Why Maryland’s Power Bills Are Rising — and What We Can Do About It

In case you missed our recent Conservation Conversation, here are the key insights from energy experts on what’s driving up your electricity costs and how clean energy solutions could help.

If you’ve noticed your electricity bills creeping higher, you’re not alone. Maryland families are facing significant rate increases, particularly BGE customers who could see bills jump by around $21 per month (about $250 per year) starting in June 2025. But, contrary to what some may claim, clean energy isn’t the culprit, but is actually part of the solution.

During our recent Conservation Conversation, we heard from energy experts Claire Wayner from RMI’s Carbon-Free Electricity program and Greg Poulos from Consumer Advocates of the PJM States about what’s really driving these rate increases and what Marylanders can do about it.

What are the Factors?

As Claire explained, we’re experiencing a perfect storm of factors that are affecting electricity prices across our region. Your electricity bill has several components, and multiple pieces are driving costs up simultaneously:

  • Energy Prices: The day-to-day costs of electricity generation are rising due to high natural gas prices driven by inflation and international supply disruptions.

  • Capacity Charges: We pay extra to ensure electricity is “on call” during peak demand periods (like the extreme heat we’re experiencing). These prices are determined by supply and demand — and right now we’re seeing more demand (from data centers and load growth) but less supply due to power plant retirements and delays in connecting new clean energy projects to the grid.

  • Transmission Costs: Investment in high-voltage power lines has increased significantly, but without sufficient oversight at state, regional, and federal levels.

  • Distribution: The local poles and wires that deliver electricity to your home. Maryland’s use of multi-year rate plans has allowed utilities to increase these distribution costs with less regulatory oversight than traditional annual rate reviews.

 

The Clean Energy Bottleneck

Here’s the irony: we have hundreds of clean energy projects waiting in PJM’s interconnection queue to connect to the grid, but they’re facing delays. As Claire pointed out, PJM has been “used to the bigger resources for decades” and has struggled to process the many smaller renewable energy applications efficiently.

Meanwhile, during the recent extreme heat, Greg noted that only about 5% of electricity was coming from renewable resources, most of which is solar. “The renewable resources are not a big part of the markets or the resources relied on at this point,” he explained, “but hopefully they will be because we need all the above.”

The Capacity Market Challenge

A key driver of the rate increases is PJM’s capacity market, where prices jumped, as Greg noted, 421% for the delivery year starting June 2025. This increase stems from power plant retirements combined with new demand forecasts and PJM’s decisions to require higher reserve margins and more stringent requirements on energy generators.

As Greg explained, the problem is timing: “You really need three to five years if not more to develop” new resources, but PJM’s recent auctions have compressed timelines to just six months or a year, making it nearly impossible for new projects to respond to price signals.

Clean Energy: The Solution, Not the Problem

The data presented makes clear that renewable energy sources offer stable, cost-effective power once they are online. Unlike fossil fuel plants that face volatile fuel costs and startup expenses, wind and solar have no fuel costs after they are built.

The challenge isn’t too much clean energy, but getting clean energy projects through the approval process and connected to the grid fast enough to meet growing demand.

What You Can Do

In Your Home:

  • Take advantage of Maryland’s EmPOWER program for energy efficiency upgrades
  • Consider signing up for demand response programs with your utility company that alert you to high-demand periods when reducing usage saves the most money
  • Look into community solar for more stable pricing
  • Switch to a heat pump to shield yourself from natural gas price spikes, especially for winter heating
  • Utilize smart thermostats and load flexibility options when available

For Policy Change:

The Path Forward

Maryland’s energy challenges require both immediate action and long-term planning. We need to get more clean energy projects through the interconnection queue, build the transmission infrastructure to support them, and implement policies that encourage load flexibility and efficiency.

As Claire emphasized, “One of the key solutions to bringing prices down is going to be getting more projects through that interconnection queue, getting more supply onto the grid, and building more clean energy.”

The solutions exist, from offshore wind that can provide reliable power even on hot, still days to battery storage that can help balance supply and demand. What we need now is the political will to implement them at the scale and speed our communities deserve.

Want to learn more? Watch the full Conservation Conversation on our YouTube channel and sign up for our email list to stay updated on Maryland’s energy policy developments.