MD regulators not enforcing gas pipeline rules from 2025, consumer advocate says

Maryland’s utility regulators are failing to enforce a 2025 state law that set new restrictions on gas pipeline replacement, according to a court appeal filed last week by the Maryland Office of People’s Counsel.

The law came amid concerns from consumer advocacy groups that gas utilities have been overspending on pipeline replacements because they recoup the cost from customers — along with a guaranteed profit. The change required that utility companies prove that pipeline replacements actually benefit customers and promote safety, and show that they considered alternatives to pipeline replacement.

But more than one year after the law took effect, the Maryland Public Service Commission is still working to promulgate new regulations for gas companies — and it has allowed Washington Gas to move forward with planned projects in the meantime.

It’s a “business-as-usual approach,” said Maryland People’s Counsel David Lapp, whose office is tasked with representing ratepayers in utility rate proceedings.

“The General Assembly took an important step to curb gas infrastructure replacement work that is driving up utility rates and contributing to an energy affordability crisis,” Lapp said in a statement issued Wednesday. “But so far the reforms have had no meaningful impact.”

That’s why the office took the relatively uncommon step of challenging the commission’s decision in Baltimore City Circuit Court, Lapp said.

The Public Service Commission began its rulemaking process in February, after advocates, including Lapp’s office, raised concern that Washington Gas failed to provide sufficient proof it had considered alternatives to pipeline replacement for its 2026 project list, or completed other tasks in accordance with the 2025 law, called the Next Generation Energy Act. The draft rules are expected on or before July 31.

In a statement, Washington Gas Senior Vice President of Regulatory Affairs Rachelle Whitacre defended the company’s gas replacement plan.

“At Washington Gas, safety and customer affordability guide everything we do, which is why we work closely with the Maryland Public Service Commission on our federally mandated infrastructure safety program,” Whitacre’s statement said. “The investments in our system help to ensure that our customers benefit from a safe and (99.8%) reliable system.”

In previous filings with the commission, Washington Gas has argued that its five-year plan for projects was already approved by the commission before the law passed, and the commission does not have the authority to overturn previously approved work. Even if it did, the company contended that its 2026 project list complies with the new law.

The commission “correctly” decided to convene a rule-making process in order to sort through “undefined and ambiguous” terminology about pipeline replacements in the 2025 law, Washington Gas said in an April filing.

A PSC spokesperson declined to comment on the appeal Wednesday, other than to say the commission was reviewing the filing.

But in an interview before the appeal was announced, PSC Chairman Kumar Barve, who was a longtime Democratic legislator in Annapolis, said commissioners believed in convening the rulemaking process to ensure that stakeholders, including the utility companies and consumer advocates, get their say.

“It’s very long and drawn-out because we want to take everybody’s point of view into account, and we can’t make everybody happy. But we don’t want to screw somebody inadvertently either,” Barve said.

It doesn’t help, Barve added, that the commission is facing a heavy volume of work, including from statutory changes made in the last two legislative sessions.

“We are overworked, and so we’ve got people doing triple duty, and I feel very grateful to the people in my agency for how hard they work and how much they work. I’m very much in awe of these people,” Barve said

But Lapp said he believes the commission should require gas companies to comply immediately, rather than waiting to develop formal regulations.

“This idea that they need regulations to comply with a statute is entirely a false premise,” Lapp said in an interview. “This idea is another delay tactic.

“What we’re seeing in this case is a subversion of legislative intent — no question about it,” Lapp added.

Whitacre contends that the rulemaking “provides an important opportunity for utilities, consumer advocates, and other stakeholders to offer input and helps create clear rules for implementation.”

Del. Elizabeth Embry (D-Baltimore City), who sponsored the measure in 2025, called it “puzzling” that the PSC decided to begin the rulemaking process so long after the law took effect.

“The law took effect on June 1 [2025], and it’s not contingent on rulemaking or any other event,” Embry said in an interview before Wednesday’s news release announcing the court appeal. “It’s effective as of that date — and arguably should impact the Washington Gas infrastructure replacement plan.”

Over the last two legislative sessions in Annapolis, lawmakers have passed energy legislation aiming to lower customers’ soaring bills. But a few measures have required some extra follow-through.

The Office of People’s Counsel and the Public Service Commission joined to petition federal energy regulators earlier this month to drop a surcharge costing Marylanders about $20 million per year on their electric bills, citing provisions in the legislature’s 2026 energy package, called the Utility RELIEF Act.

Amid last year’s energy debates, some policymakers, including Embry and Del. Dylan Behler (D-Anne Arundel), pushed for more significant changes to the state’s gas pipeline replacement rules.

They — along with Lapp and consumer and environmental advocacy groups — backed a bill that would repeal a 2013 law known as STRIDE, which lets utilities get approval from regulators in advance of completing infrastructure replacements. Previously, utilities completed the work and then had to ask permission to recover those costs from customers.

Consumer advocates fear that the 2013 rule change, passed amid concerns about gas explosions, is resulting in more repair work than necessary — and more costs to customers. The gas utilities contend that the rule change is helping them fund desperately needed repairs and replacements for aging pipes, and keep the system safe.

According to data from the Office of People’s Counsel, Maryland’s gas utilities had spent more than $2.1 billion on new gas infrastructure under STRIDE as of February 2025. By 2043, the utilities are projected to spend another $7.2 billion. But Maryland consumers will have paid $11.3 billion.

Even if the utilities complete their STRIDE work in 2043, customers will still be paying for the work for decades after it is finished, possibly until the end of the century, the office determined in its 2025 report. If more customers flee the gas system and convert their homes to electric, an increasingly small number of gas customers could be left footing the bill, resulting in very high bills for those that remain, Lapp has said.

Just a few years after STRIDE took effect, Maryland customers began paying more on their bills for gas delivery than for the actual gas itself. That’s partially because the cost of gas decreased. But bills stayed fairly stable because infrastructure costs went up.

“Instead of customers saving money from the decrease in commodity costs, gas companies have increased base delivery rates and filled the gap,” reads the People’s Counsel’s February 2025 report.

During a recent public meeting convened by the PSC, gas companies argued that they need more clarity on how to comply with the 2025 law change.

“We acknowledge the new requirements under the NGEA, but we also have to make sure that whatever these regulations end up being, that they’re regulations that we, as the gas company, as the operator, can actually implement,” said Daniel Hurson, an associate general counsel for Baltimore Gas & Electric . “It’s not going to help anybody to have a set of regulations that can’t be met.”

“[If] we can’t replace a foot of pipe until we do an analysis of every feasible pipeline alternative for every foot — that’s probably going to be a problem for us,” Hurson said.

Christine Condon covers state politics with a focus on environmental and energy issues for Maryland Matters.