Md. Code, Public Utilities, Title 4

in effect

Md. Code, Public Utilities § 4-101

In this title, “just and reasonable rate” means a rate that: (1) does not violate any provision of this article; (2) fully considers and is consistent with the public good; and (3) except for rates of a common carrier, will result in an operating income to the public service company that yields, after reasonable deduction for depreciation and other necessary and proper expenses and reserves, a reasonable return on the fair value of the public service company’s property used and useful in providing service to the public.

Md. Code, Public Utilities § 4-102

(a) This section does not apply to small rural electric cooperatives. (b) The Commission shall have the power to set a just and reasonable rate of a public service company, as a maximum rate, minimum rate, or both. (c) (1) The Commission shall issue an order, including the rate set under subsection (b) of this section. (2) The Commission shall serve the order on each affected public service company.

Md. Code, Public Utilities § 4-103

(a) In setting just and reasonable rates under this title, the Commission may not discourage the use of employee stock ownership plans by public service companies by denying to the public service companies the full benefits of investment tax credits provided in connection with these plans by the Internal Revenue Code. (b) A public service company may not charge off lobbying expenses against its ratepayers.

Md. Code, Public Utilities § 4-201

In accordance with the provisions of this article, a public service company shall charge just and reasonable rates for the regulated services that it renders.

Md. Code, Public Utilities § 4-202

(a) Except as provided in subsection (c)(1) of this section and subject to subsection (c)(2) of this section, a public service company shall file with the Commission a tariff schedule of its rates and charges for its regulated services and for standard offer service as provided in § 7–505(b)(8) of this article. (b) As ordered by the Commission, a public service company shall: (1) plainly print the tariff schedule of its rates and charges for its regulated services; (2) make available the tariff schedules for public inspection; and (3) post the tariff schedules to make the tariff schedules readily accessible to and convenient for inspection by the public. (c) (1) (i) A telephone company that is regulated using an alternative form of regulation under § 4–301 of this title for baskets of services is not required to file with the Commission a tariff schedule of its rates and charges for its regulated retail services that are included in Basket 4 “Discretionary Services” and Basket 5 “Competitive Services”. (ii) A telephone company that is not regulated using an alternative form of regulation under § 4–301 of this title for baskets of services is not required to file with the Commission a tariff schedule of its rates and charges for its regulated retail services that, as determined by the Commission, are similar to the services included in Basket 4 “Discretionary Services” and Basket 5 “Competitive Services”. (2) 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. (3) 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.

Md. Code, Public Utilities § 4-203

(a) Unless otherwise ordered by the Commission, a public service company may not establish a new rate or change in rate unless the public service company: (1) 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 (2) 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. (b) The public service company shall plainly set forth in the notice and publication: (1) the changes that it proposes to the rate schedules currently in force; and (2) the effective date of the changes. (c) (1) The technical staff of the Commission may assist a water company or a sewage disposal company in establishing a proposed just and reasonable rate. (2) 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. (3) 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. (4) The Commission shall adopt regulations to establish formal rules for staff–assisted rate cases authorized under this subsection.

Md. Code, Public Utilities § 4-204

(a) (1) The Commission may suspend, effective immediately and without formal proceedings, any new rate or change in rate proposed by a public service company. (2) 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. (3) The Commission shall furnish to the public service company proposing a rate a written statement of the reasons for the suspension. (b) (1) The Commission promptly shall institute proceedings to consider whether the suspended rate is a just and reasonable rate. (2) The Commission may: (i) suspend the rate initially for not more than 180 days after the proposed effective date; and (ii) extend the suspension for up to an additional 90 days if the filing is for an alternative form of ratemaking for a public service company. (3) 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. (c) (1) 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: (i) all amounts received under the new rate or rate increase; and (ii) the persons on whose behalf the amounts are paid. (2) 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. (3) 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.

Md. Code, Public Utilities § 4-205

(a) The Commission may set a temporary rate for any public service company that is higher or lower than the rate previously in effect. (b) The Commission may set a temporary rate after hearing only if the Commission finds that: (1) pending a final rate proceeding, the rate in force is not a just and reasonable rate; and (2) 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. (c) If the order involves a temporary rate increase, and refund to the consumer is practicable, the public service company shall post a bond, with security and in an amount that the Commission approves, payable to the State and conditioned to ensure prompt refund with interest to each consumer of each amount received by the public service company from the consumer above the final rates that the Commission sets. (d) Any temporary change in rate shall equal the amount found by the Commission to be higher or lower than a just and reasonable rate. (e) (1) 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. (2) The Commission may order the temporary change to be extended by not more than 3 months. (f) (1) 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. (2) 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.

