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*hb1164*
HOUSE BILL 1164
C5 (6lr2976)
ENROLLED BILL
— Environment and Transportation/Education, Energy, and the Environment —
Introduced by Delegate Foley
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _________ ______ at ________________________ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Water Companies, Sewage Disposal Companies, and Water and Sewage Disposal 2
Companies – Rate Consolidation and Limited–Income Mechanisms 3
FOR the purpose of requiring the Public Service Commission to authorize certain rate 4
consolidations involving two or more water systems or sewage disposal systems; 5
requiring the Commission to allow water companies, sewage disposal companies, and 6
water and sewage disposal companies to aggregate certain revenues and costs for 7
certain purposes; authorizing the Commission to order gradual adjustments to 8
certain rates charged to a system over a certain time period; applying cert ain 9
provisions of law regarding limited–income mechanisms to water companies, sewage 10
disposal companies, and water and sewage disposal companies authorizing the 11
Public Service Commission to require a water company, sewage disposal company, or 12
water and sewage disposal company to adopt a certain limited –income mechanism; 13
requiring the Public Service Commission to study the feasibility of requiring certain 14
companies to adopt a limited –income mechanism to benefit limited –income 15
2 HOUSE BILL 1164
customers; and generally relatin g to water companies, sewage disposal companies, 1
and water and sewage disposal companies. 2
BY repealing and reenacting, without amendments, 3
Article – Public Utilities 4
Section 1–101(a), (z), (gg), and (uu) and 4–309(d) 5
Annotated Code of Maryland 6
(2025 Replacement Volume and 2025 Supplement) 7
BY repealing and reenacting, with amendments, 8
Article – Public Utilities 9
Section 4–307 and 4–309(a) and (e) 4–309 10
Annotated Code of Maryland 11
(2025 Replacement Volume and 2025 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – Public Utilities 15
1–101. 16
(a) In this division the following words have the meanings indicated. 17
(z) (1) “Public service company” means a common carrier co mpany, electric 18
company, gas company, sewage disposal company, telegraph company, telephone company, 19
water company, or any combination of public service companies. 20
(2) “Public service company” does not include: 21
(i) a campground that provides water, electric, gas, sewage, or 22
telephone service to campers incident to the campground’s primary business of operating 23
and maintaining the campground; or 24
(ii) a person that owns or operates equipment used for charging 25
electric vehicles, including a person that owns or operates: 26
1. an electric vehicle charging station; 27
2. electric vehicle supply equipment; or 28
3. an electric vehicle charging station service company or 29
provider. 30
(gg) “Sewage disposal company” means a privately owned public serv ice company 31
that owns or maintains facilities for the disposal of sewage. 32
HOUSE BILL 1164 3
(uu) “Water company” means a public service company that owns a water plant 1
and sells or distributes water for gain. 2
4–307. 3
(a) (1) In this section[, rate] THE FOLLOWING WORDS HAVE THE MEANINGS 4
INDICATED. 5
(2) “RATE consolidation” means the use of the same or similar rates or 6
tariff schedules of rates for customers of the same class for two or more water or sewage 7
disposal systems even if the systems are not physically interconnected. 8
(3) “RATES” INCLUDES FIXED RATES , VOLUMETRIC RATES , TOLLS, 9
CHARGES, AND SCHEDULES. 10
(4) “SYSTEM” MEANS AN INTERCONNEC TED SYSTEM OF FACILI TIES 11
USED BY A WATER COMPANY, SEWAGE DISPOSAL COMPANY, OR WATER AND SEWAGE 12
DISPOSAL COMPANY TO PROVIDE WATER OR SEWAGE DISPOSAL SERVICES. 13
[(b) After notice to customers and holding a public hearing and an evidentiary 14
