Status: The State has partially implemented
comprehensive unbundling programs for its residential gas customers. |
Overview: Almost all of Maryland's
residential customers may select their gas supplier under comprehensive
programs in place for the State's three largest local distribution
companies (LDCs): Baltimore Gas and Electric Company (BGE), Washington Gas Light Company (WGL), and
Columbia Gas of Maryland, Inc. (Columbia). As of December 2009, the Maryland Public Service Commission (PSC) estimated that 125,366 residential customers in the State were buying gas from non-utility suppliers, up about 9 percent from the 114,937 enrolled in December 2008 but 28 percent less than the number (173,282) in September 2001. However, current participation represents
about 12 percent of the households that are eligible for choice programs.
All commercial and industrial customers may choose their gas suppliers.
According to the PSC, as of December 2009, 11
companies have licenses to sell and/or market natural gas to residential
consumers in the State. Six suppliers serve residential customers in BGE's service
area, two suppliers serve customers in Columbia's area, and four
serve customers in WGL's area. In accordance with the Natural Gas Supplier Licensing and Consumer
Protection Act of 2000, all suppliers must be licensed by the PSC.
Applicants must provide proof of financial integrity, post a bond if they
collect deposits from customers, and establish procedures for billing
practices.
The PSC filed proposed regulations for competitive gas supply in 2005 in conjunction with proposed rules for competitive electricity supply. However, during the comment period it became evident that the gas rules needed more development. LDCs, marketers, and consumer advocates met several times in 2006-2007 to discuss issues unique to the gas industry and consider how these differences could be incorporated in regulations that would be similar to those being considered for competitive electricity supply. The new rules for competitive gas supply became final in September 2009. They establish consumer protections for choice customers, require uniform procedures for retail gas supply, and give LDCs who send consolidated bills the option of sharing customers' partial payments with marketers on a pro-rata basis or of purchasing the marketers' receivables. In their compliance filings, all LDCs proposed to purchase the marketers' receivables, although initially WGL proposed to implement proration of payment. The PSC conducted hearings on these proposals in December 2009. |
EIA State Data: In 2008, Maryland had 1,057,521 residential and 75,053 commercial customers. They consumed approximately 81 and 70 billion cubic feet of natural gas, respectively. The average prices residential and commercial customers paid for natural gas from local distribution companies and marketers were $16.08 and $13.14 per thousand cubic feet, respectively.
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Eligibility and Participation in Retail Choice
Programs: |
Eligibility and Participation by Customer Class, December 2009
Customer Type |
2008 Customer Total
|
Eligible December 2009 |
Participating December
2009 |
Total |
Percent
of 2008 Customer Total |
Total |
Percent
of Eligible |
Percent
of 2008 Customer Total |
Residential |
1,057,521 |
1,042,341 |
98.6 |
125,366 |
12.0 |
11.9 |
Commercial/Industrial* |
76,278 |
77,618 |
100 |
22,539 |
29.0 |
29.5 |
Total |
1,133,799 |
1,119,959 |
98.9 |
147,905 |
13.2 |
13.0 |
*Maryland Public Service Commission eligibility and participation numbers are for "Firm Service Commercial and Industrial." The Energy Information Administration's Natural Gas Annual 2008 reports Maryland had 75,053 commercial and 1,225 industrial customers in 2008.
Sources: 2008 Customer Total: Energy Information Administration, Natural Gas Annual 2008 (March 2010). Eligibility and Participation: Maryland Public
Service Commission (February 2010).
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Eligibility and Participation by Local Distribution Company, December 2009
Local
Distribution Company |
Number
of Residential Customers |
Eligible |
Participating |
Percent of Eligible |
Baltimore Gas and
Electric |
606,825 |
60,263 |
9.9 |
Columbia Gas of
MD |
28,486 |
741 |
2.6 |
Washington Gas
Light |
407,030 |
64,362 |
15.8 |
Total |
1,042,341 |
125,366 |
12.0 |
Source:
Maryland Public Service Commission (February 2010).
