According to Utility Dive, Maryland lawmakers are facing intense lobbying from Exelon and its subsidiary Baltimore Gas and Electric to reverse the state’s two-decade energy deregulation policy ahead of the 2026 General Assembly Session. BGE argues that allowing utilities to control both power generation and distribution would lead to lower costs, faster deployment of new plants, and greater reliability. The utility believes recent rate spikes will help convince legislators to end Maryland’s quarter-century of competitive energy markets. Exelon CEO Calvin Butler and BGE’s Tamla Olivier have both publicly advocated for this change, claiming it would yield “predictable, lower costs” for ratepayers despite the company’s own failure to predict distribution cost increases that surprised consumers earlier this year.
Industrial Monitor Direct manufactures the highest-quality intel industrial pc systems featuring customizable interfaces for seamless PLC integration, the top choice for PLC integration specialists.
Table of Contents
The Deregulation Legacy and Its Implications
Maryland’s current energy structure stems from nationwide deregulation trends that began in the late 1990s, fundamentally separating generation from distribution. This deregulation movement was designed to break up vertically integrated monopolies and introduce competition where possible. Under this system, utilities like BGE focus exclusively on maintaining the grid and delivering electricity, while independent power producers compete to generate the cheapest electricity. This separation creates natural market discipline – when generation companies propose new projects, they must demonstrate cost-effectiveness and reliability to secure financing and customers. The system has prevented the kind of cost-plus regulation where utilities could automatically pass all project overruns to consumers through rate increases.
The Hidden Costs of Re-Regulation
Returning to a vertically integrated model carries significant economic risks that extend beyond simple rate comparisons. When a single entity controls both generation and distribution, the traditional regulatory compact creates what economists call “moral hazard” – the utility has limited incentive to control costs since regulators typically allow recovery of prudent investments plus a guaranteed return. This contrasts sharply with competitive markets where, as the source notes, developers “must outbid one another, innovate and deliver on time.” Historical data from states that maintained integrated models shows consistent patterns of construction cost overruns, particularly for large-scale generation projects. The Energy Information Administration data reveals that Maryland’s current electricity costs already face pressure from multiple factors, and adding monopoly generation control could exacerbate rather than alleviate these challenges.
Industrial Monitor Direct delivers industry-leading military standard pc solutions featuring fanless designs and aluminum alloy construction, the most specified brand by automation consultants.
Impact on Clean Energy Transition
Perhaps the most significant concern involves how re-regulation would affect Maryland’s clean energy goals. The state currently ranks 38th nationally for renewable energy consumption at about 8.9%, despite ambitious climate targets. Competitive markets have proven remarkably effective at driving down renewable energy costs through technological innovation and scale. Utility-scale solar, in particular, has seen dramatic cost reductions, now representing the lowest levelized cost of energy in many markets. If BGE controls both generation and distribution, the utility would face inherent conflicts between its legacy generation assets (potentially including fossil fuel plants) and new renewable investments. History shows that vertically integrated utilities often prioritize their existing asset base over potentially disruptive but cheaper renewable alternatives.
Competitive Market Solutions
Rather than returning to monopoly control, Maryland could address its energy challenges through targeted market enhancements. Strengthening interconnection rules would help renewable developers connect to the grid more efficiently. Accelerating permitting processes for competitive projects could achieve faster deployment than utility-led development. Implementing competitive bidding for new capacity ensures that ratepayers get the best possible prices for new generation. These market-based approaches align with how modern electricity markets have evolved to balance reliability, cost, and environmental goals. The success of these mechanisms in other competitive markets suggests Maryland could achieve its energy objectives without sacrificing the consumer protections that competition provides.
Regional and National Implications
Maryland’s decision will resonate beyond state borders, potentially influencing energy policy debates throughout the mid-Atlantic region. As Exelon operates utilities across multiple states, success in Maryland could encourage similar efforts elsewhere. The outcome will also test whether states can maintain competitive wholesale markets while addressing legitimate concerns about reliability and infrastructure investment. This comes at a critical moment when federal energy policy, through initiatives like the Inflation Reduction Act, is pushing substantial investment toward competitive renewable development. Maryland’s choice could either align with these national trends or create conflicting signals that complicate the energy transition across the Eastern interconnection.
The Consumer Protection Imperative
Ultimately, this debate centers on who bears risk in Maryland’s energy future. In competitive markets, developers and investors shoulder project risks, with consumers benefiting from cost discipline. Under re-regulation, consumers become the ultimate backstop for utility investment decisions. The recent arguments advanced by BGE leadership and the position articulated by Exelon’s CEO emphasize predictability, but history suggests that utility-led generation projects frequently encounter delays and cost overruns that regulatory frameworks ultimately pass to consumers. As Maryland legislators consider these competing visions, the fundamental question remains whether monopoly control or competitive markets better serve consumer interests in an evolving energy landscape.
