Maryland PSC Cuts Pepco Multi-Year Rate Plan True-Up

PSC cuts Pepco's reconciliation request

On March 31, 2026, the Maryland Public Service Commission granted $13.36 million of Potomac Electric Power Company's $30.6 million true-up for the final year of its first three-year multi-year rate plan [md-psc-pepco-trueup-2026]. Pepco filed the reconciliation on July 29, 2024, seeking recovery for 2023 spending it said was under-collected [md-psc-pepco-trueup-2026].

Commission Chair Kumar P. Barve said approving the full $30.6 million request would risk utility unaffordability and reward questionable forecasting and budget overruns [md-psc-pepco-trueup-2026].

The order's net monthly bill impact is about 64 cents for the average residential customer from April 1, 2026 through March 31, 2027 [md-psc-pepco-trueup-2026].

This proceeding is separate from Pepco's October 2025 base rate case still before the PSC [md-psc-pepco-trueup-2026].

Multi-year rate plans and cannabis C&I bills

Pepco became Maryland's second utility to use a multi-year rate plan pilot approved in February 2020 [md-psc-pepco-trueup-2026]. The pilot allowed reconciliations after the three-year period. This is the second permitted reconciliation after the plan ended [md-psc-pepco-trueup-2026].

Large C&I cultivation accounts see true-ups through delivery riders, not supply:

Charge type	Affected by true-up?	Shoppable?
Default/retail supply	Indirectly via total bill	Yes
Distribution + demand	Yes	No
PJM transmission (TEC/NITS)	Separate trend	No

Maryland OPC reports transmission now represents roughly 10 percent of most Maryland customer bills and is rising fast [md-opc-transmission-2026]. Read our OPC transmission report summary.

Why the PSC denied most of the ask

The Commission said Pepco's full request was about twice its approved budget for rate year three and nearly matched its original case ask [md-psc-pepco-trueup-2026]. In December 2025, the PSC similarly cut BGE's reconciliation from $152.3 million requested to $77.2 million granted [md-psc-pepco-trueup-2026].

Next Generation Energy Act reforms prohibit bill-increasing reconciliations in future multi-year plans, though this true-up fell under prior pilot rules [md-psc-pepco-trueup-2026].

Worked example: 64 cents vs C&I reality

The 64 cents/month figure is residential average [md-psc-pepco-trueup-2026]. A 400 kW grow (input) might allocate true-up dollars differently across demand classes.

Illustrative C&I allocation (inputs we chose, not PSC-published):

Item	Value
Approved true-up	$13.36M [md-psc-pepco-trueup-2026]
Hypothetical C&I share	35% of revenue requirement
C&I pool	~$4.68M/year
Large C&I customer count (input)	2,000
Average large C&I share	~$195/year (~$16/month)

Use Pepco tariff schedules when they post class-specific factors; this shows why cultivators should not dismiss true-ups as "only 64 cents."

Supply shopping still on the table

Maryland commercial supply choice continues under Maryland switching. True-ups and pending base rate cases change delivery, not the logic of comparing retail fixed supply to default service.

Pair supply shopping with:

• Demand peak management on Pepco tariffs
• Transmission trend monitoring per OPC [md-opc-transmission-2026]
• Demand charge FAQ review before expansion

Delaware Delmarva base rates in Docket 25-1555 show similar delivery/supply stacking in neighboring states.

Takeaway

Maryland regulators cut Pepco's multi-year true-up to $13.36 million, limiting average residential impact to ~64 cents/month [md-psc-pepco-trueup-2026]. Future reconciliations face tighter rules [md-psc-pepco-trueup-2026].

Cultivators should track October 2025 base rate filings and PJM transmission growth alongside supply contracts, treating each docket as a separate bill lever.

Next Generation Energy Act reconciliation ban

Maryland's Next Generation Energy Act prohibits bill-increasing reconciliations in future multi-year plans [md-psc-pepco-trueup-2026]. Pepco's $13.36M true-up is among the last allowed under pilot rules. Future delivery volatility shifts to base rate cases and transmission [md-opc-transmission-2026].

BGE parallel cut precedent

The PSC's BGE reconciliation cut from $152.3M to $77.2M in December 2025 foreshadowed Pepco's $30.6M to $13.36M cut [md-psc-pepco-trueup-2026]. Exelon subsidiaries face similar overspend scrutiny.

Cultivation siting in Pepco zone

Pepco Maryland serves DC suburbs and I-95 corridor sites near Baltimore-Washington markets. Delivery true-ups stack with OPC-documented transmission growth [md-opc-transmission-2026]. Supply shopping alone cannot offset $5.4B regional transmission pipeline OPC cites.

October 2025 base case watch

Pepco's October 2025 base rate filing remains pending separate from this true-up [md-psc-pepco-trueup-2026]. Model delivery with two dockets, not one resolved order.

Order 92264 citation

The March 31, 2026 order is Order No. 92264 in Case No. 9655 [md-psc-pepco-trueup-2026]. Cite the docket when writing comment letters or asking account managers how C&I demand classes absorb $13.36M [md-psc-pepco-trueup-2026].

Barve affordability quote

Chair Barve said even 64 cents for average residential customers does not fully mitigate affordability risks [md-psc-pepco-trueup-2026]. C&I cultivators with five-figure monthly bills should translate $13.36M true-up into class-specific impacts using Pepco tariff sheets, not residential averages [md-psc-pepco-trueup-2026].

BGE December precedent

BGE's reconciliation cut from $152.3M to $77.2M in December 2025 foreshadowed Pepco's $30.6M to $13.36M cut [md-psc-pepco-trueup-2026]. Exelon subsidiaries face shared overspend scrutiny across Maryland [md-psc-pepco-trueup-2026].

