BALTIMORE, MD (WBFF) — Baltimore is proposing a new fee for companies that use the city’s underground conduit system, a move city leaders say is needed to keep up with rising costs and growing repair demands after underground fires in 2024 and 2025.
Mayor Brandon Scott proposed a new conduit franchise fee for Baltimore Gas & Electric and other entities that use the underground conduit system. The fee would begin Jan. 1, 2027, apply to all users and be set at $4.05 per linear foot, with future adjustments for inflation.
“Our conduit system is one of the most important components of our City’s infrastructure, and it is imperative we continue prioritizing its maintenance and improvement,” Scott said. “The agreement we negotiated back in 2023 has allowed us to make significant progress in upgrading and modernizing the system through significant capital improvement. However, as the system faces higher construction costs and ever-changing needs, the City must constantly evolve our approach to keep pace with our needs in 2026 and in the years to come. This new proposal takes into account those needs, builds on the progress we’ve made since 2023, and outlines a path for cooperation between all of our partners who utilize the conduit system.”
The proposed fee would replace the 2023 agreement between the city and BGE, the largest occupant of the city’s conduit system. Under that 2023 agreement, the city replaced the traditional franchise fee for BGE by requiring the utility to make capital improvements to the city’s conduit. The city said BGE is on track to meet its obligation of making approximately $120 million in capital investments to the system by the end of 2026.
Other conduit users continued paying the city $2.20 per linear foot, a rate the city said has not increased since 2019. The city said it notified BGE in June that it would not renew the 2023 agreement for another three years.
City officials said the 2023 agreement, combined with franchise fees collected from remaining users, no longer provides sufficient investment to maintain the conduit system because of evolving needs and inflationary pressures. The city said the new proposed rate reflects the need for more proactive repairs, increased construction costs and daily operations.
To support the work, the Baltimore City Department of Transportation will reestablish several positions within the department dedicated to conduit maintenance and support, the city said.
Council President Zeke Cohen voiced support for the proposal and said he expects BGE not to pass the costs on to customers.
“It is deeply important to me that companies like BGE contribute directly to Baltimore’s renaissance, not just benefit from it,” Cohen said. “As BGE records historic profits for shareholders, the City must invest more in the conduit system for the safety of our residents and businesses. It is my expectation that BGE does not pass on these costs to ratepayers. Their shareholders, not our residents, must pay for these investments. I stand with Mayor Scott, Comptroller Henry, and all of our city residents as we work to secure more funding to make the system safer and more effective.”
City Comptroller Bill Henry also backed the proposed rate. “I have been and will continue to be supportive of efforts to set the conduit franchise fee at an appropriate level, one which takes into account the substantially higher costs the City has been facing as stewards of public infrastructure,” Henry said. “On behalf of the residents of Baltimore City – the actual owners of our conduit system – it is vitally necessary that the City charge all conduit users the rate needed to provide for reasonable maintenance and improvements. As such, I am glad that we are resuming a normal franchise relationship with BGE and I look forward to an acknowledgement of the need for this increased fee from them and other conduit users as the City moves forward to provide a better conduit environment.”
City Solicitor Ebony M. Thompson said the city has the authority to charge a reasonable rate to maintain the system.
The city’s conduit system spans 700 miles and includes underground ducts and manholes constructed in the early 20th century to house electrical, telecommunications and fiber optic cables that power most of the city, according to the release. The city said it has maintained the system through reactive repairs and capital improvement work.
Department of Transportation Director Veronica P. McBeth said the fee would support reinvestment in the system.
The proposed agreement is expected to go before the city’s Board of Estimates on Aug. 5, 2026.
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