HB 102
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 102 (Delegate D.E. Davis)
Economic Matters Finance
Public Service Commission - Public Utility Regulation Fund - Cap
This bill increases the maximum amount that the Public Service Commission (PSC) may
assess each public service company to fund its operations each year. Specifically, the
amount is increased, from 0.17% to 0.25%, of each company’s gross operating revenues
derived from intrastate utility and electricity supplier operations in the preceding
calendar year. The bill takes effect June 1, 2020.
Fiscal Summary
State Effect: Increasing the percentage of public service company revenues that PSC may
assess each year does not directly affect special fund revenues or expenditures, as discussed
below.
Local Effect: Local government finances and operations are not materially affected.
Small Business Effect: Minimal.
Analysis
Current Law: The costs and expenses of PSC and the Office of People’s Counsel (OPC)
must be borne by the public service companies that are subject to PSC’s jurisdiction. The
costs and expenses for each upcoming fiscal year, as estimated by the PSC chair, are
assessed each May and due the following fiscal year. Estimates are subject to mid-year
revision and final costs for each fiscal year are accounted for in the following fiscal year,
subject to specified requirements for revised billing.
The total amount that may be charged to a public service company for a State fiscal year,
as a percentage of the company’s gross operating revenues derived from intrastate utility
and electricity supplier operations in the preceding calendar year may not exceed 0.17% for
PSC. PSC is also authorized to assess up to 0.05% for the expenses of OPC. Assessed
amounts accrue to the Public Utility Regulation Fund.
Background: PSC regulates gas, electric, telephone, water, sewage disposal, and certain
passenger transportation companies doing business in Maryland. PSC sets utility rates,
collects and maintains records and reports of public service companies, reviews plans for
service, inspects equipment, audits financial records, handles consumer complaints, and
adopts and enforces rules and regulations.
Revenue Caps in Other Jurisdictions
According to research conducted by PSC, Maryland is 1 of 28 states with a cap on revenues
that a public utility commission can collect through assessment. Of those states, 21 have a
higher cap than Maryland, with an average cap of 0.33% of public service company
revenues. The remaining 22 states have no cap on assessments, except for the budget
process that sets each commission’s spending.
Assessment Revenues Have Decreased while PSC Responsibilities Have Increased
As shown in Exhibit 1, the maximum amount that PSC is able to assess public service
companies has decreased over time. As the 0.17% limit has not been changed in more than
four decades, this is entirely the result of declining public service company revenues. PSC
advises that a majority of assessable revenues are from electric and gas companies, whose
revenues are down due to energy efficiency programs, lower gas prices, and slow
population growth. Regulated telephone company revenues are also down due to lower
demand. Coincident with declining available revenues, PSC has undertaken a number of
additional responsibilities, including offshore wind procurements, ongoing gas
infrastructure surcharge cases, solar siting requests, pilot programs, and various studies,
working groups, and technical conferences.
PSC’s budget as approved by the General Assembly exceeded assessable revenues each
year from fiscal 2016 through 2019 – although actual spending has been lower than both.
A review of the differences between budgeted amounts and actual spending suggests that
a significant portion can be attributed to PSC spending less than budgeted on consultant
services. Fiscal 2020 amounts are not yet final – PSC is seeking a budget amendment of
$2.3 million to supplement its $19.6 million budget due to recently passed legislation – but
the overall trend is likely to continue.
HB 102/ Page 2
 Exhibit 1
Public Utility Regulation Fund Assessable Revenues, Appropriations, and Spending
Fiscal 2011-2019
($ Millions)
Fiscal Maximum Budget Actual
Year Assessable Revenue Appropriation Difference Spending Difference
2011 $20.1 $17.0 $3.1 $16.2 $3.9
2012 $20.1 $17.7 $2.4 $17.7 $2.4
2013 $18.9 $15.8 $3.1 $15.1 $3.8
2014 $16.7 $16.8 -$0.1 $15.9 $0.8
2015 $17.9 $16.4 $1.5 $17.1 $0.8
2016 $18.7 $18.9 -$0.2 $16.4 $2.3
2017 $19.1 $19.3 -$0.2 $17.2 $1.9
2018 $18.5 $18.9 -$0.4 $17.6 $0.9
2019 $17.8 $19.1 -$1.3 $16.9 $0.9
Source: Public Service Commission (Revenues); Department of Legislative Services (Actual Spending)
State Fiscal Effect: Increasing the percentage of public service company revenues that
PSC may assess each year does not directly affect special fund revenues or expenditures.
However, it does increase the likelihood that the assessment can collect a sufficient amount
of revenues to fund PSC’s budget if public utility revenues continue to decline.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Public Service Commission; Department of Legislative Services
Fiscal Note History: First Reader - January 21, 2020
an/lgc Third Reader - March 12, 2020
Revised - Amendment(s) - March 12, 2020
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 102/ Page 3


Statutes affected:
Text - First - Public Service Commission - Public Utility Regulation Fund - Cap: 2-110 Public Utilities
Text - Third - Public Service Commission - Public Utility Regulation Fund - Cap: 2-110 Public Utilities