Before energy deregulation, public utility companies had monopolistic control over the production, processing, and distribution of energy. Consumers, on the other hand, had no control.
This lack of competition provided no incentive for utility companies to improve efficiency, price, or service.
The removal of legal barriers for economic competition allowed new companies to enter the energy market.
A Brief Explanation of Energy Deregulation
Energy deregulation affects the first step of the process for getting energy to your home–generation or exploitation. During this stage, energy is generated from a variety of renewable and non-renewable sources and sold to retail suppliers.
This is the step open to competition.
For gas customers, selling, supplying, or marketing can take place further along in the process.
The second and third steps–transmission and distribution–are still taken care of by your utility and is regulated, regardless of the provider.
For electricity, transmission refers to sending power from the generating plant, via high voltage lines. Distribution refers to transferring power from a distribution network to your home, via wires.
For natural gas customers, transmission refers to gas transportation, via pipelines, normally above ground and under high pressure. Distribution involves getting natural gas to your home through underground pipes.
You are then billed for your energy use. This completes the process
Energy deregulation in Maryland has made it possible for consumers to buy their energy supply from an energy company they choose. The utility company, because of deregulation, no longer controls all aspects of energy supply and delivery.
The Electric Customer Choice and Competition Act of 1999 required utilities in Maryland to sell or transfer their generating facilities to competitive companies.
Since 2000, residents have been able to buy electricity from licensed retail energy suppliers.
Deregulation also applies to natural gas, allowing commercial, industrial, and residential customers to buy natural gas from a supplier, instead of a utility.
Timeline of Energy Deregulation in Maryland
- 1997 – In April 1997, Senate Bill 851 created a task force to study the potential effects of energy restructuring. Eight months later, the Maryland Public Service Commission (PSC) established a framework for restructuring the electric power industry.
- 1999 – The Maryland House and Senate pass the Maryland Customer Choice and Competition Act. The law requires utilities to divest themselves of power generating assets. The law also includes a rate reduction and a rate freeze.
- July 2000 – 1/3 of Maryland’s electric consumers gain the ability to choose their power supplier.
- July 2001 – An additional 1/3 of Maryland’s electric consumers gain the ability to choose their power supplier.
- July 2002 – All Maryland’s electric consumers gain the ability to choose their power supplier.
- 2006 – The rate freeze established by the 1999 law ends. Electricity rates skyrocket.
- 2009 – The Maryland State Finance Committee introduces the Maryland Electricity Reregulation and Energy Independence Act of 2009. The Maryland House of Representatives votes almost unanimously to defeat the legislation.
- 2010 – Present – Nearly 25% of eligible participants have switched to an alternative energy supplier.
Switching Energy Suppliers
Switching is simple. It can be done completely online once you’ve chosen an electric or gas supplier. There is no interruption of service or fees for switching.
Gas and electricity suppliers must meet standards and must be licensed by the state in order to supply power.
The Maryland Public Service Commission does not approve supplier prices or rate offers. The commission does, however, monitor unfair or deceptive marketing practices.
The DeregulatedEnergy.Com directory contains the information you need for energy choices in Maryland. The directory includes the following.
- The names of retail energy providers in the state
- The regulatory office overseeing utilities
- The regional transmission organization or independent system operator for gas
- The FERC region for Maryland