The Maryland Public Service Commission (PSC) closed its multi-year rate plan pilot on October 1, concluding that the goals set for the experiment were “largely unachieved.” Instead of making the framework permanent, the Commission opened a two-phase review that could change how electric utilities forecast spending and recover it from customers.
For large commercial and industrial customers, the review will shape how far ahead they are asked to pay for utility investment. It arrives as utilities plan heavy spending on grid upgrades, reliability and new demand, including the data center and AI loads already straining corporate efficiency programs.
Maryland PSC Found Multi-Year Plans Did Not Make Rates More Stable
The Commission created the pilot in February 2020 as an alternative to traditional rate cases, which set rates on costs a utility has already incurred during a historic test year. Multi-year plans build in forecasts of capital and operating spending across several years. Baltimore Gas and Electric went first, followed by Potomac Electric Power Company and Delmarva Power & Light. Regulators hoped the approach would reduce regulatory lag, spread increases over time, make bills more predictable and encourage innovation.
According to the Commission, the plans did shorten utilities’ cost recovery periods, but that advantage did not produce clear, measurable benefits for ratepayers. Rates were no more predictable or stable than under historic-test-year ratemaking. Innovation did not improve, Maryland’s energy policy goals were not demonstrably advanced, and rate proceedings became more complex and resource-intensive. Advance review of spending also lost value when utilities made significant changes to approved work plans.
Annual reconciliations show how forecasts and actual costs drift apart. In May 2025, the Delaware Public Service Commission (PSC) verified this exact variance. They confirmed that Delmarva Power over-recovered about $800,000 of its 2024 revenue requirement.
The utility returned these over-collected funds through consecutive bill credits from July 2025 through June 2026. Because the total amount was distributed widely across the entire customer base, the credit yielded an average adjustment of 30 cents a month for standard residential accounts.
Utility Recommendations on Test Years Are Due February 1, 2027
In the first phase, a workgroup in Public Conference 83 will compare forecasted, historic and hybrid test years as required by Maryland’s 2026 Utility RELIEF Act. Utilities must submit recommendations, including any legislative changes, by February 1, 2027. The Commission reports to the General Assembly by April 1, 2027.
The second phase is broader. By June 30, 2027, the workgroup must propose a framework covering measurable customer benefits, reconciliation, unexpected outside costs, prudency review, bill stabilization, cost controls and the effect on utilities’ authorized return on equity. That last item could move utility earnings directly.
Nothing in the order changes commercial bills yet, and the Commission has not rejected forward-looking ratemaking outright. Energy managers already tracking how grid congestion turns into facility costs, or planning production schedules around grid availability, have reason to follow Public Conference 83. The test-year recommendations due in February will be the first sign of which direction Maryland takes.