MD PSC orders investigation into ex-BGE employees’ fraud accusations

The Maryland Public Service Commission on Monday ordered an investigation into fraud allegations against Baltimore Gas and Electric made by 14 former employees, but rejected their request to join the litigation over proposed rate increases.

The former employees, who are also suing the utility in Baltimore City Circuit Court over alleged racial discrimination, in December filed a motion to intervene with the PSC, which regulates utilities.

They accused a BGE staffer of falsifying documents and of claiming to have conducted thousands of gas infrastructure inspections when he actually conducted fewer than 100 over a four-year period. They say he spent time at a Kent County marina when he claimed to be working and that his boss failed to check his location.

BGE is attempting to recover $153 million from ratepayers for 2023. It is required to show that its cost increases were “prudently incurred” and that it exercised “good management judgment” for the state to approve increases.

Without ruling on the merits of the former employees’ claim, the PSC denied the motion because it came four and a half years after the deadline to intervene. It rejected their argument that there had been a “reset” in the schedule that allowed them to intervene with information they collected after the deadline and said the petitioners’ interests were adequately represented by the Office of the People’s Counsel, which represents ratepayers.

“There is no dispute that Petitioners failed to timely file a petition to intervene in this proceeding,” states the order, signed by all four of the commission’s members, Frederick Hoover Jr., Michael Richard, Kumar Barve and Bonnie Suchman.

“Although Petitioners correctly state that the Commission has granted petitions to intervene liberally in the past, the Commission finds that it would be inappropriate to grant Petitioners’ request given the substantial amount of time between the deadline and the filing of the Petition.”

The commission also said it was “troubled” by the claims, and ordered its internal Engineering Division to investigate and report its findings within 60 days. Depending on the findings, the PSC “may open additional proceedings to further investigate and remediate the matter.”

“Those allegations, if true, could have significant safety and cost implications,” the order states.

David Baña, the lawyer for the former employees, said he would appeal the PSC denial to Baltimore City Circuit Court and would seek to pause the rate-increase litigation during the appeal process.

“The Commission’s position defies logic,” Baña said in a statement. “They’re essentially saying my clients should have known about fraud three years before it occurred. That’s not just unreasonable — it’s impossible.”

In response to the petition, BGE General Counsel David Ralph called the allegations “outrageous” and “spurious,” and wrote that it was an “obvious attempt to draw attention” that was “filled with inaccuracies and misrepresentations.”

BGE said in a statement that the alleged fraud is not related to the costs it’s trying to recover in the 2023 reconciliation, and that it would work with the Engineering Division.

“The allegations raised by members of a plaintiffs’ group who are in litigation with BGE are clearly not relevant to the limited issue of the 2023 reconciliation and we applaud the Public Service Commission for recognizing that those allegations are better addressed in the judicial courts where BGE is vigorously defending against the plaintiffs’ claims,” spokesman Nick Alexopolous wrote in an email.

Meanwhile, elected officials — from the City Council to Maryland Attorney General Anthony Brown — are attempting to rein in costs with a bill in the General Assembly known as the Ratepayer Protection Act.