufficiently ensures that the allocation of costs to large load customers under the schedule does not result in customers that are not large load customers unreasonably subsidizing the costs of large load customers under the schedule.

capacity procurement, including backstop reliability procurement; and

costs associated with the interconnection process, including transmission costs.

submit a request for a load study to determine the necessary contract capacity for the large load customer and pay any applicable fees associated with the study;

designate a specific site where the large load customer’s project will be constructed and served by the electric company;

own or have the exclusive right to use the land designated in item (2) of this subsection for the project; and

meet any other requirements specified under the rate schedule.

On or before June 1, 2026, the Commission shall adopt regulations to carry out this section.

The regulations shall:

By order or regulation, the Commission shall:

demonstrates the customer benefits of the investment; and

does not allow for:

the public service company’s approved revenue requirement; and

the public service company’s actual revenue requirement during the term of the multiyear rate plan.

the customer benefits of the investment;

that the investor–owned gas company analyzed cost–effective options available to defer, reduce, or eliminate the need to replace, upgrade, or construct new components, including an analysis of:

the estimated risk reduction associated with a safety–related investment, if applicable.

protects consumers by, at a minimum:

encourages the development of competition; and

is in the public interest.

price regulation;

revenue regulation;

ranges of authorized return;

rate of return;

categories of services; or

price indexing.

In this subsection, “operating ratio” means the relationship of common carrier expenses to common carrier operating revenues.

In considering proper revenue under subsection (b)(3) of this section, the Commission shall determine a fair and equitable operating ratio.

the inherent advantages of transportation by common carriers;

the need, in the public interest, of adequate and efficient transportation services by common carriers at the lowest cost consistent with furnishing these services; and

the need of revenues sufficient to enable common carriers to provide these services under honest, economical, and efficient management.

the draft, dimensions, and tonnage of the vessel piloted;

the difficulty and inconvenience of the particular service and the time and skill required to render the service;

the time required to render pilotage service at other United States ports and the fees and charges for the service;

the public interest in maintaining efficient and reliable pilotage service; and

other factors relevant to the determination of a just and reasonable rate.

the draft, dimensions, and tonnage of the vessel;

the difficulty and inconvenience of the particular service and the time and skill required to render the service;

the time required to render docking service at other United States ports and the fees and charges for the service;

the public interest in maintaining efficient and reliable docking service; and

other factors relevant to the determination of a just and reasonable rate.

on written application by the jurisdiction that receives the service; and

in the same way as rates are set for sewage disposal companies.

on written application by the jurisdiction that receives the water; and

in the same way as rates are set for water companies.

the water or sewage disposal systems have common ownership; and

the rate consolidation is in the public interest.

Beginning July 1, 2023, unless the Commission has approved the supply offer in accordance with subsection (a) of this section, a third–party retail supplier may not offer to:

An approved supply offer from a third–party retail supplier shall include a commitment, for the entirety of the term of the supply offer, to charging at or below the standard offer service rate or gas commodity rate for customers receiving energy assistance.

If a third–party retail supplier’s offer is not approved by the Commission, the third–party retail supplier may not:

On or before September 1 each year, the Commission shall publish a report on the Commission’s website that includes:

The Commission shall send a copy of the report to the Office of People’s Counsel, the Office of Home Energy Programs, and, subject to § 2–1257 of the State Government Article, the Senate Finance Committee and the House Economic Matters Committee.

In this section the following words have the meanings indicated.

“Eligible limited–income customer” means a residential customer of a utility company with annual income that:

“Limited–income mechanism” or “mechanism” means a process approved by the Commission under this section to benefit an eligible limited–income customer of a utility company.

“Payment plan” means an agreement between an eligible limited–income customer and a utility company to pay an arrearage balance over a specific period of time to avoid disconnection of a utility service.

Subject to the approval of the Commission, a utility company shall adopt a limited–income mechanism to benefit an eligible limited–income customer.

Notwithstanding § 4–503(b) of this title, the mechanism may take the form of a program, tariff provision, credit, rate, rider, or other means to assist an eligible limited–income customer to afford a utility service.

A municipal electric utility may adopt a limited–income mechanism subject to the approval of the Commission in the same manner as a utility company in accordance with this section.

A utility company that proposes a limited–income mechanism for Commission approval under subsection (c) of this section shall include the proposal in:

A proposal submitted under this section shall allocate the prudently incurred costs of the limited–income mechanism across rate classes.

The proposal shall include:

the degree to which the mechanism promotes affordability of electricity or natural gas for limited–income customers;

the public interest in allocating the costs of the mechanism between the utility company’s shareholders and rate payers;

the impact on rates, utility operating costs, customer arrearages, customer disconnections, uncollectible costs, and successful completion of payment plans;

the ability of a limited–income customer to continue to receive benefits when relocating within the same service territory;

coordination of benefits under the mechanism with any other public or private assistance that may be available to the customer;

a minimum level of support or assistance structure to provide equitable availability of limited–income assistance across the State; and

any other information the Commission considers appropriate.

This section applies to:

This section does not apply to a small rural electric cooperative.

the company failed to show that the charges were based solely on increased costs of fuel, purchased power, or purchased gas;

the company failed to follow competitive practices in procuring and purchasing fuel, power, or gas; or

the company failed to show that its practices in procuring and purchasing fuel were reasonable.

sell, render services, or furnish a commodity until the public service company files and publishes its rate schedules in accordance with § 4–202 of this title; or

demand or collect:

to the officers, employees, pensioners, and immediate family members of the officers, employees, and pensioners of a public service company;

to the United States, the State, or a local government;

to provide relief in cases of general epidemic, pestilence, flood, or other similar calamity;

in the case of common carriers, to transport:

in the case of common carriers, for the issuance of mileage, excursion, or commuter tickets;

to free steamboat excursion transportation from May through August of each year, from Baltimore City to any place in the State, in exchange for services rendered in advertising the excursion business;

to obtain essential data by a method that uses a limited sample of customers, in connection with a rate structure study conducted under formal proceedings before the Commission;

to telephone lifeline service provided to eligible subscribers under § 8–201 of this article; or

to electricity or gas service provided to eligible limited–income customers through an approved limited–income mechanism under § 4–308 of this title.

charge, demand, or receive from a person compensation that is greater or less than from any other person under substantially similar circumstances;

extend a privilege or facility to a person, except those privileges and facilities that are extended uniformly to all persons under substantially similar circumstances;

discriminate against a person, locality, or particular class of service; or

give undue or unreasonable preference to or cause undue or unreasonable prejudice to a person, locality, or particular class of service.

In this section the following words have the meanings indicated.

“Supervisor” means an employee of a public service company, the parent company of a public service company, or any other affiliate of a public service company who:

membership, dues, sponsorships, or contributions to an industry trade association, group, or related entity exempt from taxation under § 501(c)(6) of the Internal Revenue Code;

the acquisition, use, or allocation of costs associated with a private plane that is owned or leased by the public service company or its holding company; or

compensation for a supervisor that exceeds 110% of the maximum annual salary payable to the chair of the Commission for the same calendar year.

The board of directors of each public service company shall adopt a company–wide policy placing reasonable cost limitations on expenditures that the public service company intends to recover through rates for:

Each public service company shall send a copy of the policy adopted under paragraph (1) of this subsection to the Commission:

The Commission may review in a base rate proceeding the reasonableness of the cost limitations in a policy adopted under paragraph (1) of this subsection.