Did You Know

New Report Shows Competition in Maryland is Progressing and Likely to Expand

The Maryland Public Service Commission (PSC) recently issued a white paper, titled “Status Report on Electricity Procurement and Restructuring in Maryland,” which proclaimed that the result of the state’s first wholesale auction for retail standard offer service (SOS) was a success. The report also shows considerable increases in the number of customers selecting competitive retailers since the expiration of rate caps in 2004.

The PSC said that it was pleased with the result of the first SOS auction since the “price increases for electricity were lower than what would have been expected under the former regulatory regime.” The commission’s report went on to point out that the increases in electricity prices “were less than the consumer price index increases for all goods and services and much less than the increases for fuels and utilities, and natural gas consumer price index increases.”

The report found extensive movement from large commercial and industrial customers to alternative suppliers. Although competition has been slower to develop for residential and small commercial customers, “load percentages are beginning to reflect a sizable volume of business now served by competitive retail suppliers.” The report also noted that more than 40 percent of all commercial and industrial load and 22 percent of all eligible load (including residential demand) is now served by competitive suppliers.

The report highlights accomplishments and discusses the complex issues the commission has worked through since electric restructuring was initiated in Maryland by the Electric Customer Choice and Competition Act of 1999. The commission maintains it is “proactively working with [the Federal Energy Regulatory Commission and the PJM Interconnection] in evaluating the wholesale market structure and market rules to ensure that Maryland attracts adequate investment to maintain reliability in the restructured market.”

In the report, the PSC maintained a commitment to identifying and removing unnecessary barriers to competition and noted that the commission is currently overseeing a second round of competitive bids for SOS supply for the period beginning June 1, 2005. The report concluded that retail competition in Maryland is progressing well for larger commercial and industrial customers, and that as retail suppliers achieve success and build a base in Maryland, marketing is likely to expand to smaller commercial and industrial as well as residential customers.