Strengthen Maryland’s Energy Supplier Market, Not Stifle It

Ron Cerniglia

In recent weeks, two reports have been released about the retail energy supplier industry in Maryland.

These reports contain a number of inaccuracies and fail to paint the true picture of energy choice in Maryland. Both reports are based on a false comparison between utilities and competitive suppliers, as opposed to taking a more comprehensive look at the many benefits to all residential, commercial, and industrial consumers that have been created since the competitive retail energy market opened in Maryland nearly 20 years ago.

By focusing almost exclusively on pricing, both studies — one conducted by the Abell Foundation and the other for the Maryland Office of People’s Counsel — fall short of providing a more robust assessment of the benefits of the competitive market.

Both studies failed to take a broader look at the many reasons why consumers may choose one product over another, given the types of renewable and other value-added products that are offered by various suppliers to differentiate themselves from their competitors. Price is only one factor among many that consumers consider when choosing their energy supplier.

For example, at Direct Energy, we offer competitive pricing and the ability for customers to lock-in their energy prices for up to three years, and we have no early termination fees. In addition to price stability, we offer customers a renewable product and a product that includes a free Amazon Echo Dot, where they can access their billing information, change plans if they want to, and enjoy all of the other benefits of the voice-controlled intelligent personal assistant service.

As a business where our customers can wake up every day and choose another provider, we are successful only so long as our customers are satisfied that they are receiving the best possible service. We agree with the authors of the recent reports that price and clarity in the way price comparisons are presented to consumers is of paramount importance. We look forward to continuing to work with the Public Service Commission to improve the quality of the information about utility rate structures – called Standard Offer Service or default service – and other factors that are available to consumers who are making decisions about their energy suppliers.

We also recognize that there are a few suppliers that may be engaging in aggressive or deceptive marketing practices. The bad actors in any industry should be weeded out, but at the same time, the vast majority of competitive suppliers that are providing choice and value should not be lumped together with the unscrupulous few.

Although the two recent reports suggest energy prices have increased, data from the U.S. Energy Information Administration shows that Maryland residential customers’ electric bills have actually remained fairly static for more than a decade. The data shows that prices in Maryland have actually decreased overall by 9.7 percent since 2008, when adjusting for inflation. Conversely over that same time, prices have increased by 9.3 percent in states that have remained under a monopoly utility system with no competition.

As we look at the market today, we continue to see savings available to consumers who shop. As of Dec. 30, there were 36 fixed price competitive offers available to BGE residential customers that were below BGE’s price to compare. That means in December alone, there were tens of millions of dollars in potential savings available to Maryland consumers. These fixed price contracts provide savings today and a predictable energy price for the life of that contract while BGE’s price changes every six months.

All of us can certainly agree that there is always room for improvement in emerging competitive retail energy markets. The industry is still relatively young but is already yielding significant benefits for consumers in Maryland and around the nation.

Direct Energy actively supports strong consumer protections and transparency of information available to consumers. We will continue to work with our industry to protect consumers, while ensuring that we preserve the overall benefits of a competitive market and the rights of consumers to choose their supplier.

–RON CERNIGLIA
The writer is director of corporate and regulatory affairs for Direct Energy.

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