LANDOVER, Md. — Baltimore Gas and Electric (BGE) customers across Maryland will see a significant increase in their electricity bills starting June 1, 2025, driven by rising capacity auction prices and the Talen Energy reliability-must-run (RMR) fee. This price hike, following earlier increases in January 2025, has sparked frustration among customers already facing high energy costs.
The primary cause of the increase is a spike in capacity auction prices, where power companies bid to ensure future electricity availability. Additionally, the Talen Energy RMR fee covers payments to keep the Brandon Shores and H.A. Wagner power plants operational beyond their planned retirement dates to maintain grid reliability. BGE spokesperson Nick Alexopulos explained, “There’s an acute misalignment between supply and demand for electricity in Maryland. In short, we don’t have enough power plants to meet the energy demand.”
PJM Interconnection, the regional grid operator, has mandated that some retiring power plants continue operating to ensure grid stability. “PJM Interconnection has determined that those power plants have to run past their retirement date to maintain reliability of the entire electric grid in the region,” Alexopulos said. However, legislators have criticized PJM for an energy supply undercount in recent auctions, which caused regional electricity costs to surge from $2.2 billion to $14.7 billion.
BGE clarified that the increase is not due to changes in its distribution rates but rather the cost of electricity itself. Customers can expect an estimated $40 increase in their highest monthly bill, particularly during peak summer months. “That said, if July, which is typically the hottest month where customers use the most energy, is much hotter than expected, those bills are going to be higher because you’re going to be using more energy,” Alexopulos said.
Customer reactions reflect frustration but also resilience. “Not pleased,” said Kyla Cools. “Not thoroughly surprised either.” Peter Bearden noted, “It just increases the burden with the rest of inflation.” Some customers are adapting to the increase. “Am I going to feel bad about it? Sure, but you can’t stop them,” said Jim Considine. Cools is monitoring her usage metrics closely, while Bearden plans to delay using air conditioners until late July. “Usually, we don’t put in our air conditioners until middle or late July, and I’m sure we’ll do the same thing this year,” he said.
The Talen Energy RMR fee involves fixed payments to Talen Energy for operating the Brandon Shores and H.A. Wagner plants. PJM pays $312 per megawatt per day for Brandon Shores, totaling about $145 million annually, plus a $5 million performance incentive. For H.A. Wagner, PJM pays $137 per megawatt per day, about $35 million per year, with a $2.5 million incentive. These costs, outlined in a January 2025 settlement, are passed on to customers to ensure grid reliability.
To help manage higher bills, BGE offers energy-saving tips:
- Schedule regular HVAC maintenance for efficiency.
- Lower water heater temperatures to 120 degrees.
- Raise thermostats to a safe, comfortable level.
- Monitor energy usage via the BGE My Account portal or mobile app.
This increase follows earlier rate hikes in January 2025, which raised average residential gas bills by 9% and electric bills by 7%, with some customers seeing winter bills rise by over $200. These were driven by higher distribution costs, a 30% rise in natural gas prices, and state-mandated energy efficiency programs. In 2023, the Maryland Public Service Commission approved BGE’s multi-year rate plan, allowing $408 million in increases over three years for gas and electric services. Baltimore City Council President Zeke Cohen has called for transparency on BGE’s proposed 2026 rate increases, reflecting ongoing concerns about affordability.
As Maryland faces these energy challenges, customers are encouraged to adopt conservation practices to mitigate the financial impact of rising electricity costs.
Update: The Southern Maryland Chronicle incorrectly stated that PJM “mandated the retiring of some power plants. PJM cannot mandate that a power plant stay online, they can only request that it remain in operation if it’s found through its analysis that shutting it down would create adverse reliability impacts.
