Maryland Public Service Commission: Utility Regulation and Consumer Protections

The Maryland Public Service Commission (PSC) is the state agency responsible for regulating public utilities, including electric, gas, telephone, water, and transportation companies operating within Maryland. Its authority spans rate-setting, service quality standards, licensing of competitive suppliers, and enforcement of consumer protections. The PSC operates under Maryland Code, Public Utilities Article, which defines the scope of its jurisdiction and the procedural requirements governing its decisions.

Definition and scope

The PSC is a quasi-judicial regulatory body created by the Maryland General Assembly. It holds authority over investor-owned utilities and, in limited circumstances, certain municipally-owned systems and cooperative entities. The Commission's mandate covers approximately 6 functional sectors: electric distribution, natural gas distribution, local exchange telecommunications, water and sewage, motor carrier transportation, and electric and gas supply licensing for retail competitive markets.

Scope boundaries and limitations: The PSC's jurisdiction applies to entities providing regulated utility services within Maryland's geographic borders. It does not regulate federally jurisdictional interstate transmission facilities, which fall under the Federal Energy Regulatory Commission (FERC). Wholesale electricity markets in Maryland are structured under PJM Interconnection, a regional transmission organization whose rates and tariffs are subject to FERC oversight, not PSC authority. The PSC also does not regulate Maryland's municipal water systems where those systems are governed by county or municipal charter rather than state franchise. Matters involving telecommunications at the federal level are governed by the Federal Communications Commission (FCC), not the PSC.

The Commission issues two primary categories of authorization: Certificates of Public Convenience and Necessity (CPCNs), required before a utility can construct or operate facilities, and Electricity/Gas Supplier Licenses, required for competitive retail suppliers entering Maryland's deregulated supply markets. As of the passage of the Electric Customer Choice and Competition Act, Maryland opened retail electricity competition, placing supplier licensing squarely within PSC jurisdiction.

For a broader view of Maryland's regulatory agency landscape, the Maryland State Agencies and Departments reference provides structural context across the full executive branch.

How it works

The PSC is composed of 5 commissioners appointed by the Governor and confirmed by the Maryland Senate, each serving 5-year terms (Maryland Code, Public Utilities Article §2-101). The Chair designates administrative divisions responsible for engineering review, economics and finance analysis, consumer affairs, and legal proceedings.

Rate case process — structured breakdown:

  1. Filing: A utility files a rate case application with the PSC, including proposed tariff schedules, financial data, and cost-of-service studies.
  2. Staff review: PSC technical staff and the Office of People's Counsel (OPC) — Maryland's independent ratepayer advocate — conduct parallel reviews and may file responsive testimony.
  3. Discovery: Intervening parties, including large industrial customers and advocacy organizations, may conduct formal discovery.
  4. Evidentiary hearings: Administrative Law Judges preside over hearings at which witnesses testify under oath and are subject to cross-examination.
  5. Proposed order: The presiding officer issues a proposed order with findings of fact and conclusions of law.
  6. Commission review: The full Commission reviews the proposed order, may hold additional argument, and issues a final order.
  7. Reconsideration and appeal: Parties may petition for reconsideration before the Commission; final orders are subject to judicial review in the Circuit Court for Baltimore City.

The Commission applies the "just and reasonable" standard to rate determinations, a standard codified in the Public Utilities Article and mirrored in federal regulatory precedent. Rate cases for major Maryland utilities such as Baltimore Gas and Electric Company (BGE), Pepco, and Washington Gas routinely involve proceedings exceeding 12 months.

Common scenarios

Residential billing complaints: Customers disputing utility charges, disconnection notices, or deposit requirements file informal complaints with the PSC's Consumer Affairs Division. If unresolved informally, customers may escalate to a formal complaint proceeding adjudicated under administrative procedures.

Competitive supplier disputes: Under Maryland's deregulated supply framework, residential and commercial customers may contract with licensed competitive electricity or gas suppliers. The PSC licenses these suppliers, monitors marketing practices, and investigates complaints involving slamming (unauthorized switching of suppliers) or deceptive enrollment practices. Suppliers found in violation face license suspension or revocation.

Certificate of Public Convenience and Necessity proceedings: Utilities proposing new transmission lines, pipelines, or generation facilities must obtain CPCNs. These proceedings involve environmental review, public comment, and often coordination with the Maryland Department of Environment, which holds separate permitting authority.

Reliability and service quality enforcement: The PSC sets quantitative reliability standards for electric distribution utilities, typically measured by System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) metrics. Utilities failing to meet benchmarks are subject to investigation and potential penalties.

Decision boundaries

The PSC distinguishes between matters within its exclusive jurisdiction and those that are concurrent, preempted, or delegated elsewhere.

Decision type PSC authority Limits
Distribution rate setting Exclusive for investor-owned utilities FERC holds transmission rate authority
Retail supplier licensing Full licensing and enforcement authority Does not extend to wholesale market participants
Service territory disputes PSC adjudicates overlapping franchise claims Cannot alter municipally-chartered boundaries
Telecommunications Limited to intrastate local exchange FCC governs interstate and broadband services
Environmental siting review Participates in CPCN proceedings MDE holds independent permitting authority

The Office of People's Counsel, established under Maryland Code, Public Utilities Article §2-301, operates independently from the PSC and represents residential and small commercial ratepayers in all major Commission proceedings. This structural separation ensures adversarial review of utility rate requests without relying solely on PSC staff advocacy.

Decisions of the PSC carry the force of administrative law and are enforced through the Commission's own penalty authority and, where necessary, through referral to the Maryland Attorney General. The Maryland Attorney General holds concurrent enforcement authority in consumer protection matters that overlap with utility marketing and deceptive trade practices.

For reference on how Maryland structures broader public sector authority across departments and offices, the Maryland Government Authority provides jurisdictional orientation across the state's regulatory landscape.

References

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