Energy Choice Provides Savings in PEPCO Maryland
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.
