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WES MOORE, Governor Ch. 525
Chapter 525
(Senate Bill 556)
AN ACT concerning
Water Companies, Sewage Disposal Companies, and Water and Sewage Disposal
Companies – Rate Consolidation and Limited–Income Mechanisms
FOR the purpose of requiring the Public Service Commission to authorize certain rate
consolidations involving two or more water systems or sewage disposal systems;
requiring the Commission to allow water companies, sewage disposal companies, and
water and sewage disposal companies to aggregate certain revenues and costs for
certain purposes; authorizing the Commission to order gradual adjustments to
certain rates charged to a system over a certain time period; applying certain
provisions of law regarding limited–income mechanisms to water companies, sewage
disposal companies, and water and sewage disposal companies; authorizing the
Public Service Commission to require a water company, sewage disposal company,
or water and sewage disposal company to adopt a certain limited–income
mechanism; requiring the Commission to study the feasibility of requiring certain
companies to adopt a limited–income mechanism to benefit limited–income
customers; and generally relating to water companies, sewage disposal companies,
and water and sewage disposal companies.
BY repealing and reenacting, without amendments,
Article – Public Utilities
Section 1–101(a), (z), (gg), and (uu) and 4–309(d)
Annotated Code of Maryland
(2025 Replacement Volume and 2025 Supplement)
BY repealing and reenacting, with amendments,
Article – Public Utilities
Section 4–307 and 4–309(a) and (e) 4–309
Annotated Code of Maryland
(2025 Replacement Volume and 2025 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Public Utilities
1–101.
(a) In this division the following words have the meanings indicated.
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Ch. 525 2026 LAWS OF MARYLAND
(z) (1) “Public service company” means a common carrier company, electric
company, gas company, sewage disposal company, telegraph company, telephone company,
water company, or any combination of public service companies.
(2) “Public service company” does not include:
(i) a campground that provides water, electric, gas, sewage, or
telephone service to campers incident to the campground’s primary business of operating
and maintaining the campground; or
(ii) a person that owns or operates equipment used for charging
electric vehicles, including a person that owns or operates:
1. an electric vehicle charging station;
2. electric vehicle supply equipment; or
3. an electric vehicle charging station service company or
provider.
(gg) “Sewage disposal company” means a privately owned public service company
that owns or maintains facilities for the disposal of sewage.
(uu) “Water company” means a public service company that owns a water plant
and sells or distributes water for gain.
4–307.
(a) (1) In this section[, “rate] THE FOLLOWING WORDS HAVE THE
MEANINGS INDICATED.
(2) “RATE consolidation” means the use of the same or similar rates or
tariff schedules of rates for customers of the same class for two or more water or sewage
disposal systems even if the systems are not physically interconnected.
(3) “RATES” INCLUDES FIXED RATES, VOLUMETRIC RATES, TOLLS,
CHARGES, AND SCHEDULES.
(4) “SYSTEM” MEANS AN INTERCONNECTED SYSTEM OF FACILITIES
USED BY A WATER COMPANY, SEWAGE DISPOSAL COMPANY, OR WATER AND SEWAGE
DISPOSAL COMPANY TO PROVIDE WATER OR SEWAGE DISPOSAL SERVICES.
[(b) After notice to customers and holding a public hearing and an evidentiary
hearing, the Commission may authorize a rate consolidation of two or more water or sewage
disposal systems if:
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WES MOORE, Governor Ch. 525
(1) the water or sewage disposal systems have common ownership; and
(2) the rate consolidation is in the public interest.]
(B) THIS SECTION APPLIES ONLY TO PUBLIC SERVICE COMPANIES THAT
ARE WATER COMPANIES, SEWAGE DISPOSAL COMPANIES, OR WATER AND SEWAGE
DISPOSAL COMPANIES.
(C) THE COMMISSION SHALL AUTHORIZE A RATE CONSOLIDATION
PROPOSED BY A PUBLIC SERVICE COMPANY IN A BASE RATE PROCEEDING UNDER §
4–203 OF THIS TITLE INVOLVING TWO OR MORE WATER SYSTEMS OR SEWAGE
DISPOSAL SYSTEMS.
(D) WHEN AUTHORIZING RATE CONSOLIDATION UNDER SUBSECTION (C) OF
THIS SECTION, THE COMMISSION:
(1) SHALL ALLOW THE PUBLIC SERVICE COMPANY TO AGGREGATE
THE REVENUES AND COSTS OF THE WATER SYSTEMS AND SEWAGE DISPOSAL
SYSTEMS FOR PURPOSES OF DETERMINING APPROPRIATE RATES FOR THE SYSTEMS’
CUSTOMERS; AND
(2) MAY ORDER GRADUAL ADJUSTMENTS TO THE RATES CHARGED TO
A SYSTEM OVER A PERIOD NOT TO EXCEED 3 YEARS UNTIL FULL RATE
CONSOLIDATION IS ACHIEVED.
(E) THE COMMISSION:
(1) MAY NOT DISAPPROVE A RATE CONSOLIDATION PROPOSAL UNDER
THIS SECTION; AND
(2) MAY CONDITION THE AUTHORIZATION OF A RATE CONSOLIDATION
PROPOSAL ONLY AS PROVIDED IN SUBSECTION (D)(2) OF THIS SECTION.
(F) AFTER THE COMMISSION HAS AUTHORIZED A RATE CONSOLIDATION
PROPOSAL UNDER THIS SECTION, THE COMMISSION SHALL CONTINUE TO
AUTHORIZE AND MAINTAIN THE RATE CONSOLIDATION IN SUBSEQUENT ORDERS ON
APPLICATIONS OF THE PUBLIC SERVICE COMPANY UNDER § 4–203 OF THIS TITLE.
4–309.
(a) (1) In this section the following words have the meanings indicated.
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Ch. 525 2026 LAWS OF MARYLAND
(2) “Eligible limited–income customer” means a residential customer of a
utility company with annual income that:
(i) 1. is at or below 175% of the federal poverty level; or
2. for a customer at least 67 years of age, is at or below 200%
of the federal poverty level; or
(ii) meets a broader designation approved by the Commission.
(3) “Limited–income mechanism” or “mechanism” means a process
approved by the Commission under this section to benefit an eligible limited–income
customer of a utility company.
(4) “Payment plan” means an agreement between an eligible
limited–income customer and a utility company to pay an arrearage balance over a specific
period of time to avoid disconnection of a utility service.
(5) (i) “Utility company” means:
1. an electric company[,];
2. a gas and electric company[, or];
3. a gas company;
4. A WATER COMPANY;
5. A WATER AND SEWAGE DISPOSAL COMPANY; OR
6. A SEWAGE DISPOSAL COMPANY.
(ii) “Utility company” does not include a small rural electric
cooperative.
(b) The General Assembly finds and declares that the societal benefits of a
well–constructed limited–income mechanism to benefit Maryland’s eligible limited–income
customers are in the public interest.
(c) (1) Subject to the approval of the Commission, a utility company shall
adopt a limited–income mechanism to benefit an eligible limited–income customer.
(2) Notwithstanding § 4–503(b) of this title, the mechanism may take the
form of a program, tariff provision, credit, rate, rider, or other means to assist an eligible
limited–income customer to afford a utility service.
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WES MOORE, Governor Ch. 525
(3) A municipal electric utility may adopt a limited–income mechanism
subject to the approval of the Commission in the same manner as a utility company in
accordance with this section.
(4) THE COMMISSION MAY REQUIRE A WATER COMPANY, SEWAGE
DISPOSAL COMPANY, OR WATER AND SEWAGE DISPOSAL COMPANY TO ADOPT A
LIMITED–INCOME MECHANISM SUBJECT TO THE APPROVAL OF THE COMMISSION IN
THE SAME MANNER AS A UTILITY COMPANY IN ACCORDANCE WITH THIS SECTION.
(d) (1) A utility company that proposes a limited–income mechanism for
Commission approval under subsection (c) of this section shall include the proposal in:
(i) a separate application for approval of the mechanism; or
(ii) only with the prior approval of the Commission, an application
for a base rate proceeding, including an alternative rate proceeding, or any other proceeding
to alter the utility company’s base rates under the authority of the Commission.
(2) A proposal submitted under this section shall allocate the prudently
incurred costs of the limited–income mechanism across rate classes.
(3) The proposal shall include:
(i) a detailed description of the proposed mechanism;
(ii) the proposed method for allocating the mechanism’s costs across
customer classes;
(iii) the rationale supporting the utility company’s proposal for a
mechanism to benefit the eligible limited–income customers in the utility company’s service
territory;
(iv) a time frame and process for the Commission to review the
effectiveness of the mechanism after implementation; and
(v) any other information the Commission considers necessary or
useful to evaluate the proposal.
(e) In evaluating a limited–income mechanism, the Commission shall consider:
(1) the degree to which the mechanism promotes affordability of WATER,
SEWAGE DISPOSAL, electricity, or natural gas for limited–income customers;
(2) the public interest in allocating the costs of the mechanism between the
utility company’s shareholders and rate payers;
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Ch. 525 2026 LAWS OF MARYLAND
(3) the impact on rates, utility operating costs, customer arrearages,
customer disconnections, uncollectible costs, and successful completion of payment plans;
(4) the ability of a limited–income customer to continue to receive benefits
when relocating within the same service territory;
(5) coordination of benefits under the mechanism with any other public or
private assistance that may be available to the customer;
(6) a minimum level of support or assistance structure to provide equitable
availability of limited–income assistance across the State; and
(7) any other information the Commission considers appropriate.
(f) If an approved limited–income mechanism requires that the Office of Home
Energy Programs must certify an eligible limited–income customer’s qualifications to
participate in a limited–income mechanism, the Office shall certify an eligible
limited–income customer’s qualifications before the customer may participate in the
mechanism.
(g) An eligible limited–income customer who participates in a mechanism under
this section may also be eligible for other assistance programs offered in the State,
including those offered by a utility company or the Office of Home Energy Programs, the
Department of Housing and Community Development, or any other public or private
source.
SECTION 2. AND BE IT FURTHER ENACTED, That:
(a) (1) In this section the following words have the meanings indicated.
(2) “Eligible limited–income customer” and “limited–income mechanism”
have the meanings stated in § 4–309 of the Public Utilities Article.
(3) “Sewage disposal company” and “water company” have the meanings
stated in § 1–101 of the Public Utilities Article.
(b) The Public Service Commission shall study the feasibility of requiring the
following companies to adopt a limited–income mechanism to benefit eligible
limited–income customers:
(1) a water company;
(2) a water and sewage disposal company; and
(3) a sewage disposal company.
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WES MOORE, Governor Ch. 525
(c) On or before December 1, 2026, the Public Service Commission shall report its
findings to the Governor and, in accordance with § 2–1257 of the State Government Article,
the General Assembly.
SECTION 3. AND BE IT FURTHER ENACTED, That Section 1 of this Act shall take
effect July 1, 2027.
SECTION 2. 4. AND BE IT FURTHER ENACTED, That, except as provided in
Section 3 of this Act, this Act shall take effect July 1, 2026.
Approved by the Governor, May 12, 2026.
–7–Every fact on this page links to its source, starting with the official bill record.