The Board of Estimates today ratified Mayor Brandon Scott’s plan to hike the conduit franchise fee for Baltimore Gas & Electric and other utilities from $2.20 to $4.05 per linear foot beginning January 1, 2027, with future increases tied to inflation.

The approval represents a near total reversal of Scott’s much-criticized 2023 agreement with BGE that took conduit management out of the hands of the city Department of Transportation and made the utility the de-facto operator of the network.

Under that agreement, BGE stopped paying a $28 million-a-year franchise fee to occupy the city-owned conduits that carry its electric lines in exchange for committing $120 million in capital improvements to the system.

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BGE uses about 75% of the 740-mile underground pipe network that holds electric power cables, telephone lines, fiber-optic data networks and city traffic signal cables.

The fee is charged directly to the companies that use the system, not to homeowners. But homeowners are impacted by the fees because they are ultimately passed along to customers through their monthly bills.

Comcast, Verizon and other conduit users who occupy space in the system will face the same rate hike, which is the first increase since 2019.

Increase in Customer Bills

Scott listened as City Council President Zeke Cohen denounced BGE as more interest in pleasing its stockholders than serving city residents.

A spate of fires inside the system, most noticeably under a portion of downtown Charles Street, demonstrated that BGE was not targeting capital funds where they were most needed, Cohen said.

A report released last December found that combustible gases caused the September 2024 fire at Charles and Pleasant streets that led to serious damage and power outages across the neighborhood.

According to the report, too many cables had been jammed into the conduits and too many electric transformers crowded inside manhole vaults, generating combustible gases that were building up for years.

Many parts of the municipal conduit system are 100 years old or older.

BGE countered that in the last three years it enlarged 20 manhole vaults to reduce congestion and installed 35 new manholes. In contrast, it said, DOT’s Conduit Division had improved just 10 manholes between 2016 and 2022 and performed no enlargements.

“These facts demonstrate that BGE’s current role is translating customer dollars into direct infrastructure work that improves reliability and public safety,” the company said in a letter to the spending board.

The utility suggested that customers in the city could face a $10 per month increase in their bills due to the new franchise fee.

DOT Director Veronica P. McBeth pledged to use the added revenues to maintain and improve the system.

She said the agency planned to build 10-12 manholes per year, implement a sensor monitoring system, increase repair work from $12 million to $15 million a year, and establish a fund for “unforeseen infrastructure failures.”