Dig. Bill. Profit. Repeat. The BGE Rate Scam Explained.
How Exelon Extracts Billions from Baltimore Through BGE's Delivery Fees
Baltimore Gas & Electric customers are watching their bills double this winter. Some have tripled. A woman in Irvington saw her bill go from $200 to $1,110 in a few months. Another resident told CBS Baltimore hers jumped by over $1,000 compared to the previous year. The Office of People’s Counsel is “flooded with calls from customers upset about their bills and unable to pay them.”
BGE blames cold weather. But look at your bill breakdown. The delivery fee—the charge for moving gas through pipes—now makes up two-thirds of the typical gas bill. Ten years ago, it was one-third. Customers are paying $2 in delivery for every $1 of actual gas. You can’t conserve your way out of that. You can turn your thermostat down to 66, replace your windows, insulate your attic. The delivery fees eat you alive regardless of how much energy you actually use.
Roxanne Tyler did all of that. She told WMAR: “You think turning your heat down to 67 or 66 will save you money, and you see no difference in your bill because the delivery fees are just so expensive.”
The delivery fee is the bill now. The gas is almost incidental.
Ten days ago, Maryland’s top utility regulator, PSC Chair Frederick Hoover, stepped down from his position halfway through a five-year term. The Baltimore Banner’s headline captured the moment: “Maryland’s top utility regulator steps down amid anger over high energy prices.” No reason was given for his resignation. He’ll remain on the commission, just not leading it. The timing—two days before the General Assembly convenes, in the middle of the worst rate crisis in BGE’s history—tells you everything about how well this system is working.
I started paying attention. I wrote letters to my City Council representatives, to Senator Bill Ferguson, to my delegates. I wanted to understand what’s happening. And the more I looked, the worse it got.
BGE is a subsidiary of Exelon Corporation, a Chicago-based utility holding company traded on NASDAQ under the ticker EXC. Exelon acquired BGE’s parent company, Constellation Energy, for $7.9 billion in 2012. Since that acquisition, BGE’s gas delivery rates have more than tripled and its electric distribution rates have nearly doubled. Before the acquisition, BGE’s annual profits never exceeded $150 million. In 2024, BGE’s profits hit $527 million. Exelon’s total profits that year: $2.46 billion.
Here’s where it gets instructive. Maryland’s People’s Counsel David Lapp—the state official whose job is to advocate for utility customers—has explicitly connected BGE’s rate hikes to Exelon’s shareholder promises: “The reality is that BGE’s out-of-state parent company, Exelon, pulls the strings at BGE and drives its business strategy.” He believes BGE will continue to seek rate increases “to do its part to achieve Exelon’s investor growth goals.”
In Exelon’s own investor communications, they brag about it. Their 2024 annual report cited higher utility earnings “primarily due to distribution rates at BGE” as a driver of their financial performance. They promised shareholders 5-7% annualized earnings growth through 2028. That growth has to come from somewhere. It comes from us.
Calvin Butler, Exelon’s CEO, made $14.7 million in total compensation in 2024—a 19.5% increase from the prior year. His pay is 100 times the median Exelon employee’s salary. While Baltimore residents were getting shut-off notices on the coldest days of the year, Exelon executives were receiving $9 million stock awards and personal use of corporate aircraft.
This is theft. Legal theft, sanctioned by regulators, but theft nonetheless. BGE has a monopoly. You cannot choose another gas company. You cannot opt out of delivery fees. You pay what they charge or you freeze.
The mechanism works like this: BGE spends money on infrastructure. Under Maryland’s regulatory framework, they recover those costs from customers plus a guaranteed profit margin. The more they spend, the more they profit. Maryland PIRG has been documenting this for years: “The more a utility spends on new pipes and equipment, the more it can profit. This is a powerful incentive for wasteful capital spending.”
They have a financial incentive to spend as much as possible. Not to spend wisely. Not to spend efficiently. Just to spend. Every dollar of infrastructure investment returns guaranteed profit to Exelon shareholders. The incentive structure is insane.
The program at the center of all this is called Operation Pipeline. BGE has spent $1.4 billion on it over the last decade. They’re planning to spend $4 billion total. But here’s the kicker: because of how utilities finance capital projects, the Office of People’s Counsel projects that $4 billion will actually cost ratepayers $19.5 billion over the life of the debt.
Nineteen and a half billion dollars. For a pipeline replacement program that hasn’t even made us safer. A 2025 PSC report found BGE’s mismanagement actually increased the risk of gas pipeline explosions. Hazardous leaks per year have increased from 2,400 in 2011 to over 4,000 in 2023. In August 2024, a gas explosion in Bel Air killed a homeowner and a BGE contractor. The pipes involved were only two decades old.