hearing, the Commission may authorize a rate consolidation of two or more water or sewage 15
disposal systems if: 16
(1) the water or sewage disposal systems have common ownership; and 17
(2) the rate consolidation is in the public interest.] 18
(B) THIS SECTION APPLIES ONLY TO PUBLIC SERVI CE COMPANIES THAT 19
ARE WATER COMPANIES , SEWAGE DISPOSAL COMP ANIES, OR WATER AND SEWAGE 20
DISPOSAL COMPANIES. 21
(C) THE COMMISSION SHALL AUTH ORIZE A RATE CONSOLI DATION 22
PROPOSED BY A PUBLIC SERVICE COMPANY IN A BASE RATE PROCEEDING UNDER § 23
4–203 OF THIS TITLE INVOLV ING TWO OR MORE WATE R SYSTEMS OR SEWAGE 24
DISPOSAL SYSTEMS. 25
(D) WHEN AUTHORIZING RATE CONSOLIDATION UNDER SUBSECTION (C) OF 26
THIS SECTION, THE COMMISSION: 27
(1) SHALL ALLOW THE PUBL IC SERVICE COMPANY T O AGGREGATE 28
THE REVENUES AND COS TS OF THE WATER SYST EMS AND SEWAGE DISPO SAL 29
SYSTEMS FOR PURPOSES OF DETERMINING APPROPRIATE RATES FOR THE SYSTEMS’ 30
CUSTOMERS; AND 31
4 HOUSE BILL 1164
(2) MAY ORDER GRADUAL ADJUSTMENTS TO THE RATES CHARGED TO 1
A SYSTEM OVER A PERI OD NOT TO EXCEED 3 YEARS UNTIL FULL RAT E 2
CONSOLIDATION IS ACHIEVED. 3
(E) THE COMMISSION: 4
(1) MAY NOT DISAPPROVE A RATE CONSOLIDATION PROPOSAL UNDER 5
THIS SECTION; AND 6
(2) MAY CONDITION THE AUTHORIZATION OF A RATE CONSOLIDATION 7
PROPOSAL ONLY AS PROVIDED IN SUBSECTION (D)(2) OF THIS SECTION. 8
(F) AFTER THE COMMISSION HAS AUTHOR IZED A RATE CONSO LIDATION 9
PROPOSAL UNDER THIS SECTION, THE COMMISSION SHALL CONT INUE TO 10
AUTHORIZE AND MAINTAIN THE RATE CONSOLIDATION IN SUBSEQUENT ORDERS ON 11
APPLICATIONS OF THE PUBLIC SERVICE COMPANY UNDER § 4–203 OF THIS TITLE. 12
4–309. 13
(a) (1) In this section the following words have the meanings indicated. 14
(2) “Eligible limited–income customer” means a residential customer of a 15
utility company with annual income that: 16
(i) 1. is at or below 175% of the federal poverty level; or 17
2. for a customer at least 67 years of age, is at or below 200% 18
of the federal poverty level; or 19
(ii) meets a broader designation approved by the Commission. 20
(3) “Limited–income mechanism” or “mechanism” means a process 21
approved by the Commission under this section to benefit a n eligible limited –income 22
customer of a utility company. 23
(4) “Payment plan” means an agreement between an eligible 24
limited–income customer and a utility company to pay an arrearage balance over a specific 25
period of time to avoid disconnection of a utility service. 26
(5) (i) “Utility company” means: 27
1. an electric company[,]; 28
2. a gas and electric company[, or]; 29
HOUSE BILL 1164 5
3. a gas company; 1
4. A WATER COMPANY; 2
5. A WATER AND SEWAGE DISPOSAL COMPANY; OR 3
6. A SEWAGE DISPOSAL COMPANY. 4
(ii) “Utility company” does not include a small rural electric 5
cooperative. 6
(b) The General Assembly finds and declares that the societal benefits of a 7
well–constructed limited–income mechanism to benefit Maryland’s eligible limited–income 8
customers are in the public interest. 9
(c) (1) Subject to the approval of the Commission, a utility company shall 10
adopt a limited–income mechanism to benefit an eligible limited–income customer. 11
(2) Notwithstanding § 4–503(b) of this title, the mechani sm may take the 12
form of a program, tariff provision, credit, rate, rider, or other means to assist an eligible 13
limited–income customer to afford a utility service. 14
(3) A municipal electric utility may adopt a limited –income mechanism 15
subject to the appr oval of the Commission in the same manner as a utility company in 16
accordance with this section. 17
(4) THE COMMISSION MAY REQUIR E A WATER COMPANY , SEWAGE 18
DISPOSAL COMPANY , OR WATER AND SEWAGE DISPOSAL COMPANY TO ADOPT A 19
LIMITED–INCOME MECHANISM SUBJECT TO THE APPROVAL OF THE COMMISSION IN 20
THE SAME MANNER AS A UTILITY COMPANY IN ACCORDANCE WITH THIS SECTION. 21
(d) (1) A utility company that proposes a limited –income mechanism for 22
Commission approval under subsection (c) of this section shall include the proposal in: 23