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Regulatory and Legislative
Actions on Retail Unbundling |
Summary: In February 1995, the Maryland
Public Service Commission (PSC) began a "roundtable" collaborative process
with the State's three largest local distribution companies--Baltimore
Gas and Electric (BGE), Washington Gas Light (WGL), and Columbia Gas of
Maryland (CGMD)--to unbundle natural gas services. Since then, the PSC
has approved several customer choice programs developed by the LDCs. The
first programs extended choice only to commercial and industrial
customers, but now all three LDCs have choice opportunities for
residential customers. The first programs for residential customers had
participation caps, but now all customers of these three LDCs may choose
their own gas supplier. The programs include customer protection
requirements and require that participating marketers be financially sound
and have sufficient upstream capacity to ensure reliable service. The LDC
is the supplier of last resort. Utility-specific roundtables discussed several issues, including ways to facilitate fixed-price
commodity service by licensed suppliers to low-income customers. In August
2002, the PSC determined that LDCs should continue providing retail sales
service and ruled it premature to order otherwise. In September 2009, the PSC adopted new regulations to govern competitive gas supply that set statewide uniform standards and require LDCs to purchase receivables of competitive suppliers or adopt prorated sharing of partial payments. |
Regulatory and Legislative Actions
Legislation |
04/02 |
Standards of conduct rules. The legislature amended HB 135 to allow
PSC to continue to apply standards of conduct rules for gas and
electric companies. The Court of Appeals (4-8-02) had overturned
rules that were part of Order 76292, which implemented, in part, the
restructuring and partial deregulation of the State's electric and
natural gas utilities. |
|
10/00 |
Natural Gas
Supplier Licensing and Consumer Protection Act of 2000 (Section
7-601 et seq. of the Public Utility Companies Article of the
Maryland Annotated Code). Directs the PSC to adopt licensing
requirements and procedures for natural gas suppliers and to set
consumer protection requirements for suppliers. |
Regulatory
Actions |
09/09 |
PSC approves final rules for competitive gas supply. The regulations set statewide uniform standards for competitive gas supply and establish consumer protection measures for choice customers. The rules govern the interaction of retail gas suppliers with gas utilities as well as with the their firm, non-daily metered customers, including billing, payment, and switching. The rules provide for consolidated billing and require LDCs to purchase receivables of competitive suppliers or adopt prorated sharing of partial payments in which partial payments are shared between the gas company and the supplier in proportion to the amount owed them. Compliance filings are due October 8, 2009. |
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07/09 |
PSC adopts proposed rules for competitive supply on an emergency basis. The revised rules were published in the July 6, 2009, Maryland Register. The previous rules were sent back to the work group for review. At issue was the question of whether rules should apply to all gas customers or just residential and small commercial customers and whether the PSC has authority to set rules that only apply to residential and small-volume customers. |
|
12/08 |
PSC publishes proposed rules for competitive gas supply. Proposed new regulations to govern competitive gas supply would set statewide uniform standards and require LDCs to purchase receivables of competitive suppliers or adopt prorated sharing of partial payments in which partial payments are shared between the gas company and the supplier in proportion to the amount owed them. Comments will be accepted through January 20, 2009. |
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08/08 |
PSC initiates rulemaking docket on competitive gas supply. Proposed regulations on competitive gas supply will be considered in parallel with rules for the electric industry. Proposed rules would establish consumer protections for choice customers, standards for consumer interactions with marketers and LDCs, and rules for interactions between marketers and LDCs. The rules would require uniform procedures for retail gas supply and change current payment posting hierarchy to pro rata sharing or purchase of gas receivables at the LDCs' option. |
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02/05 |
PSC staff
analysis of ring-fencing measures for utilities. The PSC staff
recommended that the commission adopt an annual ring-fencing
reporting requirement for the State's gas and electric utilities to
ensure financial security and service reliability and insulate the
utilities from potentially riskier activities of an uregulated
affliliate. |
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09/04 |
Retail gas
market conference. Staff submitted comments regarding the status
of the Maryland natural gas market, stating that 47 companies have
been issued a license to sell/and or market natural gas to
residential customers in the State. BGE has the greatest number (11)
of active suppliers in its territory, with six enrolling new
customers. Washington Gas Light has five suppliers and Columbia Gas
of MD has one. Service offers range from a variable month-to month
offer to a fixed-price with a 3-year term. |
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