BALTIMORE, MD (Tuesday, July 28, 2026) - Today, Mayor Brandon M. Scott proposed a new conduit franchise fee for Baltimore Gas & Electric (BGE) and other entities that utilize the underground conduit system to begin on January 1, 2027. This updated fee will ensure adequate investment into the conduit system in the face of rising costs and the growing need for repairs, most recently observed in the underground fires that the City experienced in 2024 and 2025. Applying to all users beginning January 1, 2027, the new proposed rate will be $4.05 per linear foot and will be adjusted for inflation moving forward.
"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," said Mayor Brandon M. Scott. "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."
This new franchise fee will replace the 2023 agreement between the City and Baltimore Gas and Electric (BGE), the largest occupant of the City's conduit system. In 2023, the City and BGE entered into an agreement that replaced the traditional franchise fee by instead requiring BGE to make capital improvements to the City's conduit. BGE is on track to meet its obligation of making approximately $120 million in capital investments to the system by the end of 2026. All other conduit users continued to pay the City $2.20 per linear foot, a rate that has not increased since 2019. The City of Baltimore notified BGE in June that it would not renew the 2023 agreement for another three years.
While the 2023 agreement allowed for added capital improvements, evolving needs of the system and inflationary pressures have meant that the 2023 agreement, along with the franchise fees collected from the remaining users, no longer provides sufficient investment to maintain the conduit system. The new proposed rate is a reasonable update that reflects the need to make more proactive repairs to the system, the increased cost of construction, and the cost of daily operations.
In order to accomplish the necessary work, the Baltimore City Department of Transportation will reestablish several positions within the department dedicated to conduit maintenance and support.
"It is deeply important to me that companies like BGE contribute directly to Baltimore's renaissance, not just benefit from it," said Council President Zeke Cohen. "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."
"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," said City Comptroller Bill Henry. "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."
"The City built the underground conduit, and ever since, the City has had the authority to charge a reasonable rate to the users to enable the City to maintain the system," said Solicitor Ebony M. Thompson. "That is clear under both state and local law. Today's announcement follows many years of simply adjusting that rate to reflect the needs of the system and the costs for the City to meet those needs."
The City's 700 -mile conduit system is a network of underground ducts and manholes that the city constructed in the early 20th century to house electrical, telecommunications, and fiber optic cables that power the majority of the city. Since then, the city has maintained the conduit system through reactive repairs and capital improvement work.
"Adjusting the conduit lease rate is a necessary step to keep our infrastructure strong and sustainable," said Department of Transportation Director Veronica P. McBeth. "These funds allow us to strengthen the infrastructure that keeps neighborhoods connected, supports local businesses, and ensures reliable service for residents. By reinvesting in this system, we're building a safer, more resilient city- one where every community benefits from dependable, modern infrastructure."
The proposed agreement is expected to go before the City's Board of Estimates on August 5, 2026.