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Maryland Standard Offer Service (SOS) Rates
Commercial & Industrial Customers
Frequently Asked Questions
Q
What is Standard Offer Service?
A
Since 2000, Maryland customers have had the right to choose an electricity supplier other than Delmarva Power. If you don't choose a supplier, Delmarva Power buys electricity for you and charges you according to rates approved by the Maryland Public Service Commission. This is called "Standard Offer Service" (SOS), and the cost for this appears under "Supply Charges" in the Electric Delivery Charges portion of your bill (customer bills are broken down to indicate charges for "supply," the actual electricity, and "delivery," the process of getting that electricity to end users). Delmarva Power continues to deliver the electricity to all customers whether or not they choose another supplier.
Q
Why did the rate caps come off?
A
In Maryland in 2000, to provide a benefit to residential and small commercial customers during the transition to competition, base rates were reduced 7.5% and capped. At that time, it was agreed that the caps would be lifted by 2004 so that Standard Offer Service rates would become competitively priced to allow competition from third-party (alternate) electricity suppliers.
Q
What will happen now that the rate caps are off?
A
Delmarva Power will continue to buy electricity for customers who do not choose another electricity supplier. The price for this electricity is obtained through a competitive wholesale bidding process supervised and approved by the Maryland Public Service Commission. Delmarva Power will continue to deliver electricity to customers at regulated rates.
Q
Are the new SOS supply rates in effect?
A
Rates for Delmarva Power's Maryland customers changed June 1, 2004, when caps were lifted on Standard Offer Service.
Q
How long will the new commercial SOS rates be in effect?
A
SOS rates will be set annually based on a competitive bidding process in the wholesale electricity market. In the fall of 2004, Delmarva Power, under the supervision of the Maryland Public Service Commission, will conduct another bidding process that will result in new SOS supply rates that will take effect on June 1, 2005.
Q
How long is Delmarva Power required to provide SOS rates?
A
Delmarva Power will continue to provide SOS for Maryland residential customers and small commercial customers (Type I, up to 60 kW demand) until May 31, 2008. Medium-sized commercial customers (Type II, from 60 kW demand up to 600 kW PJM peak load contribution) will be eligible for SOS until May 31, 2006. The largest commercial customers (Type III, 600 kW PJM peak load contribution and above) are eligible for SOS until May 31, 2005.
Q
How did I qualify for my rate?
A
The distinction between Type I, Type II, and Type III customers is based on PJM capacity peak load contribution (PLC), which is set annually and effective January 1.
- Type I customers are generally what we call small business customers. They are non-residential customers whose PLC is less than 60 kilowatts. Type I customers include unmetered lighting customers. Currently these customers are on Small General Service (SGS-S), General Service Water Heating (GS-WH) or Space Heating (GS-SH), Outdoor Lighting (OL), and Outdoor Recreational Lighting (ORL) rate schedules.
- Type II customers are medium-sized commercial customers with peak load contributions between 60 and 600 kilowatts. Currently, these customers are on Small General Service (SGS-S), Large General Service (LGS-S), or General Service - Primary (GS-P) rate schedules.
- Type III customers are large commercial and industrial customers with peak load contributions greater than 600 kilowatts. Currently, these customers are on Large General Service (LGS-S), General Service - Primary (GS-P), or General Service - Transmission (GS-T) rate schedules.
Please note that your current schedule and SOS Type are based on peak load contribution and not billing demand.
Q
Do I have an option to remain with Delmarva Power or am I required to choose another supplier now?
A
You are not required to choose another supplier at this time. If you do not choose another supplier, Delmarva Power will continue to both supply and deliver your electricity.
Q
What is the Procurement Cost Adjustment and how often do you expect this charge to change?
A
The Procurement Cost Adjustment (PCA) is a new charge for the SOS portion of your bill. Its purpose is to true-up the difference between money collected from SOS customers and money paid to procure electricity from suppliers. The PCA will be adjusted at least three times per year to correct these imbalances.
Q
What are some other charges that could impact my electric bill?
A
The Administrative Credit (AC) is a credit applied to all customers' delivery charges that refunds money collected from SOS customers for administrative costs that exceed the company's actual costs. The AC also will be adjusted at least three times a year.
Q
What is the Price to Compare?
A
The Price to Compare is a tool that can help you compare Delmarva Power's current electricity costs with offers that you may receive from other electricity suppliers. It is the average cost per kilowatt-hour for supply service, based on your rate classification. It also includes the Procurement Cost Adjustment, a line item on your bill, which will initially be set at zero, but may fluctuate slightly periodically throughout the year. A Price to Compare is only available for residential and Type I commercial customers.
Q
Do I need to include the transmission charges when I shop for suppliers?
A
Yes. You need to include the Standard Offer Service and Transmission charges plus the Procurement Cost Adjustment when calculating your individual price to compare in any given month.
Q
How can I switch suppliers?
A
The Maryland Public Service Commission's web site at www.md-electric-info.com has information on how to choose a supplier. Consider your current service, your usage, your budget, and the marketplace to make informed decisions about your electric needs. It is your choice. More information on Maryland Customer Choice is available on our web site.
Q
Where I can find a list of suppliers?
A
The Maryland Public Service Commission maintains a list of suppliers on its Web site at http://www.md-electric-info.com.
Q
What factors have driven the significant change in generation prices?
A
Prices for other energy products have increased significantly over the past four years, including natural gas, up 46%; oil, up nearly 70%; gasoline, up almost 60%; and coal, up nearly 82%. Several of these fuels are used to produce electricity and none of these increases had been reflected in your bills. The price increases in fuels is the primary driver for the higher prices for electricity. The rates resulting from the auction better reflect the market value of electricity in comparison with the previous rates that were established through the historic regulatory process.
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