Md. Code, Public Utilities § 4-206

(a) At any time, the Commission may investigate and determine the fair value of the property of a public service company used and useful in providing service to the public. (b) (1) The valuation: (i) is not final until the Commission: 1. serves on the public service company a copy of the order setting the proposed valuation and the method used to set the valuation; and 2. allows a reasonable time in which to file a protest; and (ii) is final if a protest is not filed within the time specified in the order. (2) If a timely protest is filed, the Commission shall enter a final valuation by order after hearing. (c) All final valuations are prima facie evidence of value in proceedings under this division.

Md. Code, Public Utilities § 4-206.1

§4–206.1. (a) This section applies only to a public service company that is an investor–owned gas company or investor–owned electric company. (b) In a base rate proceeding to set just and reasonable rates under this title, each public service company shall demonstrate to the Commission the reasonableness of the use of internal labor in comparison to contractual labor. (c) To demonstrate reasonableness of the use of labor as required under subsection (b) of this section, a public service company shall provide to the Commission, at a minimum: (1) a comparison of the costs of internal labor and contractual labor; (2) a demonstration of the reasonableness of the decision to use contractual labor; (3) a justification for the use of contractual labor when used instead of internal labor, including a cost–based rationale; and (4) any other information that the Commission requires.

Md. Code, Public Utilities § 4-207

(a) This section applies only to: (1) an electric cooperative; and (2) 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. (b) (1) 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. (2) The Commission shall: (i) serve each of the parties to the previous base rate proceeding of that electric cooperative or that company with a copy of the suspension order; (ii) order the electric cooperative or the company to publish a display advertisement about the proposal in newspapers of general circulation in its service area; and (iii) order the electric cooperative to conduct a public hearing in accordance with the requirements of § 3–104 of this article. (3) Proceedings under this section shall: (i) account for revenues, expenses, and rate base in the same manner that the Commission employed in determining a just and reasonable rate in the previous base rate proceeding; and (ii) exclude consideration of any increase in the rate of return, or, for an electric cooperative, the debt service coverage ratio, any change in rate structure, or any change in an accounting approach to any item pertaining to revenues, expenses, or rate base inconsistent with that used by the Commission in determining a just and reasonable rate in the previous base rate proceeding for the electric cooperative or the company. (4) 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. (5) 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. (6) The final order shall: (i) authorize a new rate distributing any change in the revenue requirement proportionally among the ratepayers without change in the rate structure; and (ii) state whether further proceedings shall be held. (7) 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. (c) (1) If the Commission decides to conduct further proceedings under subsection (b) of this section, the Commission, after a hearing, may: (i) modify the rate structure; (ii) lower the authorized fair rate of return or, for an electric cooperative, lower the debt service coverage ratio; or (iii) modify the accounting approach to an item that pertains to revenues, expenses, or rate base. (2) The Commission shall take any action under this subsection within 120 days after entry of a final order under subsection (b) of this section. (d) (1) This section does not apply to a proposed new rate that is filed: (i) less than 1 year after a previously proposed new rate under this section is filed; or (ii) with a request for temporary rates under § 4–205 of this subtitle. (2) (i) An electric cooperative or a company may not file a proposed new rate under this subtitle if any proposed new rate filed by the electric cooperative or the company under this section is pending, or a new rate filed by the electric cooperative or the company under this section has been in effect fewer than 90 days. (ii) This paragraph does not preclude an electric cooperative or a company from filing a proposed new rate for a new service if the proposal does not affect the authorized rate of return or, for an electric cooperative, the debt service coverage ratio. (3) 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.

Md. Code, Public Utilities § 4-208

(a) This section applies to a public service company that: (1) provides gas or electric services; (2) is subject to a cost allocation manual approved by the Commission; (3) (i) engages in an unregulated business activity; or (ii) has a subsidiary that engages in an unregulated business activity; and (4) does not meet the standards for rate proceedings provided for under § 4-207 of this subtitle. (b) (1) 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: (i) once every 2 years; or (ii) when the public service company: 1. files a request for a change in its base rate under this subtitle; or 2. has a major change in its corporate organization or structure as determined by the Commission. (2) The independent auditor shall: (i) examine: 1. compliance by the public service company with policies and procedures of the public service company’s cost allocation manual; 2. proper allocation of costs to an affiliate of the public service company in accordance with the manual; and 3. appropriate charging of costs and transactions relative to the manual to the public service company and its affiliates; and (ii) identify adjustments that should be made: 1. to the manual consistent with prior Commission rulings; and 2. to the public service company or to an affiliate of the public service company relative to the examination of the allocation of costs and charging of costs and transactions. (c) The cost of the independent audit opinion filed under subsection (b) of this section shall be borne by the stockholders of the public service company.

