Maryland

Restructuring Overview  |  Public Benefits  |  Restructuring Resources  |  Consumer Protection

Electric
Overview

• 1999-2002: Under 1999 restructuring legislation, the transition to electric choice began July 1, 2000 for one-third of Maryland consumers and another one-third by July 1, 2001. Full retail competition was to begin on July 1, 2002, but the Maryland Public Service Commission accelerated restructuring implementation through settlements with all four of the state's investor-owned utilities and its two major cooperatives. Municipal utilities and two small co-ops have been excluded from a choice mandate. The electricity competition law mandated residential rate cuts ranging from 3% to 7.5%, with rate caps for four years.
• 2002: Governor Parris N. Glendening signed a bill in 2002 that requires utilities in the state to conduct a study that tracks generation and emissions as a result of restructuring the electricity market. If the study convinces the state Department of Environment that emissions levels are higher as a result of restructuring, it will consult with the PSC about requiring an air quality surcharge.
• January 2002: The Office of the People's Counsel of Maryland criticized the state's electric industry deregulation plan, claiming that it fails to produce competition. Since deregulation began 18 months before, according to the OPC report , only 2.6 percent of residential customers of utilities with Electric Choice programs switched suppliers. The report recommends that the General Assembly consider revising the Electric Choice program.
• December 2002: The PSC, Office of People's Counsel, utilities, energy suppliers, and Maryland Energy Administration agreed on a proposal that would require utilities to extend residential and commercial standard offer service past the 2004 expiration. Standard offer service would be available to smaller customers who do not choose an alternative electricity supplier: Baltimore Gas and Electric customers until 2010, Allegheny Power customers until 2012, and Pepco and Delmarva Power and Light customers until 2008. The PSC will hold a hearing on the matter early in 2003.
• May 2003: The PUC establishes rules for extending Standard Offer Service for four years when current rate caps expire in July 2004. The rules allow utilities to charge market prices for their electric service and to recover their verifiable and prudently incurred costs to procure electric supply.

Choice Status

• Customers of Maryland's major utilities and cooperatives have access to electric choice. As of May 2003, 70,956 of 1,870,264 residential customers (about 3.8%) were enrolled with alternative electric suppliers.

Natural Gas
Overview

• More than 80% of Maryland's residential customers may select their gas supplier under comprehensive programs in place for the state's three largest local distribution companies.

Choice Status

• As of March 2003, non-utility suppliers served 170,896 residential customers, or 17.6% of the 970,681 residential customers in Baltimore Gas and Electric, Columbia Gas Maryland and Washington Gas territories. Residential customers of Chesapeake Utilities and NUI Elkton Gas are not eligible for supplier choice.

Choice education
Electric Choice Information Center
1-800-800-4491
www.md-electric-info.com/
This state website explains how electric choice works in Maryland and includes a list of suppliers offering service to residential customers, along with current rates.

Suppliers
Office of the Maryland Attorney General
www.oag.state.md.us/energy/index.htm

Public Benefits

Maryland's restructuring law created a continuing and nonlapsing electric universal service fund. In July 2000, a statewide Electric Universal Service Program (EUSP) began, funded at $34 million annually and administered by the Department of Human Resources through the Maryland Energy Assistance Program. Since mid-2000, the majority of the fund has been spent on low-income electric bill payment and arrearage forgiveness, with about $3.5 million set aside for low-income weatherization. After three years, EUSP funding levels and will be re-evaluated. (Click here for details on the state’s low-income energy and general residential energy programs.)

Aggregation - buying coops

• A county or municipal corporation may not act as an aggregator unless the Public Service Commission determines there is not sufficient competition within the boundaries of the county or municipal corporation.
• The definition of electricity supplier includes an aggregator. The definition of aggregator excludes an entity that purchases electricity for its own use or for the use of its affiliates, a municipal electric utility serving only in its distribution territory, and a combination of governmental units that purchases electricity for their own use.
• All aggregators must be licensed by the PSC.

State Restructuring Resources

Utility Regulatory Commission
Maryland Public Service Commission
1-800-492-0474
www.psc.state.md.us/psc/home.htm

Consumer advocate
Office of the Attorney General
1-888-743-0023
www.oag.state.md.us/Consumer/

Maryland Office of People's Counsel
www.opc.state.md.us/

Consumer Protection

• Utilities cannot disconnect residential service between November 1 and March 31 unless they can prove that disconnection will not endanger the health of any member of the customer’s household. If customers or someone in the household have a serious medical condition, they may be eligible for 30 additional days to make full payment and/or obtain payment arrangements.
• Low-income residential customers who qualify for federal energy assistance are protected from utility termination year-round if they remain current on a monthly payment plan. Households with income at or below 50 percent of the federal poverty guidelines are protected from utility termination from November though March if they pay a monthly average of $40.
• If termination is due to nonpayment of a bill, gas and electric companies must give customers 14 days written notice. If the company is terminating customer service because it suspects fraud, customers have the right to receive 7 days written notice. However, if the company is terminating service because of an unsafe condition within a customer's home, it does not have to give any written notice.

