A bill that would enable Maryland’s natural gas utilities to impose a monthly surcharge on customers of up to $2.00/month to pay for maintaining and replacing aging distribution lines appears likely to be approved by the legislature as soon as this week.
Amendments were successfully added to the Maryland Strategic Infrastructure Development and Enhancement Program (STRIDE) bill in the state House (HB 89) and Senate (SB 8), and it will likely become law by the end of the week, pending a final up or down vote in both chambers, said Tami Burt, policy analyst at the Maryland Department of Legislative Services.
The bill has been rejected by the legislature during the past two sessions, in part because it wasn’t backed by the Maryland Public Service Commission (PSC). Although the PSC hasn’t taken a position on this session’s bill, it has recommended minor changes to the bill’s language. “They’re not saying they support, but they do not oppose it,” Burt told NGI.
Under the legislation, the PSC still may approve or deny utility company maintenance projects, but, “if they approve a plan, they also have to approve a surcharge.” The PSC has rejected previous utility company requests for maintenance project surcharges.
Maryland utility companies earlier expressed support for the legislation. “With new technologies, an increasingly older pipeline system and increased federal industry standards for pipeline safety, we need to replace and reinforce our system more rapidly,” said Washington Gas Light Co. CEO Adrian Chapman (see Daily GPI, March 9, 2011). In an editorial last year posted on Gazette.net after similar legislation was defeated, Chapman said the bill would have allowed the company to replace about 105 miles of natural gas lines. He also cited a 2010 poll that found that almost two-thirds of Maryland residents supported the monthly surcharge.
“It appears our luck has run out in terms of convincing people what a bad idea this is,” said Maryland Office of People’s Counsel’s Theresa Czarski, who is deputy counsel. “All this does is shift everything to rate payers.” It is a “myth” that companies cannot afford to perform the projects with the rates already provided by the commission, she said.
AARP’s (formerly the American Association of Retired People) Maryland advocacy director Tammy Bresnahan testified against the legislation in January, calling it “a slap in the face to the Public Service Commission.” Last year an AARP report, “Increasing Use of Surcharges on Consumer Utility Bills” argued against utility surcharges of various types. According to the report, Georgia, Kentucky, Missouri, New Jersey and Ohio already have an aging infrastructure surcharge.
The U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Material Safety Administration supports alternative rate making methodology, such as that included in the STRIDE bill, which would provide for expedited replacement programs for aging pipelines. Of the 10 states that contain 80% of the nation’s aging cast iron natural gas mains, Maryland is the only one that does not have a replacement program, according to DOT.
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