Md. Code, Public Utilities § 4-209

(a) With respect to the net capital costs associated with the relocation underground of utility lines and facilities in connection with projects required by § 8–401 of the Land Use Article, the Commission shall: (1) 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; (2) include in the rate base the related net capital costs; or (3) adopt another method to apportion the costs appropriately. (b) A utility may not be required to pay more than 50% of the net capital costs of a relocation project. (c) A county or municipal corporation may appropriate money for a relocation project from appropriate federal, State, and local funds it receives for this purpose.

Md. Code, Public Utilities § 4-210

(a) (1) In this section the following words have the meanings indicated. (2) “Customer” means a retail natural gas customer. (3) “Eligible infrastructure replacement” means a replacement or an improvement in an existing infrastructure of a gas company that: (i) is made on or after June 1, 2013; (ii) is designed to improve public safety or infrastructure reliability; (iii) does not increase the revenue of a gas company by connecting an improvement directly to new customers; (iv) reduces or has the potential to reduce greenhouse gas emissions through a reduction in natural gas system leaks; and (v) is not included in the current rate base of the gas company as determined in the gas company’s most recent base rate proceeding. (4) “Plan” means a plan that a gas company files under subsection (e) of this section. (5) “Project” means an eligible infrastructure replacement project proposed by a gas company in a plan filed under this section. (b) It is the intent of the General Assembly that the purpose of this section is to allow for the appropriate acceleration of gas infrastructure improvements in the State when: (1) necessary to ensure safety and improve reliability; and (2) consistent with State policy. (c) Nothing in this section may be construed to alter a gas company’s obligation under this division to make improvements to a gas system that are necessary to ensure the safety of the gas system. (d) This section does not apply to a gas cooperative. (e) (1) A gas company may file with the Commission: (i) a plan to invest in eligible infrastructure replacement projects; and (ii) in accordance with paragraph (5) of this subsection, a cost–recovery schedule associated with the plan that includes a fixed annual surcharge on customer bills to recover reasonable and prudent costs of proposed eligible infrastructure replacement projects. (2) A plan under this subsection shall include: (i) a description of each eligible infrastructure replacement project, including the project’s expected useful life; (ii) a time line for the completion of each eligible project; (iii) the estimated cost of each project; (iv) a description of customer benefits under the plan; (v) a demonstration that the gas company has selected and given priority to projects based on risk to the public and cost–effectiveness; (vi) an analysis that compares the costs of proposed replacement projects with alternatives to replacement, including leak detection and repair; (vii) a plan for notifying customers affected by proposed projects at least 6 months in advance of construction; and (viii) any other information the Commission considers necessary to evaluate the plan. (3) A customer notification plan required under paragraph (2) of this subsection shall provide for: (i) an initial notification of construction in a manner determined by the Commission; (ii) at least two subsequent notifications of construction in a manner determined by the Commission; and (iii) the communicating of: 1. a complete and accurate description of project activities; and 2. any other information the Commission considers necessary to evaluate the plan. (4) (i) When calculating the estimated cost of a project under paragraph (2) of this subsection, a gas company shall include: 1. the pretax rate of return on the gas company’s investment in the project; 2. depreciation associated with the project, based on new assets less retired plant; and 3. property taxes associated with the project, based on new assets less retired plant. (ii) The estimated project costs described in subparagraph (i) of this paragraph are collectible at the same time the eligible infrastructure replacement is made. (iii) The pretax rate of return under subparagraph (i)1 of this paragraph shall: 1. be calculated using the gas company’s capital structure and weighted average cost of capital as the Commission approved in the gas company’s most recent base rate proceeding; and 2. include an adjustment for bad debt expenses as the Commission approved in the gas company’s most recent base rate proceeding. (5) For a plan filed under this