Maryland Residential Electricity Choice

Maryland is a unique restructured electricity market.  Real options exist for Maryland consumers, and significant savings opportunities are available.  Residential Baltimore Gas & Electric (BGE) customers can reduce their electricity generation bill by 14% by switching to a competitive supplier.  However, only 72,000 out of 5 million people in the state have chosen an alternative supplier.

How has Maryland reached this point in time where so much opportunity exists in a competitive market, yet so few people have participated?

The answer to the question is a combination of bad timing with the market and inpatient government officials.  Maryland, like other states who have deregulated their electricity markets, set capped rates for all of their customers when the restructuring act was passed.  This caused Maryland electric customers to enjoy low rates from 2000-2007 while energy prices were constantly rising.  In 2007, when these capped prices expired, many Maryland residents saw their electric rates shoot up by 50%.  The 50% increase was a result of Maryland Utilities pre-buying their power requirements for default service customers (those customers who did not choose a competitive supplier).  This is where the bad timing came in.  Electricity prices were at an all time high during the 2007-2008 period.  This made it difficult for alternative suppliers to offer competitive rates.

To make things worse, state officials started to call for the state to re-regulate the market stating that deregulation was not working.  Governor O’Malley backed the call for re-regulation which in turn kept electric providers from entering the market.  There is a significant investment required for electric providers to enter a new market or for a new entity to become a licensed retial electric provider.  It doesn’t make sense for a business to enter a trade that is not supported by the local government.

Fast forward to 2010 and Maryland customers are finally starting to see the benefits of electricity deregulation.  The call for re-regulation was shot down, and wholesale electricity rates have come way down from their highs.  In addition, default customers are paying rates that in many cases were established in 2008 during a time of high energy prices.  This is why residents are able to see savings of 14% on their electric bill versus their default price to compare rates.
Current BG&E Competitive Rates (Updated Daily):


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