AOBA and AOBA Alliance provided a utility market update for members and participants on Wednesday January 28, 2026. Attached is the slide deck from the utility update. Constellation provided an energy market update as well and those slides are available by reaching out to kcarey@aoba-metro.org

January 28th 11AM via Zoom

Frann Francis, Senior Vice President and General Counsel for AOBA, and Kevin Carey, Vice President of AOBA Alliance, will update AOBA members on the latest rate case developments

William Sticka, Director of Technical Sales/Market Strategy for Constellation, will present the market fundamentals impacting electric and natural gas pricing, updates on PJM Capacity prices as well as purchasing strategies and opportunities for AOBA members and AOBA Alliance participants.

Register below.

https://www.aoba-metro.org/events/utility-committee-meeting-and-energy-market-update-2026-1

WG Proposed Rate Increase
Washington Gas Light Company filed an application for an increase in revenue of $82.5 million on December 29, 2025. The Company requests an increase of $82.5 million in annual operating revenues based on a proposed 8.07% rate of return and a 10.85% return on equity. The proposed increase includes $15.4 million of revenue requirement from the transfer of STRIDE program costs to base rates.
Washington Gas provided an estimate of the impact to each rate class below. The new rates proposed would be effective on July 27, 2026. Commercial and group-metered apartment customers would see approximately a 20% increase for those buildings that heat or cool using natural gas. That increase would be for the Washington Gas distribution components only and do not include the gas supply charges. Washington Gas’ estimates, including gas supply using the Purchased Gas Cost (“PGC”), show an increase between 10-18% for AOBA member buildings based on Washington Gas’ calculations. AOBA has intervened in this case on behalf of AOBA members and will inform members as the case progresses. A pre-hearing conference is scheduled for January 27, 2026.

Caveat on Estimates
These estimates from Washington Gas are based on class averages. WG has proposed significant changes to the allocation of costs within each customer class which may cause significant variations in the impact on individual buildings. Washington Gas’ Application states:
“the non-residential customer classes’ current block rates are beginning a transition to a flat, single-rate structure. As part of this transition for all non-residential customers, the Company proposes to narrow the current differentials between block rates. In addition, for C&I and GMA customers that are currently on a three-block declining rate structure, the Company proposes to reduce the number of blocks to two blocks.”
This block rate change will likely impact large natural gas users significantly with the large increases in the 2nd level charges shown below.

Rate Case History, WG Case No. 9704
Washington Gas last filed for a rate increase in Maryland on May 18, 2023 requesting a $49.4 million rate increase based on a 7.726% rate of return and ROE of 10.75%. Through the efforts of AOBA and other intervenors in the case, the PSC approved a $12.6 million increase and a 7.04% rate of return and 9.5% ROE, which provided significant savings to AOBA members.

AOBA is reviewing the application for its impact on sample member buildings. If you are interested in seeing the forecasted impact to your individual building or portfolio, contact Kevin Carey @ kcarey@aoba-metro.org.

AOBA, AOBA Alliance and Constellation hosted a Utility Rate Case Update and Energy Market Update for AOBA members and Alliance participants on November 18th.

Attached is the presentation.

On January 31, 2025, Pepco filed its annual Bill Stabilization Adjustment (“BSA”) in the District. The BSA was first implemented in January 2010.  The rationale behind the BSA was to remove the link between electricity use and utility revenue. Until now, the more electricity customers used, the more revenues Pepco received. Pepco argued that the  previous rate structure created a disincentive for the utility to encourage customers to conserve energy since it lowered Pepco’s revenues.

Previously, the BSA was adjusted monthly and contained a 10% cap provision so that the monthly charge could not exceed 10 % of the expected revenue from each rate class.  The BSA accrues the amount of expected revenue vs. what Pepco has collected and the under collection is then billed to rate payers.  The BSA balances have been accruing at a significant rate, especially for the GT_LV class, which has a balance of $56 million in uncollected revenue.

There have been several issues with the BSA that AOBA has testified about in the most recent Pepco rate case and other cases.  Partly in response, the DC PSC authorized a change in the BSA in its most recent ruling:

1. PSC directed Pepco to remove $15.3M balance, due to Pepco errors in the BSA demand billing determinant factor
2. PSC also directed Pepco to create a regulatory asset to collect the BSA balances as of December 31, 2024 and collect  those balances over the next 10 years.

The new BSA charge will be an annual charge as a separate line item on customers’ bills to be collected from March 2025 through February 2026.  This charge will be listed as BSA Adjustment II on the bill. For a sample office building on the GT_LV rate schedule,  the new BSA represents an increase of ~ $14K annually.

There will be a BSA Adjustment I that will calculate the over/under collected revenue for CY 2025.  This will be another line item on bills beginning March 2026 through February 2027.

AOBA and AOBA Alliance presented an update to the Pepco DC rate case, FC 1176. Pepco filed its compliance rates in December effective January 1, 2025. The compliance rates resulted in a 35% reduction in the original request by Pepco but buildings will see some large increases in their Pepco distribution bills in 2025.

Presentation

Rate Impact

AOBA Alliance, Inc. and Constellation held the quarterly energy market update informing participants about changes in the PJM Capacity market as well updating the status of utility rate cases in Maryland, DC and Virginia. If you would like more information or access to the Constellation presentation, please contact kcarey@aoba-metro.org

November 2024

AOBA Utility Committee Meeting
November 20 | 11 AM – 12 PM | via Zoom
Register

Frann Francis, Senior Vice President and General Counsel for AOBA, and Kevin Carey, Vice President of AOBA Alliance, will update AOBA members on the ongoing rate cases in Maryland and D.C. and their impacts on budgets as well as other energy related issues impacting members and participants.

William Sticka, Director of Technical Sales/Market Strategy for Constellation, will present the market fundamentals impacting electric and natural gas pricing, updates on winter weather forecasts, PJM Capacity prices as well as purchasing strategies and opportunities for AOBA members and AOBA Alliance participants.