Opinion: Suppliers Respond to AARP on Retail Energy Competition

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Maryland Matters published a commentary last month from Tammy Bresnahan, the director of advocacy for AARP Maryland regarding the “deregulated” retail energy market (“Annapolis Showdown on Utility Rip-Offs,” Feb. 23). The Retail Energy Supply Association (RESA) vehemently disagrees with this article and believes such assertions from AARP are not only misleading, but dangerous.

Bresnahan’s statement, “The Senate Finance Committee has voted the bill out with an amendment favorable to the industry,” is both inaccurate and misleading. The fact is the committee’s amendments provide that any customer who is receiving energy assistance will receive a rate at or below the utilities’ prices and the elimination of early termination fees.

(Editor’s note: Some of the amendments were changed after their initial vote in the Finance Committee, and the bill has been voted out of the full Senate. The House has also voted out its own version of the bill.)

More importantly, the amended bill provides more consumer education regarding how to shop for energy prices. This is in addition to the Maryland Public Service Commission launching two retail energy websites making information more transparent, user-friendly, and robust enough that consumers can get the information they need to make an educated and informed decision about their energy provider. RESA supported legislation requiring the PSC to develop a training and educational program for suppliers to complete to ensure they are familiar with consumer protections that are in place.

Additionally, it is a fact that Maryland is not deregulated; it is restructured. Retail energy supply companies are regulated, exactly the same way default service utilities are, and both must follow stringent rules and policies as promulgated by the PSC. Today, in a competitive marketplace, if consumers are unsatisfied with the service they receive from a business — for example, a plumber — the solution is not to ban all plumbers or eliminate consumer choice altogether. The solution is to allow consumers to make a different choice – and hire a different plumber.

Bresnahan called on the state to crack down on companies with “unscrupulous sales practices” and vote for SB31/HB397 with the amendments accepted by both sponsors. But what she failed to mention is the PSC is already taking action, and in fact the PSC does sanction suppliers that do not follow the rules. Look at the action the PSC took against Smart One Energy, LLC in case # 9617 last year. The PSC is also committed to educating consumers.

Decisions that affect Maryland consumers should be based on facts. So, here are the facts: First, competition in Maryland has brought down costs for all customers, those who shop and those who don’t shop. Federal data from the Energy Information Administration shows Maryland residential electricity prices have decreased by 19% since 2008.

Second, retail electric suppliers routinely offer dozens of plans priced below the Maryland standard offer service rate. According to Intelometry, a systems and data provider that specializes in retail energy markets and operations, if residential customers chose competitive electricity suppliers, they could have saved more than $40.6 million in January alone.

RESA strongly believes in protecting all consumers and maintaining a sustainable competitive market while preserving all consumers’ right to choose their supplier. The fact is retail choice enjoys strong support in Maryland. It is important the PSC continues to rigorously enforce consumer protections and provide consumers with education and information. RESA supports and appreciates the Committee for simplifying the language in the amendment and ensuring all parties interests are protected.

There is no question that retail choice should be allowed to continue to work on behalf of Maryland residents. It’s not only what Maryland consumers want, but also what they deserve.

— TONY CUSATI

The writer is chairman of the Maryland Lobby Group for the Retail Energy Supply Association.