PEPCO, the Maryland electric utility company who provides power to just under a half million homes, will increase their price to compare electricity rates in June to 8.97 cents. The price to compare is the rate that customers, who have not shopped and selected an alternative energy company, pay for their generation supply and transmission service.
The increase comes at a time when the Maryland competitive electricity market is finally moving into a mature state. After stalled progress over the past few years thanks in part to local politicians trying to end Maryland electric choice, the market is speaking out as more suppliers are offering products and more customers are exercising their option to choose a competitive electricity company.
Consumers can save as much as 14% off of their PEPCO bill by choosing to buy their power from an alternative supplier. Despite the huge savings, only 21% of PEPCO residential customers have elected to shop for cheaper electricity. Many Maryland electricity consumers still do not fully understand energy choice and would rather pay higher prices with the companies they have come to know and trust.
One of the major misconceptions with Maryland energy choice is that by not switching suppliers you are showing loyalty to the incumbent electric utility such as PEPCO. The reality of the situation is not so straight forward. With Maryland electric choice, the local utility continues to deliver power to their customers, as well as manage the lines and wires and respond to power failures and emergencies, no matter which electric supplier is chosen. PEPCO and the other three major Maryland utilities are no longer in the business of offering competitive generation supply rates and only offer their default rates because they are forced to do so by the Maryland Public Service Commission.
PEPCO earns money from the distribution charges found on the electric bill, and those distribution charges remain the same no matter which electric supplier a consumer chooses. PEPCO will remain in business even if 100% of their customers shop for competitive power. This is simply because their profits and revenues are tied to the distribution charges, which remain regulated by the state.
Here is the current lowest rate in the PEPCO Maryland territory: