Maryland Public Service Commission Concludes Multi-Year Rate Plan Lessons Learned Pilot, Launches Comprehensive Reform Process
October 1, 2026
Commission finds pilot goals were largely unmet and directs a two-phase review to be completed by mid-2027 that focuses on customer benefits, affordability, transparency, and accountability
BALTIMORE — The Maryland Public Service Commission today announced that it has concluded the state’s Multi-Year Rate Plan (“MRP”) Lessons Learned Pilot and that it has tasked electric utilities to perform a comprehensive process to evaluate and design a substantially reformed approach to forward-looking utility ratemaking. The Commission’s decision follows an extensive lessons-learned proceeding, which examined whether multi-year rate plans delivered their intended benefits for customers, utilities, regulators, and other stakeholders within the state.
Outlined in today’s order, the Commission found the following:
- The goals established for the pilot were largely unachieved. Although the framework shortened cost-recovery periods for utilities and offered some visibility into proposed capital and operations spending, the Commission did not find that those changes produced clear, measurable benefits for ratepayers. The record also showed that the pilot, as implemented, increased the complexity, time, and resources required for rate proceedings.
- The Commission further determined that the value of advance review was diminished when the utilities made significant changes to approved work plans.
- The pilot did not make customer rates more predictable or stable than traditional historic-test-year ratemaking, did not demonstrably advance Maryland’s energy policy goals, and did not produce greater utility innovation.
Accordingly, the Commission is sunsetting the pilot established by Order No. 89482. The decision does not adopt the existing MRP framework as Maryland’s standard ratemaking model. Instead, it establishes a structured review to determine whether a redesigned multi-year plan or another alternative form of regulation can satisfy Maryland law while protecting customers and supporting safe, reliable utility service.
“This MRP lessons learned pilot gave us a clear record of what worked, what did not, and what must change if forward-looking ratemaking is to deliver real value for Maryland customers,” said Commission Chair Kumar Barve. “The Commission looks forward to additional discussion to better inform any future decisions.”
Next Steps: A Two-Phase Review Centered on Ratepayer Outcomes
Phase 1: Test-year evaluation: The work group in Public Conference 83 (“PC-83”) has been directed by the Commission to immediately conduct the study required by the Utility Reducing Energy Load Inflation for Everyday Families (RELIEF) Act. The study will evaluate forecasted, historic, and hybrid test years and electric utilities must submit recommendations to the Commission by February 1, 2027, including any recommended legislative changes. The Commission’s report to the Maryland General Assembly is due by April 1, 2027.
Phase 2: A refined framework: By June 30, 2027, the work group also must submit an evaluation report and plan proposing a framework consistent with Maryland’s statutory requirements. The report must identify areas of agreement and disagreement and address measurable customer benefits, permissible reconciliation or cost-sharing mechanisms, exogenous costs, prudency review, treatment of bill stabilization adjustments, the effect of reduced utility risk on authorized returns, Commission flexibility, transition issues, filing transparency, work-plan variances, and cost controls.
Background
The Commission created the MRP Pilot in February 2020 to test whether multi-year rate plans could reduce regulatory lag, improve transparency, spread rate changes over multiple years, support state policy goals, reduce administrative burdens, improve rate predictability, encourage innovation, and distribute risk more equitably. The Baltimore Gas and Electric Company served as the pilot utility, and the Commission later approved multi-year plans for Potomac Electric Power Company and Delmarva Power & Light Company.
The full Commission order in Case No. 9618 can be reviewed on the Maryland Public Service Commission’s website.
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Media contact: Tony Ruffin, Communications Director | tony.ruffin@maryland.gov
About the Public Service Commission:
The Maryland Public Service Commission regulates electric and gas utilities and suppliers, telephone companies (land lines), private water and sewer companies, passenger motor vehicle carriers for hire, taxicab companies in some jurisdictions and bay pilot rates. The Commission implements the State’s energy policy and also regulates the siting of energy generating facilities and high-voltage transmission lines.
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