Maryland Ends Gas Line Extension Subsidies Citing Inconsistency With Emissions Goals

The Maryland Public Service Commission on June 13 issued an order ending subsidies for new natural gas line extensions, a move that significantly alters how utilities recover infrastructure costs and aligns gas planning with the state’s decarbonization laws. The decision directs that new customers must pay the full cost of connecting to the gas system, rather than relying on ratepayer-funded subsidies that have historically offset or eliminated those charges.

The commission found the long-standing practice of allowing free or discounted connections, financed by existing customers, was inconsistent with Maryland’s energy policies, particularly the Climate Solutions Now Act of 2022, which calls for steep reductions in greenhouse gas emissions and increased electrification. The agency stressed that continuing such subsidies would incentivize greater gas use and risk creating stranded assets, with financial liabilities ultimately borne by ratepayers.

While natural gas may still play a transitional role, the commission stated that future investments must reflect a more accountable cost structure. The commission emphasized that customers retain the ability to choose their energy source, but such decisions must be made without financial distortions. The new direction, according to the commission, represents a neutral stance, which neither subsidizes or discourages new gas extensions.

The ruling also reflects traditional ratemaking principles, asserting that those who cause new infrastructure costs should be the ones to pay for them. The regulator pointed to the shrinking timeline for achieving net-zero emissions and warned that the viability of long-term gas investments is increasingly uncertain. Whether gas use rises or falls, the commission argued, requiring full-cost payment from new users sends appropriate price signals while protecting other customers from future cost recovery risks.

The agency directed its technical staff to draft implementing regulations. The decision is part of the broader “Future of Gas” proceeding, launched after a petition by the Office of People’s Counsel, which seeks to realign gas utility planning and capital spending with Maryland’s climate commitments.