section: (i) the cost–recovery schedule shall include a fixed annual surcharge that: 1. may not exceed $2 each month on each residential customer account; and 2. for each nonresidential customer account, may not be less than the fixed annual surcharge applicable to a residential customer account, but shall be capped under item (ii) of this paragraph; and (ii) to create a surcharge cap for all customer classes, costs shall be allocated to nonresidential and residential customers consistent with the proportions of total distribution revenues that those classes bear in accordance with the most recent base rate proceeding for the gas company. (6) For a gas company to recover costs associated with eligible infrastructure replacement projects, a plan shall demonstrate: (i) customer benefits; and (ii) that the gas company has: 1. analyzed available cost–effective options to defer, reduce, or remove the need to replace, construct, or upgrade components of the gas company’s distribution infrastructure, including leak detection and repair; and 2. met any other requirements established by the Commission when setting rates under this title. (7) A plan under this subsection shall be filed separately from a base rate proceeding. (8) 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. (9) Any adjustment for return on equity based on an approved plan only shall be considered and determined in a subsequently filed base rate case. (f) (1) Within 180 days after a gas company files a plan, the Commission: (i) may hold a public hearing on the plan; and (ii) shall take a final action to approve or deny the plan. (2) 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. (3) The Commission may approve a plan if it finds that the investments and estimated costs of eligible infrastructure replacement projects are: (i) reasonable and prudent; (ii) designed to improve public safety or infrastructure reliability over the short term and long term; and (iii) required to improve the safety of the gas system after consideration of alternatives to replacement. (4) (i) The Commission shall approve the cost–recovery schedule associated with the plan at the same time that it approves the plan. (ii) Costs recovered under the schedule approved in subparagraph (i) of this paragraph may relate only to the projects within the plan approved by the Commission. (5) 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. (g) (1) 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. (2) 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. (h) The Commission may authorize a gas company to use a mechanism to promptly recover reasonable and prudent costs of investments for eligible infrastructure replacement projects that: (1) are part of a plan approved under this section or implemented under subsection (g) of this section; and (2) accelerate gas infrastructure improvements in the State. (i) (1) (i) A surcharge under this section shall be in effect for 5 years from the date of initial implementation of an approved plan. (ii) 1. Before the end of the 5–year period, the gas company shall file a base rate case application. 2. In a base rate proceeding filed under subsubparagraph 1 of this subparagraph, if a plan approved by the Commission remains in effect: A. eligible infrastructure project costs included in base rates in accordance with a final Commission order on the base rate case shall be removed from a surcharge; and B. the surcharge mechanism shall continue for eligible future infrastructure project costs that are not included in the base rate case. (2) (i) If the actual cost of a plan is less than the amount collected under a surcharge, the gas company shall refund to customers the difference on customer bills, including interest. (ii) If the actual cost of a plan is more than the amount collected under the surcharge and the Commission determines that the higher costs were reasonably and prudently incurred, the Commission shall authorize the gas company to increase the surcharge to recover the difference, subject to the rate limit under subsection (e)(5) of this section. (j) Each year a gas company shall file with the Commission a reconciliation to adjust the amount of a surcharge to account for any difference between the actual cost of a plan and the actual amount recovered under the surcharge. (k) If, after approving a surcharge in a plan, the Commission establishes new base rates for the gas company that include costs on which the surcharge is based, the gas company shall file a revised rate schedule with the Commission that subtracts those costs from the surcharge. (l) (1) The Commission may review a previously approved plan. (2) 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: (i) reduce future base rates or surcharges; or (ii) alter or rescind approval of that part of the plan.

