The Competitive Marketplace

The ability to purchase power at fixed, below-market (frozen) rates has expired for industrial, commercial, and now for a majority of Maryland’s residential customers. Residential and commercial customers may continue to purchase power supplies through their distribution utilities at a fixed, market-based rate or may opt to purchase from competitive suppliers. Industrial customers may also continue to purchase power through the distribution utility, but only at hourly market rates. These customers may also purchase power at either fixed or variable rates from competitive suppliers.

In Maryland’s non-residential markets where rate freezes have already expired, suppliers can more effectively compete against the market-based rates offered by the distribution utilities and are actively soliciting new customers in Maryland’s non-residential markets. As of June 2006, fourteen competitive suppliers actively solicit industrial customers; six solicit commercial customers; six solicit the governmental and institutional sector. Under frozen residential rates, only two competitive suppliers were actively soliciting the State’s residential customers.

Although competitive suppliers serve a small number of commercial and industrial customers (roughly 16.4 percent), competitive suppliers target the larger commercial and industrial customers and, consequently, serve approximately 63 percent of the State’s non-residential load. Competitive suppliers serve a small minority of Maryland residential customers both on the basis of total number of customers served (1.4 percent) and load (1.8 percent). With the expiration of frozen residential rates, competitive suppliers have been more aggressively pursuing residential customers and can expect to expand their residential customer base compared to early 2006 levels. Delmarva Power and Pepco residential customers had the option of moving to market rates on June 1, 2006 or moving by phases to market rates through June 1, 2007. BGE residential customers are automatically enrolled in a phased increase, with full market rates starting January 1, 2008.

Percent of Customers Served By Competitive Suppliers

	Customers Served by Competitive Suppliers	Total Customer Accounts	Percent of Customers Served by Competitive Suppliers	Percent of Customers Supplied by Local Utilities
Residential	27,376	1,943,491	1.4%	98.6%
Non-Residential	37,678	229,549	16.4%	83.6%
Total	65,054	2,173,040	3.0%	97.0%

Source: Maryland PSC, Electric Choice Enrollment Monthly Report, June 2006

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