Maryland Comptroller Brooke E. Lierman is calling on the state’s electric utilities to pass more than $250 million in tax refunds directly to their customers, following a July ruling by the Supreme Court of Maryland that reshapes how the state taxes the equipment that keeps the power grid running.
The case, Comptroller of Maryland v. The Potomac Edison Company, centered on whether transmission and distribution equipment — the poles, wires and substations utilities use to move electricity from power plants to homes — qualifies as a “production activity” under Maryland’s manufacturing sales tax exemption. In a majority opinion authored by Justice Steven Gould, the state’s highest court sided with Potomac Edison, finding that the equipment does qualify, entitling the company and other Maryland utilities to refunds of sales and use taxes paid on that equipment, plus interest.
The Office of the Comptroller expects to issue more than $250 million in refunds as a result, according to Maryland Matters, which reported the state’s total payout, including interest, at roughly $280 million. Of that, Exelon’s three Maryland utilities are expected to receive a combined $160 million: BGE ($110 million), Pepco ($30 million) and Delmarva Power ($20 million), with the remainder going to Potomac Edison and other affected utilities.
