Maryland Utility-Owned Generation: What Ratepayers Risk
Maryland utility-owned generation is back on the table in Annapolis, and you can feel the stakes in every conversation about reliability, clean energy, and what shows up on your customers’ bills. From our seat at the Alliance for Competitive Power (ACP), you are not just debating a new set of power plants. You are deciding whether Maryland keeps competition as the everyday pressure test on cost and performance, or whether more of that risk quietly slides over to ratepayers.
You already know the backdrop: big retirements, rising peak demand, and a grid that has to modernize while customers are watching every dollar. Still, the question we keep coming back to with stakeholders like you is simple: when a project runs late, runs hot on cost, or does not deliver what was promised, who pays first?
Maryland utility-owned generation: why this idea keeps resurfacing
Maryland separated power generation from the utility wires business decades ago. The point was practical: keep transmission and distribution as regulated monopolies, and let competitive companies build and run generation. In theory, competition keeps bids sharp and punishes sloppy execution.
So why are you hearing so much about bringing utility ownership back? Because price swings and recent bill pressure make any “more control” option sound appealing, especially when you are getting calls from customers, local officials, or large employers asking what the plan is.
That political momentum is part of why Exelon, parent company of BGE, Pepco, and Delmarva Power, has openly explored re-entering generation ownership. You can see that shift described in reporting from Maryland Matters, which lays out how this would reverse the direction Maryland took during restructuring.
From our perspective, this is not a small policy tune-up. It is a structural change that affects who takes risk, who gets rewarded, and how much real choice remains in the system.
Maryland utility-owned generation: the bill impact you should not ignore
When people say “regulated generation,” they mean utilities would be allowed to build and own power plants, put those costs into rate base, and recover them through rates approved by the Maryland Public Service Commission. The utility earns an authorized return, and customers pay the revenue requirement over time.
Here is the difference in plain terms:
In competitive generation, private developers and investors carry most construction and performance risk. If they miss, they eat the loss.
In utility-owned regulated generation, the cost-recovery path is smoother. That can make financing easier, but it can also make it easier for overruns to land on customer bills.
If you want a quick refresher you can share internally, our ACP explainer walks through how electricity rates are set in regulated vs. competitive systems and why the incentive structure matters.
Regulated generation Maryland: what HB 1561 revealed about the monopoly question
The 2026 legislative session put the debate into bright light. House Bill 1561 (styled as the Affordable Energy Act) raised a big design question: if utilities can finance and build generation with ratepayer backing, do you gradually rebuild a state-sanctioned generation monopoly on top of the existing wires monopoly?
You can review the core contours of that debate in coverage from Maryland Matters, which describes how the proposal could have expanded utility control over generation investment decisions.
When you are evaluating any “regulated generation Maryland” proposal, we recommend you pressure-test it with three questions that are easy to explain to non-specialists and hard for bad policy to evade:
Is competition still the default? Do you have a real, technology-neutral solicitation before utility ownership is even considered?
Where does the risk sit? Are overruns capped, and do shareholders absorb meaningful pain before customers do?
Is it truly least-cost? Can demand response, storage, transmission upgrades, and competitively built generation compete on a level field?
Maryland electric ratepayers: why cost pressure is driving the conversation
You do not need a spreadsheet to know customers are stretched. Recent rate increases have been noticeable, and that is exactly why proposals that promise “stability” catch fire. One example: state officials flagged estimated increases for BGE customers heading into summer 2025, as reported by Maryland Matters.
At the same time, reliability planning is getting harder. Plants are retiring, load is changing shape, and transmission constraints are not waiting politely for policy to catch up. You can support cleaner resources and still insist on smart deal terms. Financing and ownership decide whether the grid transition is disciplined, or whether it becomes a long series of “please approve this additional cost” filings.
Generation Framework Risk Profiles
Competitive generation buildout
Who carries more project risk?: Developers and investors
What it can mean for customers: Stronger cost discipline and performance incentives, but market prices can move around
Utility-owned regulated generation
Who carries more project risk?: Ratepayers through regulated cost recovery
What it can mean for customers: Potentially smoother planning, but higher exposure to overruns and unnecessary capital spend
Hybrid model with guardrails
Who carries more project risk?: Shared, depending on the rules
What it can mean for customers: Can support reliability needs while keeping competitive benchmarks and customer protections
What happened in 2026 and what you should take from it
In 2026, lawmakers ultimately stepped back from the most aggressive monopoly-style approach and kept Maryland’s competitive market structure intact for now. Commentary captured that outcome as a transitional win for competition and customers in RealClearEnergy.
