Washington, D.C.
The District of Columbia Public Service Commission has reformed the district's electric market to give customers a chance to save money on their electric bills through choosing an alternate electric supplier. Customers at Pepco can shop for a cheaper electric supply rate.
Pepco sold its power plants to open the market to competition, and now only owns the transmission and distribution wires, while also providing "backstop" power to customers who do not shop for electricity. With the move to competition, Pepco has separated service into two parts:
- Regulated distribution of power, which is still only provided by Pepco, and
- Supply of the electric commodity, which is open to competition.
Customers who do not choose an alternate electric provider receive default supply from the utility, or Standard Offer Service (SOS). Default supply prices change once annually. Supply for default service is bought over a period of two-to-three years (depending on customer size), with the results of the supply procurements "laddered" and blended into a single price. The end result is that the default service price may contain a risk premium in it, and also does not change to reflect lower market prices except for the annual price reset. Choosing an alternative electric supplier allows customers to receive the benefit of falling prices faster.
Customers who choose an alternate energy provider still have their power delivered to them by Pepco, and contact Pepco for all outage reporting. Customers can choose to receive either a single bill from Pepco for their delivery service and energy supply service, or can receive two bills, one from each company.
