Maryland's Large-Load Tariffs Are Filed: What Commercial and Industrial Customers Should Watch Before the PSC Rules
Maryland's large-load tariffs are no longer a future filing. They are in front of the Public Service Commission now, and the cost-allocation decisions that follow will reach well beyond data centers.
Where Maryland's large-load tariffs stand now
In late September 2026, BGE, Pepco, and Delmarva Power filed their large-load tariff with the Maryland PSC. The Commission has scheduled a hearing for October 23, with evidentiary hearings December 8 to 11, 2026.
The tariff defines how customers above the new large-load threshold pay for the transmission, distribution, and reliability costs their load creates. Every dollar that is not assigned directly to those customers is recovered somewhere else, and commercial and industrial rate classes are among the places it can land.
Maryland manufacturers, chemical facilities, logistics operations, and other large commercial customers should model their exposure now, while the tariff can still change. A utility bill audit is the right starting point. You cannot manage a new cost allocation if you do not understand how your current bills are constructed.
What the law changed
Maryland's Utility RELIEF Act (HB 1532), enacted in 2026, rewrote the rules for large loads. It lowered the large-load threshold from 100 MW to 25 MW and the minimum load factor from 80% to 60%. It also created a large-load registry with the PSC.
The Act requires utilities to file large-load rate schedules with the PSC. BGE, Pepco, and Delmarva Power filed theirs on September 29, 2026. The utilities have said the proposal may change based on state and federal developments and PSC guidance.
The framework addresses several cost risks:
- Transmission and distribution buildout required to serve large loads.
- Minimum billing demand requirements.
- Long-term contractual commitments.
- Collateral or guarantee requirements.
- Exit fees and project cancellation costs.
- Subsidies from other customers to large-load customers.
The policy objective is clear: customers creating substantial new grid requirements should carry an appropriate share of the costs. Whether that happens depends on the final tariff language the PSC approves.
Cost allocation is arithmetic
Every cost the grid incurs to serve new large loads must be recovered. In practice, there are four places it can go:
- Assigned directly to the load creating the cost.
- Recovered from other customer classes.
- Recovered through a broader system charge or rider.
- Absorbed by the utility or project developer.
The first option is the cleanest. The second and third create risk for commercial and industrial customers, including those well below the 25 MW threshold.
Questions that will decide where your facility lands
- How will "large load" be applied at each utility: by facility, account, service territory, or corporate portfolio?
- How will the 60% load factor test be measured?
- Which transmission, distribution, capacity, and ancillary costs will be assigned directly to large loads?
- Will existing customers be grandfathered or receive transition treatment?
- How will the tariff affect customers below the threshold who share the same constrained system?
These details determine whether the new tariff reduces cross-subsidization or moves more cost into commercial and industrial rate classes.
What to model before the December hearings
Maryland industrial customers should not wait for a final order to discover that their distribution class, transmission rider, or capacity-related charges have changed. Model the possible scenarios while the record is still open.
That model should include:
- Current annual electricity cost by site.
- Current rate class and service voltage.
- Monthly billed demand and interval peak demand.
- Load factor by site, measured against the 60% test.
- Capacity-related charges.
- Transmission and distribution riders.
- Ancillary service charges.
- Demand ratchets and billing determinants.
- Contracted supply terms.
- Exposure to PJM capacity prices.
- Planned production or facility expansion.
A national electricity price does not answer these questions. Neither does a supplier quote by itself.
PJM capacity costs are already rewriting Maryland budgets
Maryland facilities operate inside PJM, where capacity prices have risen sharply and stayed high.
PJM's 2026/2027 auction cleared at $329.17 per MW-day, compared with $28.92 per MW-day for 2024/2025, roughly a 1,038% increase over two delivery years. The 2027/2028 auction cleared at the $333.44 cap.
The 2028/2029 Base Residual Auction cleared at the $325 per MW-day cap, the third consecutive auction at the price cap. It procured about 138,318 MW, yet total committed capacity remained 6,831 MW below PJM's reliability requirement.
| Delivery year | Cleared price ($/MW-day) | PJM simulated price without the cap ($/MW-day) |
|---|---|---|
| 2024/25 | $28.92 | No cap in place |
| 2025/26 | $269.92 | No cap in place |
| 2026/27 | $329.17 | $388.57 |
| 2027/28 | $333.44 | $529.80 |
| 2028/29 | $325.00 | $554.72 |
PJM's own simulation without the cap put the 2028/2029 clearing price at $554.72 per MW-day, 71% above what cleared. Maryland customers have already seen what higher zonal prices look like: in 2025/2026, the BGE zone cleared at $466.35 per MW-day, well above the RTO price.
The price cap and floor remain in place through the 2029/2030 auction, scheduled for December 2026. After that, whether a cap continues is undecided.
A fixed supply price does not always fix capacity
Capacity charges are generally non-bypassable and flow through to retail bills regardless of the electricity supplier. A fixed-rate supply contract hedges capacity only if the contract language specifically includes that protection. Many contracts do not.