Md. Code, Public Utilities § 4-211

(a) (1) 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: (i) the remediation relates to the contamination of the real property; and (ii) the real property is or was used to provide manufactured or natural gas service directly or indirectly to the gas company’s customers or the gas company’s predecessors. (2) Environmental remediation costs incurred by a gas company may be included in the gas company’s necessary and proper expenses regardless of whether: (i) the real property is currently used and useful in providing gas service; or (ii) the gas company owns the real property when the rate is set. (3) 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. (b) The Commission shall balance the interests of a gas company with those of the gas company’s customers when setting the recovery schedule for the environmental remediation costs incurred by the gas company. (c) (1) 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. (2) 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.

Md. Code, Public Utilities § 4-212

(a) (1) In this section the following words have the meanings indicated. (2) “Contract capacity” means the amount of monthly peak load requirements: (i) that is mutually agreed to by an electric company and a large load customer for each month remaining in a contract term after the load ramp period has ended; and (ii) for which: 1. the electric company agrees to provide all of the components of retail electric service subject to the terms and conditions in its tariffs; and 2. the large load customer agrees to purchase service at that load level for the stated term of the contract and under the same terms and conditions as those stated in the contract. (3) “Large load customer” means a commercial or industrial customer for retail electric service that: (i) has or is projected to have an aggregate monthly demand of at least 100 megawatts; and (ii) has or is projected to have a load factor of over 80%. (4) “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. (b) It is the intent of the General Assembly that residential retail electric customers in the State should not bear the financial risks associated with large load customers interconnecting to the electric system serving the State. (c) (1) (i) On or before September 1, 2026, each investor–owned electric company and each electric cooperative shall submit to the Commission for approval a specific rate schedule for large load customers that accomplishes the intent of subsection (b) of this section. (ii) Each municipal electric utility that receives an application for retail electric service from a large load customer shall submit to the Commission for approval a specific rate schedule for large load customers. (2) (i) Service under a specific rate schedule shall be available to large load customers that will use, within the initial contract term: 1. a monthly maximum demand of more than 100 megawatts at a single location; or 2. an aggregated contract capacity in the electric company’s service territory of more than 100 megawatts. (ii) Except as provided in subparagraph (iii) of this paragraph, large load customers that qualify for a specific rate schedule after the effective date of that schedule: 1. shall take service under the specific rate schedule; and 2. may not be allowed to take service under any other existing schedule. (iii) A specific rate schedule does not apply to the facility of an existing large load customer that has signed a service agreement before the effective date of the schedule if: 1. the large load customer’s existing load does not expand by more than 25 megawatts at that facility under the existing service agreement; or 2. the large load customer does not sign a new service agreement to expand the facility’s load by more than 25 megawatts above the contract capacity of the existing service agreement. (d) In making a determination on whether to approve a specific rate schedule submitted under subsection (c) of this section, the Commission shall consider whether the rate schedule: (1) requires a large load customer to cover the just and reasonable costs associated with any electric transmission or distribution system buildout required to: (i) interconnect the large load customer to the electric system serving the State; or (ii) serve the large load customer; (2) protects residential retail electric customers from the financial risks associated with large load customers through the use of: (i) load ramp periods; (ii) minimum billing demand for electric distribution and transmission service that is a high percentage of a large load customer’s contract capacity; (iii) long–term contractual commitments and exit fees; (iv) guarantee or collateral requirements; and (v) penalties and reimbursement requirements for the large load customer if the large load customer delays or cancels a project after the electric company has begun buildout to accommodate the large load customer; and (3) 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. (e) Before signing a contract for service under a specific rate schedule submitted under subsection (c) of this section, a large load customer under the schedule is required to: (1) 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; (2) designate a specific site where the large load customer’s project will be constructed and served by the electric company; (3) own or have the exclusive right to use the land designated in item (2) of this subsection for the project; and (4) meet any other requirements specified under the rate schedule. (f) (1) On or before June 1, 2026, the Commission shall adopt regulations to carry out this section. (2) The regulations shall: (i) establish minimum notice requirements and deadlines related to load study requests and contract terminations and adjustments; (ii) if considered necessary by the Commission, specify common forms of acceptable collateral to satisfy the requirements of this section; and (iii) establish deadlines related to completion of load studies and payment of fees.

Md. Code, Public Utilities § 4-213

(a) This section applies only to a public service company that is an electric company, a gas company, or a combination gas and electric company. (b) Unless otherwise authorized by law, the Commission may approve the use of a multiyear rate plan for distribution base rates only if the plan: (1) demonstrates the customer benefits of the investment; and (2) does not allow for the public service company to file for reconciliation of cost or revenue variances of the approved revenue component used by the Commission to establish just and reasonable rates. (c) A public service company that files or has filed an application for a multiyear rate plan may not subsequently file for reconciliation of cost or revenue variances of the approved revenue component used by the Commission to establish the multiyear rates unless the filing for reconciliation was made on or before January 1, 2025.

Md. Code, Public Utilities § 4-214

(a) In this section, “nonpipeline alternative” means an investment or activity that defers, reduces, or eliminates the need to construct a new gas pipeline. (b) Nothing in this section may be construed to restrict an investor–owned gas company’s ability to make improvements to its gas system to ensure the safe and reliable operation of the system. (c) An investor–owned gas company may recover reasonable and prudent costs associated with a planned gas infrastructure investment if the investor–owned gas company demonstrates at a rate setting proceeding: (1) the customer benefits of the investment; (2) 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: (i) for new investments unrelated to safety, nonpipeline alternatives; and (ii) leak detection and repair; and (3) the estimated risk reduction associated with a safety–related investment, if applicable.

