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For the first time, low-income Marylanders will be able to receive a discounted electricity and gas rate from utilities — lowering their bills without the need for outside grants or refunds.
The program is set to take effect by Jan. 1, 2027, after the Maryland Public Service Commission issued an order Thursday laying out how all of the utility companies operating in the state should structure their programs.
“Although it does not take effect immediately, it is a significant step towards eventually easing the energy burden on Maryland families,” said Acting Commission Chair Kumar P. Barve. “The primary goal of this mechanism is to ensure that households already strained by the rising costs of everything, won’t have to pay more than they can afford for vital utility services.”
The program will automatically apply to most low-income customers who are signed up to receive assistance through the state’s Office of Home Energy Programs, or OHEP. They won’t need to fill out an additional application, according to the commission.
“This is groundbreaking,” said Laurel Peltier, chair of the Maryland Energy Advocates Coalition, who also volunteers to assist low-income ratepayers with their bills.
“There are people, literally, that are not buying certain things — not only are they getting behind on their utility bills, they’re having to take money from other areas,” Peltier said.
It’s not clear yet how exactly the utilities will recover the costs for the program, but it would likely be spread among the remaining ratepayers. Before the commission, utilities and other parties made competing arguments for what percentage should be recouped from residential customers versus commercial and industrial customers. But the commission didn’t make a final decision.
“The Commission needs additional information in the record pertaining to the companies’ proposed cost allocation methods and wants to hear from a variety of potentially affected parties to ensure they have adequate notice and opportunity to comment,” read the PSC order.
The program will have a tiered structure, so that households with the lowest incomes would receive the most assistance. The goal, according to the commission, is to bring households’ energy costs to 6% of their annual income.
At first the program will only cover ratepayers already signed up with the state, but the commission directed a work group to propose more ways to reach customers in need with the discounted rates.
“The Commission is concerned that this program will not reach customers in need who happen not to be enrolled with OHEP,” read the Commission’s order. “The Commission encourages the Work Group to include in its future work plan an effort to find solutions.”
The program was borne out of a 2021 law, sponsored by Sen. Malcolm Augustine (D-Prince George’s) and then-Del. Dereck Davis, the current state treasurer, which allowed for separate rate classes for low-income customers.
The final order from the PSC couldn’t come at a better time, Peltier said, with costs skyrocketing because of energy market disruptions caused by demand from data centers, as well as intense infrastructure spending by utilities.
“When this law was signed during the pandemic, nobody knew that five short years later … low-income families can’t pay their utility bills,” Peltier said.