(i) a separate application for approval of the mechanism; or 24
(ii) only with the prior approval of the Commission, an application 25
for a base rate proceeding, including an alternative rate proceeding, or any other proceeding 26
to alter the utility company’s base rates under the authority of the Commission. 27
(2) A proposal submitted under this section shall allocate the prudently 28
incurred costs of the limited–income mechanism across rate classes. 29
(3) The proposal shall include: 30
(i) a detailed description of the proposed mechanism; 31
6 HOUSE BILL 1164
(ii) the proposed method for allocating the mechanism’s costs across 1
customer classes; 2
(iii) the rationale supporting the utility company’s proposal for a 3
mechanism to benefit the eligible limited–income customers in the utility company’s service 4
territory; 5
(iv) a time frame and process for the Commission to review the 6
effectiveness of the mechanism after implementation; and 7
(v) any other information the Commission considers necessary or 8
useful to evaluate the proposal. 9
(e) In evaluating a limited–income mechanism, the Commission shall consider: 10
(1) the degree to which the mechanism promotes affordability of WATER, 11
SEWAGE DISPOSAL, electricity, or natural gas for limited–income customers; 12
(2) the public interest in allocating the costs of the mechanism between the 13
utility company’s shareholders and rate payers; 14
(3) the impact on rates, utility operating costs, customer arrearages, 15
customer disconnections, uncollectible costs, and successful completion of payment plans; 16
(4) the ability of a limited–income customer to continue to receive benefits 17
when relocating within the same service territory; 18
(5) coordination of benefits under the mechanism with any other public or 19
private assistance that may be available to the customer; 20
(6) a minimum level of support or assistance structure to provide equitable 21
availability of limited–income assistance across the State; and 22
(7) any other information the Commission considers appropriate. 23
(f) If an approved limited –income mechanism requires that the Office of Home 24
Energy Programs must certify an eligible limited –income customer’s qualifications to 25
participate in a limited –income mechanism, the Office shall certify an eligible 26
limited–income customer’s qualifications before the customer may participate in the 27
mechanism. 28
(g) An eligible limited–income customer who participates in a mechanism under 29
this section may also be eligible for other assistance programs offered in the State, 30
including those offered by a utility company or the Office of Home Energy Programs, the 31
Department of Housing and Community Development, or any other public or private 32
source. 33
HOUSE BILL 1164 7
SECTION 2. AND BE IT FURTHER ENACTED, That: 1
(a) (1) In this section the following words have the meanings indicated. 2
(2) “Eligible limited –income customer” and “limited –income mechanism” 3
have the meanings stated in § 4–309 of the Public Utilities Article. 4
(3) “Sewage disposal company” and “water company” have the meanings 5
stated in § 1–101 of the Public Utilities Article. 6
(b) The Public Service Commission shall study the feasibility of requiring the 7
following companies to adopt a limited –income mechanism to benefit eligible 8
limited–income customers: 9
(1) a water company; 10
(2) a water and sewage disposal company; and 11
(3) a sewage disposal company. 12
(c) On or before December 1, 2026, the Public Service Commission shall report its 13
findings to the Governor and, in accordance with § 2–1257 of the State Government Article, 14
the General Assembly. 15
SECTION 3. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall take 16
effect July 1, 2027. 17
SECTION 2. 4. AND BE IT FURTHER ENACTED, That , except as provided in 18
Section 3 of this Act, this Act shall take effect July 1, 2026. 19
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.