Maryland Will Start Automatic Utility Discounts Pegged to About 6% of Household Income on Jan. 1 for Families Getting Energy Grants

Maryland households that receive a state energy assistance grant will be signed up automatically for a new monthly utility discount when it launches on Jan. 1, 2027. The program, called the Residential Customer Assistance Program, or R-CAP, uses tiered discounts meant to bring eligible households’ utility bills down to about 6% of their income, according to a presentation to the Office of Home Energy Programs advisory board on Oct. 8.

No separate application is needed. Utility accounts that receive an OHEP energy assistance grant will be enrolled for 18 months.

A discount built around income, not a flat credit

R-CAP works differently from an OHEP grant. OHEP’s presentation describes it as monthly tiered discounts, applied to the utility bill itself month after month.

The Maryland Public Service Commission approved the framework in Order No. 92190 on Feb. 12, 2026, in a case known as PC 59. The order states the goal as helping limited-income customers “achieve an energy burden of approximately six percent,” meaning energy costs would take up no more than about 6% of a household’s income.

The discounts aren’t one-size-fits-all. Under the order, customers are grouped by poverty level and heating source, and each group’s average discount is calculated from bills, OHEP benefits and income.

The Commission did not lock in the 6% figure permanently. It said it will revisit the target when utilities file updated proposals and as program costs become clearer.

“A significant step towards eventually easing the energy burden on Maryland families,” is how PSC Chair Kumar P. Barve described the mechanism in the Commission’s announcement.

Who gets it, and for how long

Eligibility runs through OHEP, part of the Maryland Department of Human Services. The PSC order ties the discount to OHEP Poverty Level 6 or lower, which it describes as roughly 200% of the federal poverty level.

According to OHEP’s October presentation, utility accounts receiving OHEP energy assistance grants will be automatically enrolled for 18 months, and continued benefits depend on staying enrolled with OHEP. The office said it had already sent its fiscal 2026 eligibility file to partnering utilities to support the automatic sign-up.

The Commission’s announcement said eligible customers would receive the bill credit automatically, with no application, and that OHEP would help utilities identify who qualifies.

That makes the OHEP application the key step. The state expanded those grants this year. Gov. Wes Moore’s office said in a July 2 announcement that OHEP benefits would rise by up to 32%, with expanded eligibility and a simpler application, and that about 200,000 households would receive increased help this year.

Which utilities are covered

The order applies across Maryland’s major regulated utilities, including BGE, Pepco, Delmarva Power, Potomac Edison, Washington Gas, SMECO, Columbia Gas and UGI. Most will apply the discount as a percentage off the bill. SMECO will use a flat bill credit instead, the order says.

Smaller utilities are preparing too. Chesapeake Utilities says on its website that it is targeting implementation by Jan. 1, 2027, with bill credits designed so eligible households spend no more than 6% of their income on energy costs.

BGE, Delmarva Power and Pepco said in a joint statement after the order that they were reviewing it and were “committed to this work,” FOX45 reported.

Who pays for it

The discount is funded by other customers. Under Order No. 92190, costs are recovered through a fixed-rate rider on the distribution portion of non-participating customers’ bills. Customers who receive the discount don’t pay the rider.

The Commission put off a decision on a cap for that surcharge, and how the cost is split between residential and business customers is still open. Utilities were told to propose their own allocations. Chesapeake Utilities says a final cost-allocation decision is expected later this year.

The order also leaves past-due balances out of the benefit calculation. It does not create a statewide program to forgive arrears.

Getting into OHEP before January

Households that want the discount when it starts need an OHEP grant on their account. OHEP takes applications through the Maryland Department of Human Services, and the governor’s office said this year’s application is simpler than before.

The grants themselves are larger this year. According to the governor’s office, the new benefit structure is designed to offset up to 55% of annual heating costs and up to 47% of electric bills for vulnerable households. A 2026 law, House Bill 1532, also extended state-funded electric bill help to some households that don’t qualify for federal energy assistance.

The PSC flagged one gap in its order: customers who are eligible but not enrolled with OHEP. It asked the PC 59 work group to find ways to reach them, which means households that have never applied for energy assistance won’t see the discount until they do.

The site has covered other winter bill programs, including Pennsylvania’s LIHEAP crisis grants and New Jersey’s LIHEAP heating aid.

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This article was produced with AI assistance and edited for accuracy against the sources linked above.

Image: Baltimore Heritage from Baltimore, MD, USA – CC0/Wikimedia Commons