|Vol69-02 February 2019|
Know the facts if you are considering switching to an alternate supplier
Two studies call for improving consumer protections
Recently, two reports issued by the Maryland Office of People’s Counsel (OPC) and the Abell Foundation expressed concern about Maryland’s third-party energy supply market. They found that many customers who purchase energy through an alternate energy supplier in total are overpaying by millions of dollars. In addition, they found that a high percentage of customers who purchase energy from an alternate supplier are low income customers who receive assistance. In many cases, they are charged more for energy by alternate energy suppliers than they would normally pay to their local utility.
“Alternate energy suppliers” are able to sell energy to SMECO members at rates that are not regulated by the Maryland Public Service Commission. SMECO is concerned that not enough is being done to protect consumers from high rates and deceptive marketing tactics, and we will be working with our state legislators during the 2019 Maryland General Assembly session to help establish some reforms that will discourage predatory sales practices.
Consumers overspend millions of dollars
According to the OPC report, “Maryland’s households are paying approximately $54.9 million more for electricity and gas than if they had purchased energy from their utilities.” When Maryland deregulated the energy market 20 years ago, alternate energy suppliers were expected to offer rates that were competitive with the electric utilities’ rates. But during 2018, the amount that SMECO members paid to alternate energy suppliers was nearly $2.1 million higher than what those same members would have paid if they had purchased energy through SMECO’s standard offer service (SOS). With an average of 5,120 members purchasing energy from alternate suppliers, that’s about $415 per account.
How does your cost compare?
SMECO residential members who purchase energy through an alternate supplier will have information printed on their bill that calculates how much they saved—or how much they overpaid—in comparison to SMECO’s residential SOS energy rate. (Personalized cost information is printed on the Alternate Supplier page of a residential bill under “Comparing Costs.”)
Maryland OPC offers tips
In an interview on November 26, 2018, Paula Carmody, the People’s Counsel, made the following points (edited for brevity): We see reliance on door-to-door marketing and that is a concern for us. We also see they are targeting neighborhoods that are low income. People are knocking on doors saying “We’re going to save you money.”
Co-ops work for members, not for profits
Because we are owned by our customers, every dollar that you pay to SMECO goes into purchasing energy, constructing power lines and substations, or running the co-op. At the end of the year after expenses are paid, any money that is left over goes toward your Capital Credits. Later, Capital Credits may be refunded as bill credits, checks, or payments to estates.
If you have questions about customer choice, alternate energy suppliers, or any billing related matters, call SMECO’s customer care center at 1-888-440-3311. We’re open 24 hours a day, 7 days a week.
Know the terms
Before entering into a contract with a supplier, be sure you understand the terms.