We’re paying $19.5 billion for a program that’s making things worse. And BGE profits either way.
Compare BGE to Washington Gas, which serves the D.C. metro area. In 2015, both companies charged about 42 cents per therm for delivery. After BGE’s February 2026 increase, their rate hit 97 cents per therm—more than double Washington Gas’s current rate. The Office of People’s Counsel estimates that difference could cost the average BGE customer about $500 more this year for the same service.
BGE will tell you the comparison isn’t fair. They’ll point to different service territories, different customer usage patterns. But David Lapp addressed this directly: “Baltimore Gas and Washington Gas do have different service territories, but they’re probably not that different, where you have one company’s rates triple over a period of time where another company’s rates just go up at the rate of inflation.”
The same pattern holds for electric. Potomac Edison, which serves Western Maryland, has increased rates just twice in 25 years compared to ten times since 2012 for BGE. Their delivery rate is less than half of BGE’s. Both companies have old infrastructure. Both operate under Maryland law. The difference is that BGE is owned by Exelon, and Exelon has promised its shareholders continuous growth.
City Council President Zeke Cohen has been one of the loudest voices on this. At a December press conference, he held up Exelon’s quarterly earnings report and read the corporate language out loud: gains were “primarily due to distribution rates associated with updated recovery of investments.” Then he translated: “In other words, they dig up our pipes. We pay the bill. And their shareholders get a windfall.”
That’s the scam. That’s the entire business model. Dig. Bill. Profit. Repeat.
There’s been some legislative movement. Governor Moore signed the Ratepayer Protection Act in 2025, which requires utilities to prioritize safety and adds cost controls. The General Assembly passed laws prohibiting the “reconciliation” process that let BGE go back to ratepayers for cost overruns. But the damage is baked in. Multi-year rate plans already approved by the PSC continue rolling out. Rates went up January 1, 2026. More increases hit in February and March.
And now the chair of the PSC has stepped down. Frederick Hoover, who came to the commission from the Office of People’s Counsel—the very office that advocates for ratepayers—resigned his leadership position just as the crisis reaches its peak. Consumer advocate Emily Scarr praised him for trying to “rein in wasteful utility spending”. Maybe he tried. It wasn’t enough.
Here’s the absurdity that tells you everything about how BGE views its relationship with captive customers: when the company owed Baltimore City $670,000 for billing errors, their initial repayment plan would have taken 195 years to complete through credits on city accounts. One hundred ninety-five years. The city eventually negotiated a lump sum, but think about that offer for a second. BGE can come after you immediately if you miss a payment. They can shut off your heat in January. When they owe you money, they wanted two centuries to make it right.
That’s not a company that respects its customers. That’s a company that knows you have no choice.
The PSC could freeze rates, but they’ve never rejected a BGE increase request. Lawmakers passed reforms, but they can’t undo what’s already approved. The Office of People’s Counsel fights hard, but they’re outgunned by a company that spent over $2.2 million on lobbying in 2024 and employs nearly two-thirds of all registered utility lobbyists in the state.
If the People’s Counsel’s projections hold, monthly winter delivery charges could double again by 2035—reaching $450 per month for the average customer.
BGE will tell you they’re replacing 160-year-old pipes for your safety. They’ll say the PSC approved everything. They’ll point to supply costs and cold weather. Some of that is technically true. But it doesn’t explain why their profits tripled while their customers’ bills did too. It doesn’t explain why hazardous leaks increased during a decade of record infrastructure spending. It doesn’t explain why Baltimore homeowners pay $2 in delivery for every $1 of actual gas. And it doesn’t explain why Exelon’s CEO makes $14.7 million while Baltimore families choose between heat and groceries.
If you’re angry, good. You should be. This is your money being extracted by a Chicago corporation that views your home as an asset to be harvested. Write your legislators. Show up to PSC hearings. Pay attention to the rate cases coming in 2026. Talk to your neighbors. Organize.
The only thing that might change this is enough people refusing to accept that a company gets to take whatever it wants while hiding behind the phrase “approved by regulators.” The PSC works for us. The General Assembly works for us. Governor Moore works for us. Make them act like it.
The bills are real. The $527 million in BGE profits are real. The $14.7 million CEO salary is real. The 195-year repayment plan was real. The resignation of the PSC chair—ten days ago, with no explanation—is real. And next month, when another increase lands and your February bill forces you to choose between heat and medication, someone at Exelon headquarters in Chicago will be very happy with how this system works.
It doesn’t have to. We just have to be angry enough to change it.