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Retail Energy Industry Letter to Maryland Governor Wes Moore

Dear Governor Moore:

We are writing to express our deep concern with Senate Bill 1/House Bill 267. As currently drafted, and contrary to how it is being positioned, this bill is anti-consumer, anti-business, and anti-environment. If passed, it will drive business out of Maryland, drive up the cost of energy, and take choice away from Maryland consumers.

We urge you to prevent this legislation from becoming law. The legislation reflects a misapprehension of the energy industry, and well-established business practices of companies that have responsibly served Maryland consumers for many years. Above all it does not reflect your goals for Maryland. If you sign this bill, Fortune 500 companies, like NRG and Constellation, as well as many other reputable suppliers like the undersigned, will view the Maryland consumer market as essentially closed for business. Ironically, in an attempt to clean up the market, the legislation could simply leave it with only the worst actors.

This bill irreparably harms Maryland’s ability to meet legislatively mandated 2050 climate goals, and your agenda to attract more innovation and business investment to Maryland. It also sends a clear message to the almost 500,000 Maryland customers that currently shop that their preferences are irrelevant and that their energy supply service will be re-monopolized under orders from the state. They will know that their choices are of no consequence. What will Maryland choose for them next?

We are asking you to make an executive decision to move the energy market forward and not set it back 100 years. Encourage the Public Service Commission to ensure that Maryland consumers are protected and have the ability to choose the products and services that meet their own needs as was intended by the Electric Customer Choice and Competition Act of 1999.

We request an opportunity to meet with you and discuss our concerns and sincerely appreciate your efforts to keep Maryland open for business.

Sincerely,

Larry Coben, CEO – NRG Energy

Michael Stein, CEO – Genie Energy

Dan Verbanac, SVP – Constellation

Scott White, President and CEO – IGS Energy

James Bridgeforth, President – American Power & Gas

Scott Hudson, President – Vistra

Michael Carter, CEO – Just Energy

Robert Palmese, President and CEO – Indra Energy

Tom Matzzie, Founder and CEO – CleanChoice Energy

Paul Keene, CEO – Tomorrow Energy

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Energy News

Customers Unite and Support Legislation Allowing More Competition with Electric Utilities

The proposed bill will expedite a more affordable and reliable transition to a clean energy economy and expand access to the products and services available in the competitive energy market.

RICHMOND – Virginia Customers for Energy Choice, a diverse coalition of customers, businesses and environmental groups banded together to support Senate Bill 591 (SB 591) to expand competition with state electric utilities and reduce restrictions on customers being able shop for affordable and clean energy products. Sponsored by Senator Jeremy McPike (D-29), this legislation leverages Virginia’s existing retail electricity laws to help address increasing costs for consumers and achieve state-mandated clean energy goals.

The majority of Virginia’s electric market is controlled by two utilities. Compared to other states that allow competition, Virginia imposes significant restrictions on the limited number of commercial and industrial customers allowed to access the competitive energy market and choose their energy supplier. Currently, no residential customers may choose a clean energy or associated retail product if their utility offers a clean energy plan, even if it is more expensive or has less attractive renewable attributes than competitors. A 2021 survey revealed that 83% of Virginia’s residents support energy choice. 

State utilities have projected an increase in electric demand, reliability concerns, a lack of renewable energy to meet existing and future demand and the need to deploy energy efficiency and energy use management tools. Fewer market participants, innovations, and private investments in the market will result in singular and narrow, costly paths forward and fewer opportunities to affordably and reliably address these challenges for Virginia’s residents. 

According to the Energy Information Administration (EIA) in 2022, Virginia’s utilities increased electric rates 18% for commercial and industrial customers. The limited Virginia customers that were able to shop saved more than $105 million compared to utility rates between 2017-2021 and the majority were enrolled in plans that were 100% renewable energy. 

“We are continuously identifying ways to reduce costs and overhead so we can pass those savings on to our members,” said Shay Reed, Assistant General Merchandise Manager for Costco Wholesale. “Energy usage is a significant operating cost and the ability to shop the competitive market, choose our energy supplier and tools to help us manage our energy usage is critical to maintaining our business model.” 

