BGE wants a 10.4% return. The formula never asks what you got for it.

BGE has asked Maryland regulators for a 10.4% return. The number isn't the real problem — the formula behind it is, and Annapolis killed the study of a…

On July 6, BGE filed with the Maryland Public Service Commission for a $156 million electric rate increase. Inside that filing is a request for a return on equity of 10.4% — about $8 a month on the average customer's bill. The Commission expects to decide in January 2027. Whoever District 9A sends to Annapolis will be seated before that decision lands. For scale on the ask: BGE earned $527 million in 2024, up from $485 million in 2023 — GAAP net income figures from parent company Exelon's own year end results, not an advocacy estimate. Before Exelon acquired BGE in 2012, the company had never cleared $150 million in a year. Over that same stretch, according to the Maryland Office of People's Counsel, BGE's gas delivery rates more than tripled and its electric delivery rates nearly doubled. You will hear the 10.4% described as a guaranteed profit. It isn't, and I'm not going to tell you it is. Last December the Commission looked at $152 million BGE wanted to recover for capital spending that ran $323 million past what regulators had authorized, and allowed $77 million of it — roughly half. PSC Chair Frederick Hoover said their "overshooting of the budgets and over expenses over what they had projected would not be allowed to be passed on to customers." Regulators can say no, and sometimes do. The problem is narrower than a guarantee, and harder to fix. The formula rewards spending, not results Maryland sets utility rates on a cost plus basis. The company documents its capital base and its operating costs, and the Commission approves a return calculated on top of that base. Spend more, and the base grows. Grow the base, and the allowable return in dollars grows with it. What the formula does not ask is what the spending bought. There is no binding link between the return…