Reform Bills May Hurt Maryland Deregulated Energy Market

The Maryland Senate passed market reforms that could may increase your utility bills. Learn what changes could cost you more each month.

Will Reform Bills Alter MD Energy Market?

Reform bills by MD lawmakers may do more to kill off the deregulated energy market. Find out how they may wind up making your electricity cost more.
Maryland’s well-intended energy reform bills might be throwing the baby out with the bathwater. Learn what’s in them that might end deregulated energy and raise your monthly utility bills..

The energy choice market offers answers to high monthly bills. But bad actors in the industry have harmed consumers with electricity rate scams. Because of this, Maryland lawmakers introduced reform bills that intend to protect consumers. But energy suppliers warn this could end energy choice. So let’s talk about how the reform bills could change Maryland deregulated energy.

What’s In The Market Reform Bills?

Recently, the Retail Energy Reform Bill (SB0001), passed the state senate and is on its way to the House. The bill aims to stop abuses by some energy marketers by reforming retail electricity for Maryland residents. Here are some of the most important parts of the bill.

  • Companies cannot price non-green plans above the 12-month SOS rate average.
  • Green plans may go above this average with MD PSC approval.
  • Electricity rate plan lengths may not exceed 12 months.
  • The bill bans most variable rate plans.
  • Retail companies must only use salespersons licensed by the state.

Finally, the bills would remove the use of purchase of receivables (POR). POR makes the local utility buy the electricity supplier’s energy supply costs. That is, what customers owe their supplier. However, these costs include bad credit customers and those who can’t pay high bills. The POR system has been used since 2010. So changing the system now to one where the utility collects payments for suppliers would re-wire the whole retail market. And those costs would likely trickle down to consumers.

Reform Bills Could Hurt Maryland Energy

First, the 12 month restriction on energy plans removes other options for consumers. This includes cheap short-term fixed rates and the chance for customers to lock in cheap rates for 24-36 months.

Second, as a Baltimore Sun piece states, capping prices with a 12 month SOS average could prohibit customers from shopping. Keep in mind that SOS rates change twice a year and responds to the volatile energy market. Limiting plans could also hurt green energy, since new projects are financed by long term purchase agreements.

How Maryland Energy Industry Reacts

As you can imagine, energy retailers are not happy about the bill. In fact, 10 retail suppliers published a letter to request a meeting with Governor Moore to present their case. Their letter says that the bill goes against the state’s climate goals. It also argues that the bill goes against the needs of energy shoppers. Lastly, it says the bill restrictions will drive energy supplier from the state. And that would kill Maryland’s deregulated energy market.

Future Of Maryland Deregulated Energy

SB0001 is currently on its way to the house. True, the bill may not become a law. However, there are legitimate concerns for Maryland energy shoppers that a better conceived bill could better address. The team at will keep an eye on this story as it develops. For now, however, you can also shop here for the cheapest electricity rates in town.

Leave a Reply

Your email address will not be published. Required fields are marked *