Natural Gas - Strategic Infrastructure Development and Enhancement - Surcharge and Plans (STRIDE Act of 2022)
If enacted, SB423 will result in significant changes to how natural gas companies in Maryland manage and fund infrastructure projects. The bill repeals and reenacts laws pertaining to public utilities, particularly aiming to streamline the adjustment of base rates and surcharges associated with infrastructure development. Gas companies will be able to adjust their rates more predictably, allowing for better financial planning and potentially leading to more timely upgrades in infrastructure. However, this might increase costs for consumers as these surcharges are passed on to them.
Senate Bill 423, known as the STRIDE Act of 2022, addresses the financial mechanisms for natural gas infrastructure investments in Maryland. The bill allows gas companies to include infrastructure replacement project costs in their base rates during a multiyear rate plan. This change aims to ensure that necessary upgrades and maintenance of natural gas infrastructure can be funded consistently over time by permitting a continuing annual surcharge for future infrastructure costs that are not included in the base rates. Such a framework not only enhances the reliability of natural gas service but also aims to foster investments in more sustainable energy infrastructure.
The discussion surrounding SB423 includes notable points of contention regarding the financial implications for consumers and accountability of gas companies. Critics may argue that allowing companies to continuously apply surcharges could lead to unjustified increases in consumer bills, particularly if the cost of actual projects is not transparently managed. There may also be concerns about the lack of strict oversight on how these infrastructure projects are selected and executed, which could lead to inefficiencies and misallocation of resources within the energy sector.