Baltimore approves higher conduit fee as BGE warns customers could face increased bills
Baltimore City is nearly doubling the fee utilities pay to use its underground conduit system, a move city officials say is necessary to keep pace with construction costs and improve the safety of the aging network.
The new rate will increase from $2.20 to $4.05 per linear foot beginning Jan. 1, 2027. Future annual adjustments will be tied to the Consumer Price Index.
Baltimore Department of Transportation Director Veronica McBeth told the board of estimates the adjustment, “will provide the sustainable funding needed to increase investments in proactive manhole rehabilitation, expand inspection and monitoring capabilities through advanced technologies, and enhance obstruction repair efforts.”
City officials maintain the existing $2.20 rate, unchanged since 2019, is no longer sufficient to meet the system’s infrastructure and public-safety needs.
The city says 37 entities currently use the system, with Baltimore Gas and Electric accounting for approximately 76% of its leased linear footage.
BGE opposes the increase, arguing that the existing agreement is already producing infrastructure improvements while spreading costs over a longer period to limit the effect on customers.
The four-year agreement approved in 2023 required BGE to undertake $134 million in capital improvements to the city-owned system and pay $1.5 million annually in maintenance fees. Baltimore retained ownership of the conduit and control over its maintenance and operations.
Since that agreement took effect, BGE says it has fully rebuilt 20 manholes and installed 35 new ones. The utility says all but one of the rebuilt manholes were enlarged to reduce congestion and improve access and reliability.
BGE spokesman Nick Alexopulos said the current agreement allows those investments to be recovered over the expected life of the infrastructure.
“Under the current conduit agreement, which ends at the end of this year, electric customers’ bills went down because the costs are spread out over a 50-year period,” Alexopulos said.
Alexopulos said the conduit fee increase would be an operational expense imposed on every tenant using the system. He also warned that the effect would not necessarily be limited to Baltimore, naming customers in Harford, Baltimore, Carroll, Howard, Anne Arundel and Calvert counties among those who could be affected.
Because BGE is a regulated utility, the Maryland Public Service Commission would decide whether and how the company can recover the added expense through customer rates.
Speaking at City Hall, Mayor Brandon Scott stressed that BGE cannot increase rates without the commission’s approval and argued that seeking to pass along the conduit expense would be the utility’s decision. “This is a choice that they’re choosing to do,” Scott said.
During an exchange with the mayor during Wednesday’s board of estimates hearing, Brittany Jones, BGE’s vice president of governmental and external affairs, said the company currently has an active rate case before the PSC. Asked about the potential effect of the conduit increase, Jones said preliminary estimates indicate it could add roughly $1 to $2 to the average customer’s bill.
Jones also said affordability must remain a priority.
“Our customers are struggling to pay their current bills,” Jones said, adding that BGE’s profits are not simply retained or entirely distributed to shareholders.