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 can choose to receive their electricity supply from their utility, or an alternate electric provider.
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.
The District of Columbia reformed its natural gas industry to offer all customers a chance to shop for lower natural gas rates. Customers can choose a different company to supply them with their gas supply. Customers choosing an alternate gas supplier will still have their gas supply delivered by the local utility, but customers will be buying their gas supply from a new company.
A customer's natural gas bill has been separated into two parts:
- Regulated distribution of gas, which is still only provided by the utility, and
- Supply of the gas commodity, which is open to competition.
Customers can choose to receive their gas supply from their utility, or an alternate gas provider.
If customers do not shop for an alternate gas supplier, they receive default sales service from their utility.
Under default sales service, customers pay a supply charge called the Purchased Gas Charge which can vary as often as monthly. Customers can avoid wild monthly swings in the gas supply charge by contracting with an alternative gas supplier.
No matter who you choose to buy energy from, your local utility will continue to deliver your gas and respond to service interruptions and outages. You will still pay your utility for these services. Depending on your area, you can choose to receive a single bill from your utility listing your utility delivery charges and supplier commodity charges, or separate bills from the utility and alternate energy provider.
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