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Bill

SB 2

Investor-Owned Electric, Gas, and Gas and Electric Companies - Cost Recovery - Limitations

2026 Regular Session Introduced by Katie Hester

SB 2 restricts Maryland's investor-owned utilities from automatically recovering operational costs through ratepayer bills, potentially moderating rate increases but risking reduced infrastructure investment.

Hearing 2/05 at 1:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · SB 2

Legislative bill overview

SB 2 would impose limitations on how investor-owned electric, gas, and combination electric-gas utility companies can recover costs from ratepayers. The bill restricts utilities' ability to pass certain expenses directly to customers through rate adjustments, requiring greater scrutiny of cost recovery mechanisms. This appears designed to prevent utilities from automatically or excessively shifting operational costs onto consumers.

Why is this important

Utility cost recovery rules directly affect what consumers pay on their monthly bills. Limiting cost recovery authority could moderate rate increases, but it may also impact utilities' financial stability and their ability to invest in grid modernization or renewable energy infrastructure. This creates a fundamental tension between consumer protection and utility investment capacity.

Potential points of contention

  • Consumer bill impact: Unclear whether restrictions lower bills long-term or simply defer costs, potentially increasing rates later
  • Infrastructure investment: Limits on cost recovery could discourage utilities from upgrading aging infrastructure or transitioning to clean energy if projected returns are uncertain
  • Regulatory balance: Determining which costs should vs. shouldn't be recoverable requires judgment calls that favor either utilities or ratepayers
  • Utility profitability: Stricter limitations may reduce profit margins, potentially affecting bond ratings or discouraging utility operations in Maryland

Compiled from official sources — confirm details with the bill’s official record.

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