John C. Frain Director Regulatory Strategy & Revenue Policy P.O. Box 1475 Baltimore, Maryland 21203-1475

Telephone 410.470.1169 Fax 410.470.8022 www.bge.com john.frain@bge.com

Via Electronic Filing

November 20, 2017

Mr. David J. Collins

Executive Secretary

Public Service Commission of Maryland, 16th Flr.

William Donald Schaefer Tower

6 St. Paul Street, 16th Floor

Baltimore, Maryland 21202 - 6806

Re: Supplement No. 439 to P.S.C. Md. G-9: Rider 1 – Gas Efficiency Charge

Dear Mr. Collins:

Baltimore Gas and Electric Company (“BGE” or the “Company”) hereby files Supplement No. 439

to P.S.C. Md. G-9. This Supplement revises the residential Gas Efficiency Charge for Gas Rate Schedule D

from $0.0438 per therm to $0.0469 per therm, effective with January 2018 billings. As a result, the average

monthly Gas Efficiency Charge for a typical residential gas customer using 57 therms per month will

increase from $2.50 per month to $2.67 per month. The increase to the Charge is primarily the result of

adding a new year of amortization expenses at a higher spend level while dropping off an early year of

amortization expense at a lower spend level. This filing also includes the 2018 forecasted costs associated

with BGE’s September 1, 2017 proposed 2018-2020 EmPower Maryland program filing currently pending.

Attached are the documents supporting the development of the proposed $0.0469 per therm Charge

and the “red-lined” and “clean” Rider 1 tariff pages including the proposed Charge.

BGE respectfully requests consideration of the Rider 1 Charge at the December 13, 2017

Administrative Meeting. If the Commission issues an order on the proposed 2018-2020 EmPOWER

Maryland program filing plan that impacts the proposed Rider 1 Charge, BGE will update this filing to

incorporate any necessary edits.

Respectfully Submitted,

John C. Frain

Attachments

Cc: Paula Carmody, Office of People’s Counsel

Supplement No. 439

(Redline)

Baltimore Gas and Electric Company – Gas 83

P.S.C. Md. – G-9 (Suppl. 439428) Filed 11/20/201711/21/2016 – Effective with January20182017 Billings

RIDERS

1. Gas Efficiency Charge

Rates for service under the Company’s rate schedules are subject to the Charge to recover EligibleCosts (hereinafter defined) applicable to that rate schedule incurred by the Company for conservation programdesign and for specific conservation programs approved for inclusion in the Charge by the Commission. TheCharge is calculated for a 12-month cost recovery period beginning January 1 of each year, using theprocedures described below.

Calculation of Efficiency ChargeThe Charge for the 12-month period beginning January 1 of each year is determined for each rate

schedule by dividing Eligible Costs expected to be allocated to the schedule for the 12-month period by thetherm sales expected for that rate schedule over the 12-month period. Subject to prior Commission approval,the Charge may be revised at any time to include additional conservation programs or to otherwise adjust forsignificant changes in Eligible Costs. Details concerning the calculation of the Charge are filed with andapproved by the Commission prior to their use in billing.

The Charge effective with January 20182017 billings is as follows:

Rate Schedule Rate ($ per therm)D 0.04690.0438

Eligible CostsTotal costs eligible for recovery in a 12-month Charge period are the program design costs and

the implementation costs of programs approved by the Commission incurred from the following costcategories:

(1) Program Costs. These include program design costs, and implementation costs such as customereducation, marketing, rebates and buy-downs, capital, measurement and verification (M&V) andevaluation for approved conservation programs. The regulatory asset is amortized over fiveyears and earns a return at the rate of the Company’s most recent authorized Gas System rate ofreturn.

(2) Imbalances. For each rate schedule, Imbalances are the differences between cumulative costseligible for recovery and revenues collected through the Charge as of December 31 of each year.The estimated Imbalance includes 9 months of actual and 3 months of estimated data. AnImbalance is debited or credited against the costs eligible for recovery during the 12-monthsbeginning January 1. During its disposition, an Imbalance earns interest at the rate of theCompany’s most recent authorized Gas System rate of return. Such rate is adjusted for taxes,when the Imbalance represents an under-collection of costs to the Company.

Supplement No. 439

(Clean)

Baltimore Gas and Electric Company – Gas 83

P.S.C. Md. – G-9 (Suppl. 439) Filed 11/20/2017 – Effective with January 2018 Billings

RIDERS

1. Gas Efficiency Charge

Rates for service under the Company’s rate schedules are subject to the Charge to recover EligibleCosts (hereinafter defined) applicable to that rate schedule incurred by the Company for conservation programdesign and for specific conservation programs approved for inclusion in the Charge by the Commission. TheCharge is calculated for a 12-month cost recovery period beginning January 1 of each year, using theprocedures described below.

