Maryland energy choice

For over a decade energy choice in Maryland has allowed consumers to shop for competitive priced energy contracts for their homes and businesses. While electricity choice participation and familiarity has increased drastically over the last few years, gas choice awareness in Maryland has lagged behind. Due to recent rising default prices in the state’s largest gas utility, BGE, gas choice awareness is poised to finally grow.

BGE, who is both Maryland’s largest electric and gas utility, delivers gas to over 626,000 residential customers and another 43,500 commercial and industrial. As of September 2017, data obtained from the Maryland Public Service Commission website reveals that only 136,000 BGE gas residential customers were active gas choice customers purchasing gas supply from an alternative supplier. Customers who have not elected to shop for competitive gas rates have the ability and option to do so at any time, unlike in other states where there is a limited shopping period each year.

The more than 78% of BGE gas customers who have not switched gas suppliers are paying the BGE gas price to compare. Price to compare prices are a variable rate that change each month and can be volatile leaving customers unable to properly manage their monthly energy expenses. For example, BGE reported that their gas price to compare in February of 2018 was $0.5068 per therm, a 22.44% increase in the February 2017 price to compare. In 2017 BGE gas customers saw a low of $0.3877 in March compared to a high of $0.5503 in May on the price to compare rate. The 42% price difference occurred in just a two month period.

Gas choice provides customers with the ability to lock in their price with a fixed gas rate contract. Competitive gas suppliers offering service to BGE customers will state the rate in therms and length of the fixed rate in their contract. While the rate offered can easily be compared to the BGE gas price to compare, it is important to remember that the gas price to compare changes each month. This is immensely different than the BGE electric price to compare which sometimes is fixed for up to eight months allowing customers to easily compare the savings that the competitive rate will yield. Gas choice is as much, if not more, about providing price security as it is about instant savings.

When choosing a competitive gas plan, BGE customers should confirm that the rate is in fact a fixed gas price. Otherwise, if it is not fixed, the customer is just swiping out one variable rate for another. Below are a number of fixed gas rate offers from gas suppliers who have been licensed to sell gas supply to BGE customers through the Maryland Public Service Commission.


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Maryland energy choice allows for consumers to shop for competitive electricity and natural gas rates offered by alternative suppliers. The utility companies in the state that customers have grown to become familiar with continue to function as their role as the utility for their specific service area; they continue to deliver power to their customers through the power and gas lines through regulated distribution charges. Until recently the Potomac Electric Power (PEPCO) service area in Maryland had been overlooked by many competitive suppliers as companies focused their marketing efforts on BG&E, the state’s largest utility, as well as other larger service areas in Pennsylvania and New Jersey. The combination of market maturity and volatile energy prices has changed that and put the PEPCO Maryland service area on the map of electricity suppliers looking to attract new customers.

As Maryland’s second largest electric utility, PEPCO provides power to over 550,000 total customers in the state. The residential customer pool in the area was over 500,000 at the end of 2014, giving competitive suppliers over a half million new customers to solicit. Competitive Maryland electricity companies have recently started to focus more attention on acquiring PEPCO customers due to the widening space between the standard offer service rate for electricity and the rate these companies are able to offer. Through Maryland electricity choice customers can shop for a competitive generation and transmission rate, also known as the electricity supply price. If a customer does not choose a competitive plan for their electricity supply than they pay a default rate through PEPCO called the standard offer service.

The standard offer service rate, or price to compare, recently went up due to market conditions in wholesale electricity. PEPCO oversees an auction process to determine the standard offer service price. After the auction for summer 2015 rates was completed, energy prices began to drop allowing competitive suppliers to buy power contracts on the wholesale market and start offering lower prices to PEPCO consumers. Now that competitive electricity suppliers are able to offer fixed rate contracts to PEPCO customers that are well below the PEPCO standard offer service rate, a true incentive exists for both suppliers and customers to participate in the Maryland electricity choice market.

That incentive, of course, is the ability for consumers to find cheaper PEPCO electricity rates and thus pay less money on their monthly electric bills. When a customer chooses a competitive price plan that rate simply replaces the PEPCO standard offer service rate, so the savings are simply and easy to understand. Current PEPCO rates offered by licensed electricity suppliers are shown below.


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Energy choice has been alive in the state of Maryland for almost a decade, but it is only now beginning to sustain a healthy heartbeat. Increased customer awareness concerning competitive power is largely centered around the recent BG&E rate hike announcement. Maryland electricity choice provides a way for BG&E consumers to avoid the rate hike.

Baltimore Gas & Electric (BG&E) recently increased their electricity supply default rate and stated that their rates will shoot up another 17% on June 1, 2013 just in time for the high electricity usage summer season. This has caused BG&E default paying customers to start shopping the market for more competitive electric rates. BG&E is the largest electric utility in Maryland and is responsible for providing default service for all Baltimore electricity users.

Default customers are those consumers who have not taken the time to compare electric rates in the competitive market. These customers pay the BG&E price to compare rate, a price that is regulated by the Maryland Public Service Commission and the benchmark for competitive energy companies to offer pricing. Competitive electric rates must contain everything that the BG&E price to compare contains, allowing BG&E customers to compare prices on an even playing field.


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