Pilot reconciliation sunset

Future multi-year plans cannot use bill-increasing reconciliations under Next Generation Energy Act reforms [md-psc-pepco-trueup-2026]. 2026 true-up is among the last of its kind under old pilot rules [md-psc-pepco-trueup-2026].

Three-year multi-year rate plan pilot history

Pepco became Maryland's second utility under the multi-year rate plan pilot approved February 2020 [md-psc-pepco-trueup-2026]. The pilot allowed annual formula rates with a reconciliation after year three. Pepco filed $30.6 million seeking recovery for 2023 spending it argued was under-collected [md-psc-pepco-trueup-2026].

Chair Kumar Barve said granting the full ask would reward questionable forecasting because the request was about twice the approved budget for rate year three [md-psc-pepco-trueup-2026]. Maryland's Next Generation Energy Act now prohibits bill-increasing reconciliations in future multi-year plans, though this true-up used legacy pilot rules [md-psc-pepco-trueup-2026].

BGE December 2025 reconciliation as Pepco precedent

In December 2025, the PSC cut BGE's reconciliation from $152.3 million requested to $77.2 million granted [md-psc-pepco-trueup-2026]. Pepco's March 31, 2026 cut from $30.6 million to $13.36 million follows the same overspend scrutiny pattern for Exelon subsidiaries [md-psc-pepco-trueup-2026].

Cultivators should not assume future true-ups will be available to recover delivery capital; volatility shifts to base rate cases and transmission [md-opc-transmission-2026].

Order 92264 and October 2025 base rate docket

Order No. 92264 in Case 9655 effective April 1, 2026 through March 31, 2027 limits average residential impact to 64 cents per month [md-psc-pepco-trueup-2026]. Pepco's October 2025 base rate filing remains pending separately [md-psc-pepco-trueup-2026].

Finance models need two scenario columns so true-up savings are not double-counted against future delivery hikes. Pair Pepco delivery tracking with Maryland switching guidance and Maryland cultivation facility energy. OPC reports transmission near 10% of bills rising toward $5.4 billion in allocated PJM projects [md-opc-transmission-2026], often larger than true-up dollars for high-kWh grows.

Barve affordability quote for C&I translation

Chair Barve said even 64 cents for average residential customers does not fully mitigate affordability risks [md-psc-pepco-trueup-2026]. C&I cultivators with five-figure monthly bills should translate $13.36 million true-up into class-specific impacts using Pepco tariff sheets, not residential averages [md-psc-pepco-trueup-2026].

Cultivation siting in Pepco Maryland corridor

Pepco Maryland serves DC suburbs and I-95 corridor sites near Baltimore-Washington markets [md-psc-pepco-trueup-2026]. Delivery true-ups stack with OPC-documented transmission growth [md-opc-transmission-2026]. Supply shopping alone cannot offset TEC/NITS trends on 120,000 kWh accounts [md-opc-transmission-2026].

Pilot reconciliation sunset planning

Future multi-year plans cannot use bill-increasing reconciliations under Next Generation Energy Act reforms [md-psc-pepco-trueup-2026]. Budget 2027+ delivery assuming base rate cases and transmission, not true-up refunds [md-psc-pepco-trueup-2026].

July 29, 2024 reconciliation filing origin

Pepco filed the $30.6 million reconciliation on July 29, 2024, seeking recovery for 2023 spending it argued was under-collected relative to the multi-year plan budget [md-psc-pepco-trueup-2026]. The March 31, 2026 order granting $13.36 million effective April 1, 2026 through March 31, 2027 closes the pilot reconciliation chapter [md-psc-pepco-trueup-2026].

Demand peak management on Pepco tariffs

Pair supply shopping with staggered photoperiods and HVAC sequencing on Pepco demand tariffs [md-psc-pepco-trueup-2026]. True-up dollars may look small per residential customer, but kW growth from canopy expansion multiplies delivery faster than ¢/kWh supply savings [md-opc-transmission-2026]. See Maryland dispensary retail energy for lower kW retail sites versus indoor flower loads [md-psc-pepco-trueup-2026].

Archive Order 92264 for canopy expansion models

Save Order No. 92264 in Case 9655 with October 2025 base rate materials when updating Pepco delivery forecasts for canopy expansions [md-psc-pepco-trueup-2026]. Treat true-up and base case as separate scenario columns so savings are not double-counted against future delivery hikes [md-psc-pepco-trueup-2026] [md-opc-transmission-2026].

Cultivators should track October 2025 base rate filings and PJM transmission growth alongside supply contracts, treating each docket as a separate bill lever [md-psc-pepco-trueup-2026] [md-opc-transmission-2026]. Future multi-year plans cannot rely on bill-increasing reconciliations under Next Generation Energy Act reforms; plan 2027 delivery on base cases and transmission, not true-up refunds [md-psc-pepco-trueup-2026].

Maryland regulators cut Pepco's multi-year true-up to $13.36 million, limiting average residential impact to ~64 cents per month [md-psc-pepco-trueup-2026]. C&I cultivators should translate Order 92264 into class-specific delivery forecasts and monitor October 2025 base rate filings separately [md-psc-pepco-trueup-2026] [md-opc-transmission-2026]. Pair supply shopping with demand peak management on Pepco tariffs under Maryland switching guidance [md-psc-pepco-trueup-2026]. Transmission near 10% of bills and rising can exceed true-up cents on high-kWh Pepco accounts even when residential impacts look small [md-opc-transmission-2026] [md-psc-pepco-trueup-2026]. See Maryland OPC transmission report summary for TEC/NITS rider trends parallel to this true-up order [md-opc-transmission-2026].