Calculation of Efficiency ChargeThe Charge for the 12-month period beginning January 1 of each year is determined for each rate

schedule by dividing Eligible Costs expected to be allocated to the schedule for the 12-month period by thetherm sales expected for that rate schedule over the 12-month period. Subject to prior Commission approval,the Charge may be revised at any time to include additional conservation programs or to otherwise adjust forsignificant changes in Eligible Costs. Details concerning the calculation of the Charge are filed with andapproved by the Commission prior to their use in billing.

The Charge effective with January 2018 billings is as follows:

Rate Schedule Rate ($ per therm)D 0.0469

Eligible CostsTotal costs eligible for recovery in a 12-month Charge period are the program design costs and

the implementation costs of programs approved by the Commission incurred from the following costcategories:

(1) Program Costs. These include program design costs, and implementation costs such as customereducation, marketing, rebates and buy-downs, capital, measurement and verification (M&V) andevaluation for approved conservation programs. The regulatory asset is amortized over fiveyears and earns a return at the rate of the Company’s most recent authorized Gas System rate ofreturn.

(2) Imbalances. For each rate schedule, Imbalances are the differences between cumulative costseligible for recovery and revenues collected through the Charge as of December 31 of each year.The estimated Imbalance includes 9 months of actual and 3 months of estimated data. AnImbalance is debited or credited against the costs eligible for recovery during the 12-monthsbeginning January 1. During its disposition, an Imbalance earns interest at the rate of theCompany’s most recent authorized Gas System rate of return. Such rate is adjusted for taxes,when the Imbalance represents an under-collection of costs to the Company.

Supplement No. 439

ATTACHMENT

EXH. 1 ATT.1

TOTALRATE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURES

PROGRAM SCHEDULE (2012) (2013) (2014) (2015) (2016) (2017) (2012) - (2017)(1) (1a) (1b) (1c) (1d) (1e) 2

SOURCE: (1) + (1a) + (1b) + (1c) + (1d) + (1e)

Residential - EE&C D 13,539,484$ 12,533,934$ 16,218,395$ 12,937,280$ 14,721,838$ 14,874,622 84,825,554

6TH YR AMORT. 5TH YR AMORT. 4TH YR AMORT.3RD YR AMORT.2ND YR AMORT.1st YR AMORT. TOTAL AMORTIZED UNAMORTIZEDRATE FOR 2012 FOR 2013 FOR 2014 FOR 2015 FOR 2016 FOR 2017 AMORTIZED COSTS ADJ. BALANCE

PROGRAM SCHEDULE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURES FOR TAXES 12/31/2017(3) (3a) (3b) (3c) (3d) (3e) 4 5 6

SOURCE: (3) + (3a) + (3b)+ (3c)+ (3d) + (3e) (4) /(1-0.021877) (2) - (4)

- (Prior Yrs. Amortization)Residential - EE&C D 1,331,419$ 2,506,787$ 3,243,679$ 2,587,456$ 2,944,368$ 1,494,275$ 14,107,983$ 14,423,526$ 36,238,668$

BALTIMORE GAS AND ELECTRIC COMPANYCOMPUTATION OF 2017 GAS AMORTIZED PROGRAM EXPENDITURES

EXPENDITURES

AMORTIZED EXPENDITURES

EXH.1 ATT.2

BEGINNING ENDING AVG BAL NET

RATE BALANCE BALANCE AVERAGE OF DEFERRED

PROGRAM SCHEDULE 1/1/2017 12/31/2017 BALANCE TAXES RETURN

(1) (2) (3) (4) (5)

SOURCE: Exh.1-Att.1, Col. 6 [(1)+(2)] / 2 (3) x 0.596375 (4) x 0.1104

Residential - EE&C D 35,217,429$ 36,238,668$ 35,728,048$ 21,307,315$ 2,352,328$

BALTIMORE GAS AND ELECTRIC COMPANYCOMPUTATION OF 2017 GAS PROGRAM EARNINGS

EXH. 1 ATT.3

AMORTIZED TOTAL

RATE CALENDAR PROGRAM TRUE UP PRIOR YEAR RECOVERABLE GROSS CARRYING NET

PROGRAM SCHEDULE REVENUES COSTS RETURN 2016 IMBALANCE EXPENSES IMBALANCE COSTS IMBALANCE(1) (2) (3) (4) (5) (6) (7) (8) (9)

