Restructuring Fact Sheet

On April 8, 1999, Maryland Governor Parris Glendening signed into law the Electric Customer Choice and Competition Act of 1999. As a result of this law, Maryland electric customers are now able to choose the supplier—or generator—of their electric power. The act includes several provisions sought by the state’s utilities and has special exceptions for cooperatives and municipal utilities.

This fact sheet presents some of the act’s highlights and how they affect SMECO.

Customer Choice Schedule:

All commercial and industrial customers of investor-owned utilities (IOUs) had the right to choose starting January 1, 2001. SMECO offered choice to its largest customers on January 1, 2001, with choice available to all of its customers on November 1, 2001.

Standard Offer Service:

Customers who cannot or do not want to switch electric suppliers will receive standard offer service. Also, if a supplier fails to deliver power, the standard offer service automatically takes over.

Co-ops and municipal utilities may remain standard offer service suppliers until they decide otherwise. On your SMECO bill, the standard offer service is the “price to compare” for electricity supply.

Protection for Low-Income Customers:

A Universal Service Program is available statewide for customers at or below 150 percent of the poverty level. The money goes to bill assistance, weatherization assistance, and to help pay bill arrearages. The PSC has oversight of the program, which is administered by the state Department of Human Resources.

Consumer Protections:

The act prohibits “slamming”—the switching of electric suppliers without customer consent—as well as fraud, deceptive practices, and unfair discrimination. The PSC, which will license all power suppliers, is authorized to punish suppliers for violations and can revoke a supplier’s license. Customer information cannot be disclosed without customer consent except for bill collection and credit rating purposes.

“Unbundling” of Bills:

Rates, charges, and services are separated, or unbundled, according to PSC guidelines. Customer bills show separate charges for energy, transmission and distribution, universal service program charges, customer charges, taxes, and other charges identified by the PSC. The PSC regulates how electric bills are prepared.

“Aggregation” of Customers:

Aggregation is the group purchase of electricity by customers. Customers may join a voluntary association to buy cheaper power as part of a large group. The act requires aggregators to be licensed by the PSC and allows entities such as community associations and non-profits to become aggregators. Counties and municipalities can become aggregators only if the PSC determines there is not enough competition.

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