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Workgroup Reaches Consensus On Retail Supplier, Utility Communications To Energy Assistance Customers Whose Shopping Will Be Restricted To PSC-Approved Products This Summer

March 29, 2023

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Copyright 2010-21
Reporting by Paul Ring •

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A PC 44 workgroup, addressing a recent law in Maryland that limits customers who receive energy assistance through a program administered by the Office of Home Energy Programs (OHEP) to retail supplier offers that have been approved by the PSC, has reached a general consensus on communications that retail suppliers and utilities will send to customers concerning the forthcoming changes

As previously reported, new § 4-308 of the Public Utilities Article, Annotated Code of Maryland prohibits a third-party retail supplier from offering to provide electricity or gas services to a residential household receiving OHEP assistance, beginning July 1, 2023, unless the Commission has approved the supply offer (i.e., 'Energy Assistance Supply Offers')

The PSC-approved Energy Assistance Supply Offers must be below the default service rate for the entire duration of the supply contract.

In brief, the PC 44 workgroup reached a general consensus on a hybrid framework where the Utilities will send a targeted Notice to current and previous fiscal year Energy Assistance Household customers, informing them of the change in law and what it means for Energy Assistance Supply Offers beginning July 1. The Utilities will also post similar information related to this change on their websites, for a broader audience, incorporating key content from the targeted Notice.

Under the workgroup consensus, third-party retail suppliers will also notify those customers affected by the change in law by including in customer drop notices a description of this change and its impacts.

Specifically, third-party retail suppliers will send separate communications to affected customers regarding the change in law through drop notices triggered by the July 1, 2023 effective date. Suppliers will continue to follow existing COMAR requirements concerning customer drop notifications. Each supplier's communication under this section will include the following required information:

• Affirmative statement that suppliers are prohibited from charging an Energy Assistance Household customer an early termination or cancellation fee, including customers who are dropped to Standard Offer Service as a result of implementing PUA § 4-308;

• The customer's estimated drop date; and

• Statement that the drop will be automatic, the customer will receive a confirmation letter from the utility about the drop, and no further action by the customer is required

For customers receiving energy assistance before July 1, 2023, suppliers will provide 30-day Notice of Contract Expiration or Cancellation to shopping customers identified by the Utilities as energy assistance recipients in accordance with the terms of their contracts, consistent with COMAR and COMAR

For customers who enroll in energy assistance on or after July 1, 2023, suppliers will notify their customers of their option to transition to an approved offer or return to utility Standard Offer Service (electricity) or Sales Service (natural gas), consistent with the requirements in new COMAR and COMAR

With respect to the Utilities' communications, the workgroup report provides that for the June billing cycle, the Utilities with registered retail suppliers and customers on retail electricity and/or natural gas supply will send a Notice (via letter or email) to current and previous fiscal year Energy Assistance Household customers.

Among other things, the Utilities' notice will state, "You are receiving this notice because our records indicate that you are receiving, or have received, energy assistance from the Office of Home Energy Programs (OHEP), a division of the Maryland Department of Human Services. You may also be currently enrolled or considering enrollment, with a competitive [electricity] [natural gas] supplier. In Maryland, utility customers can choose to buy their electricity or natural gas supply from a company other than the utility. Due to a new law in Maryland, beginning July 1, 2023, Maryland households that receive financial assistance from OHEP for paying electricity and/or gas bills* may only sign up with a licensed competitive [electric] [natural gas] supplier if the supplier has an offer that has been approved by the Maryland Public Service Commission (PSC), the state's utility regulator. The approved offer must set a supply, or commodity, price that remains at or below [utility name's] current ['Standard Offer Service'] ['Sales Service'] rate for the rest of your supply contract term. The [Standard Offer Service] [Sales Service] rate is shown on your monthly [utility name] bill and includes what you would pay [per kilowatt-hour] [per therm] for [generation and transmission] [natural gas supply] from your [electric] [natural gas] utility."

Among other things, the Utilities' notice will state, "If you currently receive OHEP assistance for your energy bills (or received such assistance in the previous fiscal year) and you are also currently enrolled with a supplier who does not offer a PSC-approved plan, and the supplier is planning to return your account to [Standard Offer Service] [Sales Service] with (company) on or after July 1, 2023, the supplier must follow the cancellation terms of your contract and provide notice at least 30 days prior to ending the contract. The notice from your supplier will explain your options upon cancellation or expiration of your supply contract. Your supplier may not charge you any cancellation or other early termination fee because of this change. If you have questions about your supplier contract, please contact your supplier."

The Utilities' Notice will include a Frequently Asked Questions section which includes, among other FAQs, the following:

Q: What if I am an OHEP Energy Assistance Household recipient already enrolled with a supplier?


• For customers with a month-to-month supply contract as of July 1, 2023:

-- Suppliers may offer a new contract meeting the requirements above at the end of the July contract period.

-- If the supplier cannot offer a PSC-approved contract, you will be returned to (company) at the end of the July contract period.

• For customers with a longer duration supply contract as of July 1, 2023:

-- Suppliers may continue to serve you under your current contract until the expiration date or until the contract is terminated, whichever comes first.

-- At that time, the supplier may offer a new contract that meets the requirements above or return your account to (company)

Q: What if I am currently enrolled with a third-party supplier and then begin receiving OHEP energy assistance grants?


• If you enrolled before July 1st, you may continue your supply contract for its duration. You will not be able to renew unless your supplier has an approved offer.

• If you enrolled after July 1st, your supplier may need to cancel your contract unless your supplier has an approved offer. Your supplier will notify you regarding any cancellation.

• If your supplier has a PSC-approved offer for OHEP grant recipients, your supplier will notify you regarding changing your supply account to that approved plan.

The workgroup recommends that information substantially similar to information in the utility notices and on the utility websites should also be posted on the PSC's Energy Choice website

The workgroup also recommends that the Commission should enhance its Energy Choice website to include labels for any approved Energy Assistance Supply Offers as well filtering options to help Energy Assistance Household customers readily identify approved offers.

The workgroup did not reach a consensus on cost recovery of implementation costs for the changes to implement the law

Potomac Edison, SMECO, and the Exelon Utilities believe all costs, including utility costs, should be assigned to retail suppliers

The workgroup summarizes the utilities' position thusly: "The rules promulgated under PUA § 4-308, relating to low-income customer offers, are an obligation which the General Assembly imposed on the retail suppliers. To the extent it requires the Utilities to incur costs, Potomac Edison, SMECO, and the Exelon Utilities believe those costs should be borne by the retail suppliers, not the customers of the Utilities (the vast majority of which customers are non-shopping)."

RESA & NRG oppose assigning utility implementation costs to retail suppliers

The workgroup summarizes RESA's and NRG's position thusly: "RESA's and NRG's position on cost recovery is that both suppliers and the Utilities will incur costs to implement PUA § 4-308 and the regulations promulgated by the Commission in RM78. The Utilities should not be required to pay for suppliers' implementation costs, and suppliers should not be required to pay for the Utilities' implementation costs."


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