Distribution Utility's Sought Offering Of Renewable Energy To Default Service Customers Called "Roll Back" Of Deregulation

July 29, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Retail Energy Supply Association filled comments at the Maryland PSC in opposition to a proposal from the Southern Maryland Electric Cooperative, Inc. to offer RECs to default service customers under a new rider (Standard Offer Service – Green, SOS-G), as RESA said that, "SMECO is asking the Commission to roll back deregulation and impermissibly expand SMECO’s role beyond the defined scope specified by the General Assembly to authorize a regulated non-electricity REC product."

SMECO's proposed REC offering for SOS customers had been exclusively first reported by EnergyChoiceMatters.com (see story and details on the rider here)

As proposed, the rider would charge the members the additional cost for meeting that 100% green requirement above the regular SOS rate in effect. Members who choose the Rider will continue to pay the base SOS rate and the PPCA rate for their power supply and will be billed the Rider SOS-G rate as well.

"The Choice Act requires that SMECO’s proposal be rejected," RESA said

"Allowing monopoly utilities or cooperatives to sell regulated REC customers would be anticompetitive because, absent a full unbundling, competitive suppliers would have to compete against a utility REC offering that is partially subsidized by distribution rate payers. SMECO states that the proposed rate includes 'administrative costs it incurs in implementing and maintaining the program, but no administrative or REC cost inputs were provided in the filing. Moreover, SMECO’s proposal would be a pass-through REC product with 'no return charged in the rider.' By contrast, competitive suppliers must recover all of their costs and their margin within the prices they charge. SMECO’s proposed product would further tilt the playing field in favor of the utility with a partially subsidized renewable energy offering that does not include a return component," RESA said

"SMECO’s proposal to call a REC product 'Standard Offer Service' may be confusing to SMECO’s members because REC products are not SOS as defined in the PUA. SMECO proposes that members remaining on SOS would opt in to pay an additional charge for SMECO to purchase RECs to match the customer’s electricity usage. Accordingly, SMECO would not be selling any energy under Rider SOS-G, just RECs," RESA said

RESA said that SMECO’s green rider is not necessary because competitive renewable energy options are already available for SMECO members.

As of July 28, 2020, there are at least a dozen renewable energy offerings on the Maryland PSC's electric choice rate board from which SMECO members may choose, RESA said

RESA encouraged SMECO to educate customers about their renewable choices and the PSC's electric choice shopping site

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