SOURCE:

2017 Actuals Through

Sept, Forecast Oct-Dec Exh.1-Att.1, Col. 5Exh.1-Att.2, Col. 5 Prior Year Filing (2) + (3) + (4) + (5) (6) - (1) (7) + (8)

Exh.2-Att.3, Col. 3

Residential - EE&C D 16,406,027$ 14,423,526$ 2,352,328$ (44,512)$ 1,222,947$ 17,954,289$ 1,548,262$ 85,464$ 1,633,726$

BALTIMORE GAS AND ELECTRIC COMPANYCOMPUTATION OF 2017 GAS PROGRAM IMBALANCES

EXH.2 ATT.1

TOTAL

RATE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURES

PROGRAM SCHEDULE (2013) (2014) (2015) (2016) (2017) (2018) (2013) - (2018)

(1) (1a) (1b) (1c) (1d) (1e) 2

SOURCE: Exh.1-Att.1, Col.1aExh.1-Att.1, Col.1b Exh.1-Att.1, Col.1c Exh.1-Att.1, Col.1d Exh.1-Att.1, Col.1e (1) + (1a) + (1b) + (1c) + (1d) + (1e)

Residential - EE&C D 12,533,934$ 16,218,395$ 12,937,280$ 14,721,838$ 14,874,622$ 17,431,679$ 88,717,748$

6th YR AMORT. 5th YR AMORT. 4TH YR AMORT. 3RD YR AMORT. 2ND YR AMORT. 1ST YR AMORT. TOTAL AMORTIZED UNAMORTIZED

RATE FOR 2013 FOR 2014 FOR 2015 FOR 2016 FOR 2017 FOR 2018 AMORTIZED COSTS ADJ. BALANCE

PROGRAM SCHEDULE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURES FOR TAXES 12/31/18

(3) (3a) (3b) (3c) (3d) (3e) (4) (5) (6)

SOURCE: (3) + (3a) + (3b) + (3c) + (3d) + (3e) (4) /(1-0.021877) (2) - (4)

- (Prior Yrs. Amortization)

Residential - EE&C D 1,198,012$ 3,243,679$ 2,587,456$ 2,944,368$ 2,974,924$ 1,888,227$ 14,836,666$ 15,168,507$ 38,833,681$

BALTIMORE GAS AND ELECTRIC COMPANY

COMPUTATION OF 2018 GAS AMORTIZED PROGRAM EXPENDITURES

EXPENDITURES

AMORTIZED EXPENDITURES

EXH.2 ATT.2

BEGINNING ENDING AVG BAL NET

RATE BALANCE BALANCE AVERAGE OF DEFERRED

PROGRAM SCHEDULE 1/1/2018 12/31/2018 BALANCE TAXES RETURN

(1) (2) (3) (4) (5)

SOURCE: Exh.1-Att.2, Col. 2 Exh.2-Att.1, Col. 6 [(1)+(2)] / 2 (3) x 0.596375 (4) x 0.1104

Residential - EE&C D 36,238,668$ 38,833,681$ 37,536,174$ 22,385,636$ 2,471,374$

BALTIMORE GAS AND ELECTRIC COMPANY

COMPUTATION OF 2018 GAS PROGRAM EARNINGS

EXH. 2, ATT. 3

TOTAL

RATE RECOVERABLE

PROGRAM SCHEDULE AMORTIZATION RETURN IMBALANCE DOLLARS

(1) (2) (3) (4)

SOURCE: Exh.2-Att.1, Col. 5 Exh.2-Att.2, Col. 5 Exh.1-Att.3, Col. 9 (1) + (2) + (3)

Residential - EE&C D 15,168,507$ 2,471,374$ 1,633,726$ 19,273,607$

BALTIMORE GAS AND ELECTRIC COMPANY2018 GAS EFFICIENCY ELIGIBLE COSTS

Exhibit 3

2018

ANNUAL

TOTAL BILLING EFFICIENCY

RATE RECOVERABLE DETERMINANTS RATE

PROGRAM SCHEDULE COSTS (DTH) ($/THERM)

(1) (2) (3)

SOURCE: Exh.2-Att.3, Col. 4 (1) / [(2) x 10]

2018 Gas Efficiency Charge with SEM Costs

Residential - EE&C D 19,273,607$ 41,085,713 0.0469

BALTIMORE GAS AND ELECTRIC COMPANYCOMPUTATION OF 2018 GAS EFFICIENCY CHARGE