ANNAPOLIS — Natural gas companies would be able to seek a surcharge of up to $2 on monthly gas bills to help recover costs for replacing aging infrastructure, in a measure approved by state lawmakers Thursday.
The Senate voted 35-12 after spirited debate. The House of Delegates’ vote was 120-17. The measures are similar and any differences will need to be worked out for the legislation to go to Gov. Martin O’Malley.
Lawmakers who supported the bill said companies need the cash to help replace aging pipes and address safety concerns. Supporters also say the surcharge would have to be approved by the Public Service Commission, and the money wouldn’t be charged until work was done to improve infrastructure.
“It’s not a pre-payment plan,” said Sen. Thomas Middleton, D-Charles.
But opponents argued gas companies shouldn’t be asking for extra money at all to do a job they should have been doing all along.
Sen. E.J. Pipkin, R-Cecil, described it as “corporate welfare” for gas companies that have a monopoly and have not invested enough in infrastructure.
“Their business model underinvested,” Pipkin said. “Now they want the citizens of Maryland to bail them out.”
Sen. Richard Madaleno, D-Montgomery, also opposed the bill, saying the measure undermined long-standing regulatory rules.
“This is not about safety,” Madaleno said. “This is about ending the structure of regulation that we have had for a century in the state of Maryland about regulating gas companies. If we allow this to move forward, the companies will be able to come in and ask for a surcharge without having to go through a rate-setting case.”
Sen. George Edwards, R-Garrett, said he wasn’t pleased with the idea, but that ratepayers will end up paying one way or another. He also cited safety and environmental concerns.
“I’m not thrilled with $2, but I can tell you a lot of these pipes need repair,” Edwards said.
Lawmakers also are weighing a proposal by O’Malley to help develop offshore wind that would add about $1.50 each month to residential rates.
Maryland analysts estimated the surcharge on gas bills could raise $36 million a year, if the maximum charge is assessed on all existing gas customers, with about $24.6 million of that coming from residential customers. About $11.4 million would come from non-residential customers.