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PSC Allows Utility To Offer 100% Green Option As Part Of Default Service

Commissioner: Utility Green Supply Option Represents "Unraveling" Of Competition

August 19, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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The Maryland PSC, in a 4-1 decision, approved the application of Southern Maryland Electric Cooperative, Inc. to implement a proposed new rider, to now be called Rider G, which is, "intended to provide SMECO members who take SOS service the option to have SMECO make the power supply for their load one hundred percent 'green.'" had exclusively first reported SMECO's proposed green SOS rider, see our prior story for details

As approved, the rider will charge SMECO members who select the service the additional cost for meeting the 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 G rate as well.

PSC Chairman Jason M. Stanek said that Rider G is permissible under PUA § 7-510(c)(8)(i), which provides that an electric cooperative that as of July 1, 2006, supplied its standard offer service load through a portfolio of blended wholesale supply contracts of short, medium, and long terms, and other appropriate electricity products and strategies, as needed to meet demand in a cost-effective manner, may choose to continue to use a blended portfolio:

1. as approved and modified by the electric cooperative’s board of directors; and

2. with appropriate review for prudent cost recovery as determined by the Commission.

Stanek said that this language, which is unique to co-ops, provides co-ops with flexibility to offer SOS other than plain "vanilla" service.

Stanek stressed that the authority provided to co-ops with respect to SOS differs from the statutory provisions governing the SOS of the investor-owned utilities

Commissioner Anthony J. O'Donnell was the lone dissent

O'Donnell said that the PSC's acceptance of such an interpretation of § 7-510(c)(8)(i) would allow co-ops to offer any additional value-added product -- anything from EV rates to airline miles

Approval of Rider G represents an "unraveling" of competition, O'Donnell said

O'Donnell also called Rider G a "frontal assault" in trying to push retail choice out of the SMECO service area

While Stanek stressed the unique statutory provisions applicable to co-ops, O'Donnell still expressed concern that other utilities will seek to offer value-added products in addition to SOS, and will seek out other ostensibly ambiguous statutory language under which to offer such products

Approval of Rider G was also conditioned on SMECO providing to the PSC, in advance, its informational materials that will be provided to customers concerning Rider G, to ensure that the informational statements are not deemed promotional. Utilities are allowed to provide to customers information on SOS, but may not promote or market SOS.

The name of the rider was changed to Rider G, from Rider SOS-G, to reduce potential confusion with the default SOS product

As previously reported, Rider G will be available to members receiving SOS service on rate schedules R, GSND, GSD, LP, T, T-NSWC, SF, and CCSS.

The currently applicable Rider SOS-G rate is to be $0.00937 per kilowatt-hour.

As with SMECO’s SOS service, there will be no return (margin) charged under the rider. Members will only be charged the pass-through costs of the program.

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