The Reliability Backstop is accepted but suspended
PJM proposed a one-time Reliability Backstop Procurement to close the 6,831 MW shortfall, with commitments of up to 15 years. On September 29, 2026, FERC accepted the proposal but suspended it for five months, to an effective date of February 28, 2027, subject to refund. PJM postponed the procurement window it had planned to open September 30.
FERC's concerns included how costs would be allocated. PJM cannot assign retail costs directly to individual customers, so states will play a central role in deciding how backstop costs reach retail bills.
For Maryland finance and operations teams, the backstop may affect:
- Future capacity obligations.
- Retail supplier pricing.
- Utility standard offer service charges.
- Bilateral contract terms.
- Load-serving entity settlements.
- Large-load tariff design.
- The cost of adding new industrial demand.
A supplier may offer a competitive energy rate while leaving capacity, transmission, or ancillary charges exposed. That is why a supply quote cannot replace a utility bill audit.
Maryland and Virginia are moving in the same direction
Maryland is not the only state in the PJM corridor tightening large-load cost responsibility.
In Virginia, the State Corporation Commission approved Dominion Energy's new GS-5 large-load rate class, effective January 1, 2027, for customers demanding 25 MW or more. Certain GS-5 customers must pay minimum demand charges equal to:
- 85% of contracted transmission and distribution demand.
- 60% of contracted generation demand.
The structure is designed to prevent large customers from reserving substantial grid capacity and then shifting the cost of unused capacity to other customers.
Maryland and Virginia use different regulatory mechanisms, but the planning direction is parallel:
- Identify large loads earlier.
- Require stronger contractual commitments.
- Assign more infrastructure risk to the customer creating the demand.
- Reduce exposure to speculative load growth.
- Limit cross-subsidies between customer classes.
Multi-state operators in Maryland, Virginia, and the District of Columbia should treat these changes as one regional planning problem.
What a Maryland facility can actually do
A utility bill audit should come before procurement, tariff selection, or expansion planning.
Discovery Energy reviews the utility bill against the applicable tariff, contract, meter data, and regulatory requirements. The goal is not only to identify an obvious overcharge. It is to establish an accurate baseline for future decisions.
A utility bill audit should verify:
Rate classification
Confirm that each facility is billed under the correct industrial or commercial rate class. A misclassification can affect demand charges, distribution charges, eligibility for special programs, and the application of riders.
Capacity pass-throughs
Determine whether PJM capacity costs are passed through separately or included in a fixed supply price. Review the contract definition of "capacity," not just the advertised energy rate.
Transmission and ancillary riders
Check whether transmission, ancillary services, capacity performance, and other market-based charges are billed according to the contract and tariff.
Demand ratchets
Review whether a prior peak demand continues to affect future bills. A demand ratchet can create a persistent cost even after production declines.
Meter multipliers and billing determinants
Verify meter multipliers, interval data, billed kW, billed kWh, power factor adjustments, voltage discounts, and the calculation of each demand determinant.
Tariff and regulatory compliance
Compare the bill to the tariff as written. Utilities can apply complex rules incorrectly, and errors may continue for years because the invoice appears reasonable at a glance.
How audit fees work
Discovery Energy's utility bill audits are contingency-based, with no upfront audit fee. Under the agreed terms, Discovery Energy is paid when the client receives qualifying refunds, credits, or realized savings.
Five practical actions for Maryland energy teams
Model tariff scenarios before the December hearings
Calculate the effect of direct large-load charges, higher minimum demand requirements, and potential reallocation of unrecovered costs to commercial and industrial classes.
Audit every Maryland account before renegotiating supply
Correct rate classifications, billing errors, demand determinants, and riders before using historical spend as a procurement baseline.
Review contract exposure around PJM auction cycles
Do not assume a fixed energy price fixes the entire bill. Confirm whether capacity is hedged, passed through, or subject to future adjustments, especially with the December 2026 auction and the backstop still pending.
Use clear Buy/Wait/Hedge guidance
Buy when your risk tolerance requires budget certainty and the forward curve supports the decision. Wait when market conditions justify continued exposure. Hedge partially when a full fixed-price position would create excessive basis or volume risk. Discovery Energy's energy market reports provide direct Buy/Wait guidance for relevant forward markets.
Create one integrated view of every facility
Load bills, contracts, demand data, audit findings, and savings into a central platform. TaraBase gives facilities managers, finance teams, and executives a single view of costs, usage, contract expirations, and savings.
If your organization manages bills across multiple utilities, bill pay and data collection can consolidate the underlying data needed for ongoing utility billing error detection and benchmarking.
Sources and regulatory references
- Maryland General Assembly: Utility RELIEF Act, HB 1532 (Chapter 353)
- Utility Dive: Maryland passes Utility RELIEF Act, large-load threshold changes
- Daily Energy Insider: BGE, Delmarva Power, Pepco file large-load tariff in Maryland
- PJM 2028/2029 Base Residual Auction Report
- PJM 2025/2026 Base Residual Auction Report
- OPIS: PJM's 2028/2029 capacity auction clears at price cap for third time
- American Public Power Association: FERC accepts PJM Reliability Backstop Procurement, suspends it five months
- FERC eLibrary: Order Accepting Reliability Backstop Procurement, ER26-3380
- Loudoun Now: SCC approves Dominion GS-5 large-load rate class