At the same time, you saw a separate push to address near-term affordability. The Utility Rate Relief Act was passed by the legislature, providing a targeted mechanism designed to lower residential electric and gas utility bills by an estimated $150 per year.
Put those together and the signal is pretty clear: Maryland wants reliability and bill relief, but policymakers remain wary of rebuilding vertically integrated monopolies without tough, enforceable consumer protections.
How you can evaluate “solutions” without getting boxed into a false choice
In meetings and hearings, you will often hear the debate framed like this: either you accept unreliable markets, or you hand utilities the keys to generation again. You do not have to pick between those extremes. You can strengthen resource adequacy and planning while keeping competitive pressure on cost.
From ACP’s standpoint, these guardrails are where you should focus your time, your testimony, and your questions:
Competitive procurement first: Require open, transparent, technology-neutral solicitations before utility ownership is considered.
Strong anti-self-dealing rules: Prevent utilities from using planning, interconnection, or procurement to favor their own assets or affiliates.
Hard cost caps and performance requirements: If a project slips or underperforms, shareholders absorb the hit before customers do.
Independent review: Load forecasts, retirement assumptions, and least-cost modeling should be stress-tested, not waved through.
Customer choice stays real: Do not let monopoly buildouts crowd out competitive suppliers and retail choice.
If you want additional context on how monopoly structures tend to expand once reintroduced, you can reference our ACP post on why states push utility monopolies and why it hurts you.
What to watch next in the Maryland utility-owned generation debate
This issue is not going to disappear. Maryland still needs new resources as older plants retire and demand grows. You should expect proposals to come back in a “narrower” form, maybe as pilots, maybe as a targeted reliability tool. The packaging may change, but the underlying tradeoff often stays the same.
As you track the next round, keep an eye on:
Scope creep: Small programs that quietly set precedent for broader utility ownership later.
Financing timing: Plans that start charging customers before the asset is proven and delivering value.
Procurement design: Solicitations that look open on paper but are structured to favor utility build.
Reliability claims you can measure: Clear metrics, clear timelines, and consequences if targets are missed.
For longer-run evidence you can use in your own briefings, ACP summarizes research comparing outcomes in restructured markets and vertically integrated systems on our FTI Study Results page.
FAQ: Maryland utility-owned generation and ratepayer risk
Is Maryland utility-owned generation always bad for customers?
No. The outcome depends on the rules. If competitive procurement remains the default and shareholders carry meaningful risk for overruns and underperformance, some limited approaches can be structured to protect customers.
What is the biggest risk to Maryland electric ratepayers under regulated generation?
The biggest risk is one-way risk transfer: costs become easier to recover through rates, including overruns, while customers have limited ability to opt out. If the asset is not least-cost, customers can pay more than they would under competitive procurement.
Did the 2026 session settle the issue?
No. The most aggressive monopoly-style language was rejected, but the push to expand utility ownership is likely to return in future sessions, especially if bills remain high or regional reliability concerns intensify.
Can Maryland improve reliability without expanding utility ownership of generation?
Yes. You can improve reliability with better regional planning, clearer resource adequacy signals, targeted transmission upgrades, demand response, storage, and competitive procurements that include enforceable performance requirements.
Where can you stay connected with ACP as this evolves?
You can follow our updates at Alliance for Competitive Power and reach our team through the contact page.
Conclusion: keep competition working, keep customers protected
You are balancing real needs: reliability, affordability, and a credible path to cleaner power. But the structure you choose determines whether Maryland’s next buildout rewards efficiency and innovation, or whether it locks in guaranteed cost recovery with weaker discipline.
Our message at ACP is straightforward. Do not trade today’s frustration for a system that shifts more project risk onto customers while protecting utility returns. If Maryland considers any form of regulated generation, it should be tightly limited, competitively benchmarked, and built so shareholders, not Maryland electric ratepayers, are first in line to absorb mistakes.
