St. Mary’s Commissioners Push Back On $82.5M Washington Gas Rate Increase

LEONARDTOWN, Md. — St. Mary’s County Commissioners voted May 12 to formally oppose a proposed natural gas rate increase by Washington Gas Light Company, citing concerns over its financial impact on county operations and commercial customers.

The decision followed a detailed presentation by John B. Norris III, director of the Department of Public Works and Transportation, who outlined the scope of the request filed with the Maryland Public Service Commission under Case No. 9849.

“This is their application seeking authority from the Public Service Commission to raise rates and charges for natural gas service in Maryland,” Norris told commissioners.

At the center of the case is Washington Gas’ request for an $82.5 million annual revenue increase, which Norris described as “the headline of the ask.” According to the presentation, much of the increase is tied to infrastructure replacement through the STRIDE program, which funds upgrades to aging gas lines.

“Sixty-seven million of the request is for replacement of aging infrastructure,” Norris said. “The case they’re making for this is that it is crumbling infrastructure.”

County Facilities Face Significant Cost Increase

Norris emphasized that the proposed rate structure would disproportionately affect commercial customers, including multiple county-supported facilities.

“These four numbers really frame the case,” he said, noting the $82.5 million request, six affected county facilities, a projected 20% increase for commercial customers and a June 1 deadline for public comments.

Facilities impacted include the Sheriff’s Office District 3 and 4 stations, the St. Mary’s County Animal Shelter, the Patuxent River Naval Air Museum, the Lexington Park Library and the Great Mills Swimming Pool, which is transitioning to YMCA management.

“All six of the county-funded or direct-pay facilities are considered commercial,” Norris said.

If approved as proposed, the rate increase would cost the county an estimated $31,145.84 annually.

Disparity Between Residential And Commercial Rates

“The residential total bill is supposed to be impacted by about 5.3%,” Norris explained. “The commercial rate is capped at 20% … commercial’s going to have four times the rate increases residentially.”

That disparity is also highlighted in the county’s formal written comments to the Public Service Commission, which state that commercial customers could see roughly four times the percentage increase compared to residential users.

Commissioner Eric Colvin noted the broader economic implications of such increases.

“That’s going to impact people’s affordability for everything,” Colvin said during the discussion.

Concerns Over Return On Equity And Rate Structure

Norris also pointed to concerns over the company’s requested financial returns, including a 10.85% return on equity and an 8.07% overall rate of return.

“That is a really high margin,” Norris said.

The county’s formal letter argues these figures exceed those approved in a previous 2023 case, where regulators authorized a lower return on equity of 9.5% and a smaller revenue increase.

“We do not contest Washington Gas’ entitlement … to recover prudently incurred costs,” the commissioners wrote. “We do contest the magnitude of the requested increase.”

Call For Greater Oversight And Fair Allocation

In its filing, the county urged the Public Service Commission to more closely scrutinize how costs are distributed among customer classes and to ensure any increases are justified by evidence.

“The application as filed … does not, in the Board’s respectful view, meet that standard,” the letter states.

Commissioners also raised concerns about incorporating STRIDE-related costs into base rates without additional review.

“The consolidation of STRIDE program revenue into base rates warrants independent review,” the county wrote.

Next Steps In The Process

The board unanimously approved a motion authorizing Commissioner President Randy Guy to sign and submit the county’s opposition letter to the Public Service Commission before the June 1 deadline.

“We’re asking that you oppose it as filed,” Norris told commissioners, while acknowledging utilities are entitled to “just and reasonable compensation.”

A decision from the Public Service Commission is expected in late July, with any approved rate changes potentially taking effect July 27, 2026.

County officials said they will return with a full financial impact analysis once a final ruling is issued.

You can view more information about Washington Gas Light Company’s application from the document shared by the Department of Public Works and Transportation here.

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