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by Mark Reutter7:00 amJan 26, 20230

EXCLUSIVE: BGE is quietly pushing to control Baltimore’s underground conduit system

“The city loses. BGE would have total control,” says former Mayor Jack Young of the arrangement the company has been crafting with the Scott administration

Above: A new conduit line being installed on Greenmount Avenue in 2019. (Commercial Utilities LLC)

Baltimore Gas & Electric is working with the Scott administration to find a way to circumvent voters’ wishes and take control of the publicly owned conduit system.

A draft agreement – submitted to Scott officials by BGE’s Chief Financial Officer David Vahos on January 13 – would terminate the company’s $28 million-a-year rental payments to the city in return for making roughly the same dollar amount of capital improvements per year.

Critically, the plan would shift decision-making authority from the city Department of Transportation to BGE, which currently uses 76% of the system’s space for its electric service.

Last November, city voters overwhelmingly approved a charter amendment blocking “the sale, transfer or franchising” of the 700-mile network of conduit pipes that carry electric, telephone, fiber-optic and traffic-signal cables under city streets.

While the cable network would officially remain in city hands, the draft agreement gives BGE “sole discretion” to decide what capital projects to pursue, effective the day the agreement is approved by the Board of Estimates.

Such unilateral control could jeopardize the city’s stated goal of using the conduits to provide broadband access to all city residents.

Six million dollars of American Rescue Plan funds were set aside to route fiber to 23 recreation centers and create 100 Wi-Fi hot spots.

The draft agreement does not address whether BGE would allow this and other community projects to proceed.

DOCUMENTS: Charter amendment blocking sale of conduits, and BGE’s proposal to end its franchise fees to the city (1/27/23)

What’s more, the draft contract releases the company from all MBE and WBE requirements.

The current practice is for 36% participation by minority and women-owned businesses in conduit construction.

Denounced by Ex-Mayor

The nine-page document by BGE comes in the form of an “amendment” to a 2016 settlement that ended a BGE lawsuit after the city increased annual conduit fees.

Former Mayor Bernard C. “Jack” Young – who approved the 2016 pact as then-city council president – took the unusual step of publicly criticizing the contract revision, calling it a raw deal for Baltimore residents.

“The city loses. We would have no control. BGE would have total control,” Young said in an interview yesterday with The Brew. “The whole thing stinks – there’s something really rotten here.”

”The whole thing stinks – there’s something really rotten here”  – Ex-Mayor Jack Young.

“They can do whatever they want, and they can do it without telling us,” Young said, referring to BGE. “We get nothing out of this. Zero.”

Especially concerning, he said, is that the changes are being proposed in spite of the passage of a charter amendment that was explicitly written to keep the conduit system under public control.

“Why would we do this when the people of Baltimore said they don’t want us to? Specifically, the voters said, the city should not sell off its conduits,” he continued.

Young led the effort in the City Council to place the conduit charter amendment before voters.

Jack Young, addresses reporters on his first day as Baltiomre's ex officio mayor. (J.M. Giordano)

Jack Young addresses reporters on his first day as Baltimore’s mayor in 2019. (J.M. Giordano)

Scott Shifts

After Young became mayor, his successor as council president, Brandon Scott, pursued the same course.

But as mayor, Scott proposed last October to appoint a consultant, FMI Capital Investors, to explore options for restructuring and potentially selling the conduits.

Scott explained his shifting position by saying the network was losing $7 million a year, a figure that a knowledgeable city official told The Brew was wildly exaggerated.

The $50,000 contract was deferred at the request of City Council President Nick Mosby, only to reappear after the November election.

The contract was approved 3-2 by Scott’s designee, Chief Administrative Officer Chris Shorter, and Scott’s two appointees – City Solicitor Jim Shea and deputy Public Works Director Richard Luna – over the objections of Mosby and Comptroller Bill Henry.

Brandon Scott says he is careful to comply with city ethics rules and votes only for the best interests of the city. (mayor.baltimorecity.com)

Brandon Scott is midway through his mayoral term. (mayor.baltimorecity.com)

“BGE can’t just pay”

Saying the conduit system was rapidly aging, Assistant Solicitor Hilary Ruley told the Board of Estimates that “the biggest user, BGE, can’t just pay whatever we throw out.”

She said the city was looking at FMI  to “come up with some arrangement that it can find to help us monetize and better maintain the conduits – something similar to what other cities do.”

Under the January 13 draft agreement obtained by The Brew, the city would receive $1 million a year from BGE to inspect and maintain the network, and the company would spend “up to $124 million in capital improvements” over the next four years.

The amended contract would then automatically renew for three-year periods unless the city gave a nine-month advance notice.

Campaign Contributions

Once a year, the city could recommend potential capital improvements to BGE, the revised language says.

But the electric company would have “sole discretion” and the final say in what capital improvements would be undertaken.

The firm could also perform any maintenance function “in an emergency situation,” and “the City shall not hold BGE liable for any damages.”

On January 10, 2023, the BGE Political Action Committee gave $2,500 to the People For Brandon M. Scott campaign committee, State Elections Board records show.

On January 11, 2022, Scott’s committee received $1,000 from Calvin Butler, chairman of BGE who also serves as president and CEO of Exelon, BGE’s parent corporation.

Fern Shen contributed to this story. To reach a reporter: editors@baltimorebrew.com.

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