Customer service

• After customers choose a supplier, the supplier must send them information on notice of enrollment, description of billing options, due date and mailing address for payments, information about customer service and dispute process and notice of 10-day cancellation right. Contracts must contain all terms and conditions. Information about consumer rights must be provided within 30 days of the contract date. If contract has a renewal clause, customers must be sent a 60-day notice of the renewal.

Deposits/fees

• A utility may request a security deposit from customers if they paid their bill late on more than two occasions in the preceding 12 months; their service was disconnected for nonpayment; they failed to pay a bill by the due date on a termination notice; or they are new customers of the utility and are unable to demonstrate a good credit history. The amount of the deposit will be no less than $5.00 or more than two-twelfths of the estimated charges for service for the ensuing 12 months. In other words, the deposit will normally equal two monthly bills.
• Customers are entitled to request payment installments for any deposit in excess of $50. For residential customers, the utility must allow a deposit between $50 and $150 to be paid in installments over a period of 8 weeks. Deposits over $150 can be paid in installments over a period of 12 weeks.
• Customers are entitled to receive interest on their paid deposits. The amount of interest will vary yearly. Customers may request refund of the deposit and interest after 12 months of consistently good paying habits. If they do not pay their bill on time, the utility may retain the deposit until customers either pay bills on time for 12 consecutive months or until they close their account. Once an account is terminated, the utility can first apply the deposit (plus interest) to any final bills.

Right to cancel

• Customers may cancel within 10 days of signing with a supplier.

Billing and collections

• Customers will either receive a consolidated bill from either the supplier or the distribution utility, or two separate bills, one from the supplier, and one from the distribution utility.

Supplier licensing

• Suppliers must post an initial bond of $50,000. Within six months after posting, the suppliers must give the PSC an audited certification of its deposits and prepayments and a bond amount certified by the PSC Accounting Division. Suppliers must comply with power pool, control area, regional or system transmission operator, and/or ISO standards and requirements. Suppliers cannot disclose or resell customer data provided by any Maryland electric company. Suppliers must include notice that they are licensed by the PSC in their marketing materials.

Slamming

• Slamming is prohibited. The PSC requires a signature on all mailed, newspaper and door-to-door contracts. All competitive suppliers who contract using the Internet must ensure that the contracts are made by the persons claiming to make them. Telephone contracts are only allowed if all contract terms and conditions are disclosed to the customer over the phone, if the customer’s contract agreement is verified by an independent third party, if the customer receives a complete written contract two days from the initial agreement with the supplier, and if the consumer has a 10 day right of rescission from the date of the receipt of the written contract.

Telemarketing

• Telemarketers cannot call customers who ask them to take their name off the telemarketing list.

Discrimination/redlining

• Electricity suppliers may not discriminate based on race, color, creed, national origin, sex or any other reason as stated by law.

Disclosure

• Distribution utilities and competitive suppliers must provide customers with a uniform set of information on fuel mix and emissions. When actual data is unavailable, a regional average may be used. Once the information is available, labels have to include comparison of emissions and fuel mix to the regional average. Labels must be provided to customers every six months.

Advertising/marketing/trade practices

• An electricity supplier may not engage in marketing, advertising or trade practices that are unfair, false, misleading or deceptive.
• Marketing advertisements must include, in a clear and conspicuous position, and in plain and easy to understand language, precise rates for services offered, and must state that the rate shown is for generation services only and that the total electric rate will be higher. If an offer compares the competitive supplier’s price to the rate the customer will pay for standard offer service, this rate must be based on the official "price-to-compare" (i.e. the price per kWh for a typical heating and non-heating customer in a distribution utility service territory).
• Advertisements must also include the time of day the advertised rate will be in effect, the minimum contract duration necessary to obtain the advertised rate, any fees and charges, and the supplier’s Maryland license number.

Privacy

• Customer information cannot be released without a customer’s consent, except for bill collection and credit rating purposes. Customer lists containing names, addresses, and telephone numbers of customers may be sold to competitive suppliers. If a distribution utility intends to release such a list, it must inform its customers, and advise customers of their opportunity to prevent disclosure of their identifying information.