Md. Code, Public Utilities § 4-301

(a) Notwithstanding § 4-101 of this title or any other law to the contrary, the Commission may regulate a telephone company through alternative forms of regulation. (b) The Commission may adopt an alternative form of regulation under this section if the Commission finds, after notice and hearing, that the alternative form of regulation: (1) protects consumers by, at a minimum: (i) producing affordable and reasonably priced basic local exchange service, as defined by the Commission; and (ii) ensuring the quality, availability, and reliability of telecommunications services throughout the State; (2) encourages the development of competition; and (3) is in the public interest. (c) An alternative form of regulation may include: (1) price regulation; (2) revenue regulation; (3) ranges of authorized return; (4) rate of return; (5) categories of services; or (6) price indexing.

Md. Code, Public Utilities § 4-302

(a) (1) In this subsection, “operating ratio” means the relationship of common carrier expenses to common carrier operating revenues. (2) In considering proper revenue under subsection (b)(3) of this section, the Commission shall determine a fair and equitable operating ratio. (b) In setting a just and reasonable rate for common carriers, and classifications, regulations, and practices relating to common carriers, the Commission shall consider, among other factors: (1) the inherent advantages of transportation by common carriers; (2) 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 (3) the need of revenues sufficient to enable common carriers to provide these services under honest, economical, and efficient management.

Md. Code, Public Utilities § 4-303

(a) The Commission shall establish pilotage fees and charges for pilotage services to vessels at a just and reasonable rate. (b) The Commission shall give notice and hold a public hearing on each rate proposal as provided in this article. (c) In determining a just and reasonable rate, the Commission shall consider: (1) the draft, dimensions, and tonnage of the vessel piloted; (2) the difficulty and inconvenience of the particular service and the time and skill required to render the service; (3) the time required to render pilotage service at other United States ports and the fees and charges for the service; (4) the public interest in maintaining efficient and reliable pilotage service; and (5) other factors relevant to the determination of a just and reasonable rate. (d) A pilot may not demand or receive a different compensation for providing pilotage service than the rate set by the Commission under this section. (e) The Commission shall impose an assessment on the Association of Maryland Pilots based on assessment guidelines established for public service companies under § 2-110 of this article. The assessment imposed under this subsection may not be less than $25,000. (f) All pilotage fees and charges provided by applicable law shall remain in effect until changed by the Commission.

Md. Code, Public Utilities § 4-303.1

§4–303.1. (a) The Commission shall establish fees and charges for a licensed docking master to provide docking services in the Ports of Maryland at a just and reasonable rate. (b) The Commission shall give notice and hold a public hearing on each rate proposal as provided in this article. (c) In determining a just and reasonable rate, the Commission shall consider: (1) the draft, dimensions, and tonnage of the vessel; (2) the difficulty and inconvenience of the particular service and the time and skill required to render the service; (3) the time required to render docking service at other United States ports and the fees and charges for the service; (4) the public interest in maintaining efficient and reliable docking service; and (5) other factors relevant to the determination of a just and reasonable rate. (d) A docking master licensed under Title 5.5 of the Business Occupations and Professions Article may not demand or receive a different compensation for providing docking services than the rate set by the Commission under this section. (e) The Commission shall impose an assessment on the association based on assessment guidelines established for public service companies under § 2-110 of this article. (f) All fees and charges provided by applicable law shall remain in effect until changed by the Commission.

Md. Code, Public Utilities § 4-304

(a) In this section, “jurisdiction” means a county or municipal corporation. (b) This section does not apply if rates for sewage disposal service are specified in a contract between the jurisdictions that supply and receive the sewage disposal service. (c) The Commission shall set only the rates for sewage disposal service that one jurisdiction supplies within the taxable limits of another jurisdiction: (1) on written application by the jurisdiction that receives the service; and (2) in the same way as rates are set for sewage disposal companies.

Md. Code, Public Utilities § 4-305

(a) In this section, “jurisdiction” means a county, sanitary district, or municipal corporation. (b) This section does not affect §§ 35-138, 35-140, 35-141, and 35-145 of the Code of Public Local Laws of Baltimore County. (c) The Commission shall set only the rates for water that one jurisdiction supplies within another jurisdiction: (1) on written application by the jurisdiction that receives the water; and (2) in the same way as rates are set for water companies.

Md. Code, Public Utilities § 4-306

(a) This section applies to any municipal corporation in Talbot County that supplies water to an area outside the boundaries of the municipal corporation. (b) On written application, the Commission may grant the applicant a certificate of authority to establish a service area outside of its boundaries and to supply that service area with water.

Md. Code, Public Utilities § 4-307

(a) In this section, “rate consolidation” means the use of the same or similar rates or tariff schedules of rates for customers of the same class for two or more water or sewage disposal systems even if the systems are not physically interconnected. (b) After notice to customers and holding a public hearing and an evidentiary hearing, the Commission may authorize a rate consolidation of two or more water or sewage disposal systems if: (1) the water or sewage disposal systems have common ownership; and (2) the rate consolidation is in the public interest.

Md. Code, Public Utilities § 4-308

(a) On or before January 1, 2023, the Commission shall by regulation or order establish an administrative process to approve supply offers for electricity or gas for households in the State that receive energy assistance through a program administered by the Office of Home Energy Programs. (b) (1) 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: (i) provide electricity or gas to households in the State that have received energy assistance during the previous fiscal year; (ii) renew a contract to provide electricity or gas to households in the State that are enrolled in an energy assistance program; or (iii) charge a termination fee to households in the State that have received energy assistance during the previous fiscal year. (2) 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. (3) If a third–party retail supplier’s offer is not approved by the Commission, the third–party retail supplier may not: (i) receive funds from an energy program administered by the Office of Home Energy Programs; or (ii) charge a customer receiving assistance from an energy program administered by the Office of Home Energy Programs. (c) The Office of Home Energy Programs may allocate funding toward supplier charges as part of arrearage assistance for contracts that preceded a customer’s application for energy assistance from the Office of Home Energy Programs. (d) (1) On or before September 1 each year, the Commission shall publish a report on the Commission’s website that includes: (i) the names and the total number of suppliers that applied for approval to sell to energy assistance households; (ii) the names and the total number of suppliers that were approved under subsection (a) of this section; (iii) the total number of suppliers that were rejected, if any; (iv) the total number of energy assistance households that were signed up with a third–party supplier, as reported by the supplier; (v) the total number of submitted supplier enrollments that were denied because the supplier was not approved to serve energy assistance households, as reported by the utility; and (vi) the total number of self–identified energy assistance households that filed complaints about their third–party supplier. (2) 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.

Md. Code, Public Utilities § 4-309

(a) (1) In this section the following words have the meanings indicated. (2) “Eligible limited–income customer” means a residential customer of a utility company with annual income that: (i) 1. is at or below 175% of the federal poverty level; or 2. for a customer at least 67 years of age, is at or below 200% of the federal poverty level; or (ii) meets a broader designation approved by the Commission. (3) “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. (4) “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. (5) (i) “Utility company” means an electric company, a gas and electric company, or a gas company. (ii) “Utility company” does not include a small rural electric cooperative. (b) The General Assembly finds and declares that the societal benefits of a well–constructed limited–income mechanism to benefit Maryland’s eligible limited–income customers are in the public interest. (c) (1) Subject to the approval of the Commission, a utility company shall adopt a limited–income mechanism to benefit an eligible limited–income customer. (2) 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. (3) 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. (d) (1) A utility company that proposes a limited–income mechanism for Commission approval under subsection (c) of this section shall include the proposal in: (i) a separate application for approval of the mechanism; or (ii) only with the prior approval of the Commission, an application for a base rate proceeding, including an alternative rate proceeding, or any other proceeding to alter the utility company’s base rates under the authority of the Commission. (2) A proposal submitted under this section shall allocate the prudently incurred costs of the limited–income mechanism across rate classes. (3) The proposal shall include: (i) a detailed description of the proposed mechanism; (ii) the proposed method for allocating the mechanism’s costs across customer classes; (iii) the rationale supporting the utility company’s proposal for a mechanism to benefit the eligible limited–income customers in the utility company’s service territory; (iv) a time frame and process for the Commission to review the effectiveness of the mechanism after implementation; and (v) any other information the Commission considers necessary or useful to evaluate the proposal. (e) In evaluating a limited–income mechanism, the Commission shall consider: (1) the degree to which the mechanism promotes affordability of electricity or natural gas for limited–income customers; (2) the public interest in allocating the costs of the mechanism between the utility company’s shareholders and rate payers; (3) the impact on rates, utility operating costs, customer arrearages, customer disconnections, uncollectible costs, and successful completion of payment plans; (4) the ability of a limited–income customer to continue to receive benefits when relocating within the same service territory; (5) coordination of benefits under the mechanism with any other public or private assistance that may be available to the customer; (6) a minimum level of support or assistance structure to provide equitable availability of limited–income assistance across the State; and (7) any other information the Commission considers appropriate. (f) If an approved limited–income mechanism requires that the Office of Home Energy Programs must certify an eligible limited–income customer’s qualifications to participate in a limited–income mechanism, the Office shall certify an eligible limited–income customer’s qualifications before the customer may participate in the mechanism. (g) An eligible limited–income customer who participates in a mechanism under this section may also be eligible for other assistance programs offered in the State, including those offered by a utility company or the Office of Home Energy Programs, the Department of Housing and Community Development, or any other public or private source.

