How Electricity Rates Actually Get Set in Maryland

By Max Fisher · Published 2026-10-22 · Updated 2026-10-24

Short answer. Your electric utility cannot simply decide to charge you more for delivering power. In Maryland, a utility that wants higher delivery rates has to file a rate case with the Maryland Public Service Commission (PSC), back it with evidence, face challenges from other parties, including the state’s residential ratepayer advocate, and then live with the Commission’s written order. Because a heat pump runs on electricity, this process matters to anyone comparing quotes from heat pump installers against a gas, oil or propane system. You can follow every step of it yourself.

Who regulates what

The Maryland Public Service Commission regulates gas, electric, telephone, water and sewage companies, among others. Its stated mission is “to ensure safe, reliable, and economic public utility and transportation service” in Maryland. For electricity, that includes the delivery rates charged by the state’s utilities, such as BGE, Pepco, Delmarva Power and Potomac Edison, and the Southern Maryland Electric Cooperative (SMECO), which is member-owned.

The Maryland Office of People’s Counsel (OPC) is a separate state office that represents residential customers in utility cases. It files testimony, cross-examines utility witnesses and publishes consumer guides to pending cases on its website.

Delivery versus supply

Your bill has two broad parts:

Delivery. The cost of the poles, wires, substations, meters and the utility’s operations that bring power to your house. This is what a utility rate case sets.
Supply. The electricity itself. Maryland lets customers shop for a retail supplier, and OPC’s site links to resources on shopping for gas and electricity.

OPC says recent bill increases have come mostly from rising delivery charges: “Your energy bill is going up mostly because the costs your utility charges to deliver gas and electricity to your home have been rising significantly in recent years.” It also notes that very hot or cold weather drives bills up because you use more energy.

How a rate case works

The steps are the same for any Maryland utility:

The utility files. It submits proposed rates with testimony and exhibits explaining why, such as new infrastructure, operating costs and its requested return.
Other parties intervene. OPC participates on behalf of residential customers. Other parties, such as large customers or advocacy groups, may join too.
Evidence is tested. Parties file their own expert testimony. Witnesses can be cross-examined in evidentiary hearings.
The public can comment. The PSC posts how to submit public comments and lists upcoming public comment hearings on its site.
The Commission decides. The PSC issues a written order that can grant the request, grant less or deny it. Utilities do not automatically get what they ask for.

Every filing, order and hearing schedule is public. The PSC’s case search lets you look up a case by number, and its proceedings dashboard tracks major cases, including rate cases, through each step.

A live example: BGE’s 2026 electric rate case

On this page’s publication date, OPC’s site described a pending case that shows the process in motion:

The request. BGE filed its most recent electric rate case on July 6, 2026, proposing to collect an additional $156.1 million. OPC calculated that this would raise residential electric distribution rates by roughly 17 percent, from 4.9 cents to 5.8 cents per kilowatt-hour, including a reconciliation charge the PSC authorized in 2025 that runs through December 2027. BGE did not request a gas distribution increase in this case.
The context OPC gives. If the PSC grants it, OPC says BGE’s electric distribution rates will have risen 58 percent since 2020.
The challenge. On September 22, 2026, OPC filed expert testimony recommending the PSC reject the increase and instead reduce BGE’s electric distribution rates by $43.9 million.

The PSC has not ruled on that case as of this page’s publication. The outcome will be in a written order on the docket. That is the point of this page: the number that ends up on your bill comes from that order, not from either side’s opening position.

Other charges on your bill

Not every line on a bill comes from a base rate case. For example, EmPOWER Maryland efficiency programs are funded by a charge on customers’ energy bills, according to BGE’s program page. The Maryland Energy Administration’s EmPOWER page notes that program filings for the 2024 to 2026 cycle sit in a separate PSC case, No. 9705. If you want to know where a specific charge comes from, the PSC docket is where its approval lives.

Reading your own bill before you compare systems

Before you put numbers into any heat pump comparison, pull out a year of bills and note four things:

Your total kilowatt-hours by month. Winter months show how much electricity you already use for heat, if any.
Your effective rate. Divide the total electric charges by the kilowatt-hours for a few months. That all-in number, delivery plus supply plus riders, is what an extra kilowatt-hour of heat pump use actually costs you.
Who supplies your power. If you have a third-party supplier, its rate and contract term matter as much as the utility’s.
Your fuel bills for the same months, if you heat with gas, oil or propane, so the comparison runs on the same winter.

Give those figures to every installer who quotes and ask them to run their operating-cost estimate with your numbers, not an average.

Why this matters for a heat pump

A heat pump moves your heating from a fuel bill to your electric bill, so the electric rate is a real input. Gas rates are set by the same Commission through their own cases, and OPC also tracks the costs of the gas system. Oil and propane are not rate-regulated the same way.

What that means in practice:

Use today’s actual rates. Take the per-kilowatt-hour figure from your bill or your utility’s tariff when you compare operating costs.
Test a higher-rate scenario. Pending cases like BGE’s show rates can move meaningfully. See whether the heat pump still works for you if electricity costs more.
Treat any long-term rate projection as an estimate, including any on this site. Future rates will be set by orders that do not exist yet.
Cut the load. A sealed, insulated house needs less heat at any price. See is your home ready.

Regional demand from data centers is one pressure on the grid behind these cases. See data center load growth for which figures about it are verifiable.

How to follow and take part

Find your utility’s cases with the PSC’s case search or its proceedings dashboard.
Read OPC’s consumer guides to pending cases, which explain the issues in plain language, and its utility rates and basics page.
Comment. The PSC accepts public comments on cases and holds public comment hearings, including virtual ones.
Complain about service. The PSC’s Consumer Affairs Division answers customer questions and handles utility service complaints.
Learn the basics. OPC runs short “Utility Wise” webinars on energy use and bills.

How to verify this yourself

Maryland Public Service Commission: case search, hearings, comments
Maryland Office of People’s Counsel: consumer guides and testimony
Your utility’s current tariff, which lists the PSC-set rates you pay today

Tell us if a source changes. To get heat pump quotes you can compare at your real rates, start with your city on the DMV directory.