Virginia’s top economic drivers are energy intensive industries. However, state utilities warn they cannot accommodate the growing demand, jeopardizing future investments and creating uncertainty for existing customers. Energy is a top operating expense and businesses want options on price, renewable make-up and energy use management tools and products. Competition supports jobs, increases tax revenue, and drives investments in clean energy technologies.

“Energy is a top operational expense for our commercial enterprise. With Senate Bill 591 removing some of the barriers to competitive energy markets, we will have the freedom to select the most cost-effective supplier, enabling us to enhance our competitiveness in Virginia’s business landscape,” said Robert Pizzini, Managing Partner and CEO for iFLY. “Ultimately, these savings will help offset the increases in minimum wage, Dominion Energy rates, and other notable cost increases over the past three years. This bill enhances our ability to thrive and grow, driving economic prosperity within our community.”

States that allow competition with utilities outperform those with monopolies by reducing overall electric costs and carbon emissions, supporting the transition to clean energy, promoting electric vehicle adoption, and implementing  energy efficiency and use management tools without relying on ratepayer or state dollars. Allowing retailers to compete for  the state’s larger customers will reduce the amount of capacity the utility must purchase from the wholesale market during periods of peak demand, ultimately lowering the cost of electricity for ratepayers who remain with their utility.  

The coalition supporting SB 591 represents a wide spectrum of Virginia business and environmental interests and can be viewed here.

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About Virginia Customers for Energy Choice

Virginia Customers for Energy Choice is a coalition of customers, businesses and Virginia organizations representing environmental and economic interests that support legislation to reduce barriers to electric competition and create access for customers to purchase energy products and services from the competitive market.

For media inquiries, please contact

Max Lifton

lifton@retailenergychoice.org

Categories
Energy News

Preserving Maryland’s Competitive Energy Market

Maryland, State House, Energy Choice

On January 25th, the Retail Energy Advancement League (REAL) presented concerns about Senate Bill 1 (SB 1) before the Maryland Senate’s Education, Energy, and the Environment Committee. SB 1 has sparked intense debate over its potential impact on the state’s energy landscape.

  • REAL opposes SB 1 due to the bill’s lack of substantive consumer protections and educational measures.
  • Opponents believe that SB 1 poses a threat to Maryland’s competitive energy market established in 1999, known for fostering innovation and providing consumers with diverse choices.

The competitive energy market has historically flourished, offering substantial benefits to consumers:

  • As of Dec. 31, there were 273 retail supply options listed on the state-managed website mdelectricchoice.com, with 110 offering fixed-price plans lower than the default utility rate, resulting in immediate savings for Maryland consumers.
  • 98 options provided 100% renewable energy, with 35 being both environmentally friendly and more affordable than the default utility rate.
  • Potential savings for Maryland residents were estimated at $59,831,935 in December 2023 alone, highlighting the tangible benefits of the existing competitive market.

Supporters of SB 1 argue it addresses systemic challenges in Maryland’s energy sector:

  • They emphasize consumer safeguards in the bill, including license renewals, addressing teaser rates, and enhanced penalties against predatory practices.

However, opponents, including REAL, NRG, IGS, CleanChoice, WGL, Legacy Solar Partners, RESA, and former PUC commissioner John Hanger, express concerns:

  • They highlight the importance of a well-functioning competitive retail market with robust consumer protections.
  • Concerns range from issues related to Renewable Energy Credits (RECs) to potential impacts on pricing of renewables and compliance.

REAL supports reporting complaints and identifying bad actors for consumer well-being:

  • Existing avenues for addressing concerns have been effective, with complaint rates averaging less than 1 in 10,000 customers.

A critical concern raised by REAL is SB 1’s attempt to regulate pricing, a jurisdiction the Public Service Commission (PSC) currently does not possess:

  • This could represent a fundamental shift with potential adverse consequences for the market and consumers, stifling innovation in the industry.

Maryland has already taken measures to address concerns:

  • The PSC initiated a docket to identify and implement additional consumer protections, and REAL expresses a willingness to collaborate.
  • Regulations are in place to safeguard consumers receiving energy assistance funds, ensuring they don’t pay more than the standard offer service (SOS) price.

REAL contends that SB 1, in its current form, poses a threat to the well-established and effective competitive energy market in Maryland. We remain committed to working collaboratively with the PSC to address legitimate concerns while preserving the principles that have driven Maryland’s energy success thus far.

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