Md. Code, Public Utilities § 4-401

As it considers necessary, and in accordance with the requirements of § 4-402 of this subtitle, the Commission may allow a gas company or electric company to establish a sliding scale to adjust costs of its fuel, purchased power, or purchased gas.

Md. Code, Public Utilities § 4-402

(a) (1) This section applies to: (i) electric fuel rate adjustment clauses; (ii) purchased power adjustment clauses; and (iii) purchased gas adjustment clauses. (2) This section does not apply to a small rural electric cooperative. (b) A gas company or electric company that directly passes on to its customers changes in fuel costs, costs of purchased power, or costs of purchased gas shall verify and justify the adjusted costs to the Commission each month. (c) The Commission shall order a company to charge off and amortize, by means of a temporary decrease of rates, any charge the Commission finds is unjustified because: (1) the company failed to show that the charges were based solely on increased costs of fuel, purchased power, or purchased gas; (2) the company failed to follow competitive practices in procuring and purchasing fuel, power, or gas; or (3) the company failed to show that its practices in procuring and purchasing fuel were reasonable. (d) At least once every 12 months, the Commission shall conduct a public evidentiary hearing on any changes in costs that a company directly passes on to its customers under this section.

Md. Code, Public Utilities § 4-501

(a) In its utility operations, a public service company may not: (1) 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 (2) demand or collect: (i) compensation that differs from compensation specified in its rate schedules that are in force at the time of the demand or collection; or (ii) a charge that violates this division. (b) A person may not assist, allow, or attempt to assist or allow the actions prohibited under this section by any means, including false billing, false classification, false weighing, or false report of weight, even if a public service company or its personnel consents to or connives with the prohibited action.

Md. Code, Public Utilities § 4-502

In an action by a public service company to collect a charge, the public service company may not recover any amount if, in the transaction that is the subject of the action, the public service company demanded a rate greater than that lawful under this division when the charge was made.

Md. Code, Public Utilities § 4-503

(a) This section does not apply to service rendered or commodities furnished: (1) to the officers, employees, pensioners, and immediate family members of the officers, employees, and pensioners of a public service company; (2) to the United States, the State, or a local government; (3) to provide relief in cases of general epidemic, pestilence, flood, or other similar calamity; (4) in the case of common carriers, to transport: (i) personnel of another common carrier that reciprocates for personnel of the transporting common carrier; (ii) hospital patients; (iii) indigent, destitute, and homeless individuals; (iv) persons exclusively engaged in charitable work; (v) residents of federal or State veterans homes, including those about to enter a home or those returning from a home; (vi) railway mail service employees and baggage agents; (vii) post office, customs, and immigration inspectors; (viii) newspaper vendors; (ix) property for exhibition carried to or from fairs and expositions; (x) employees of sleeping car companies, express companies, telegraph companies, and telephone companies doing business along the line of the common carrier; (xi) persons and property incident to or connected with contracts for construction, operation, or maintenance of the plant of the transportation company, to the extent provided in the contracts; (xii) individuals injured in accidents and physicians, nurses, or other necessary caretakers attending the injured individuals in transit; (xiii) children under the age of 5 years for no charge; (xiv) children under 12 years for half fare; or (xv) persons at free or reduced rates that are otherwise authorized by law; (5) in the case of common carriers, for the issuance of mileage, excursion, or commuter tickets; (6) 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; (7) 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; (8) to telephone lifeline service provided to eligible subscribers under § 8–201 of this article; or (9) to electricity or gas service provided to eligible limited–income customers through an approved limited–income mechanism under § 4–308 of this title. (b) For any service rendered or commodity furnished, a public service company may not directly or indirectly, by any means, including special rates, rebates, drawbacks, or refunds: (1) charge, demand, or receive from a person compensation that is greater or less than from any other person under substantially similar circumstances; (2) extend a privilege or facility to a person, except those privileges and facilities that are extended uniformly to all persons under substantially similar circumstances; (3) discriminate against a person, locality, or particular class of service; or (4) give undue or unreasonable preference to or cause undue or unreasonable prejudice to a person, locality, or particular class of service.

Md. Code, Public Utilities § 4-504

(a) This section applies only to a public service company that is an investor–owned electric company, gas company, or combination gas and electric company. (b) A public service company may not recover through rates any costs associated with: (1) 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; or (2) 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.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://mgaleg.maryland.gov/mgawebsite/Laws/StatutesFetched: 10/16/2026