How Maryland Electric Choice Works Before You Shop
Shopping for electricity in Maryland is not the same job as shopping for electricity in Texas, and it is not the same job as living in a fully regulated state where one company sells you everything. Maryland unbundled generation from delivery for most investor-owned utility customers: you may choose a retail supplier for the power itself, while the local utility still owns the wires, reads the meter, restores outages, and bills for delivery. The ¹ calls that option retail choice or customer choice, and it is explicit that the distribution utility still delivers contracted electricity to the meter and charges for that service. Before you compare a flyer’s cents-per-kilowatthour number to your whole bill, you need that split in your head. A supplier price is usually only the supply slice. Delivery, riders, and policy charges can still sit on the utility side of a consolidated bill.
That is the practical starting point for a household or small business in Baltimore, the Washington suburbs, the Eastern Shore service of an investor-owned utility, or any other territory where choice is actually available. It is also the starting point if you live in a regulated market and are reading this because a relative in Maryland keeps forwarding “save 30%” emails. The mechanics below are Maryland-specific. The comparison habits travel: know your default, know what you are buying, and do not treat a headline rate as the total cost of keeping the lights on.
Supply versus delivery: why the bill looks like two companies
In a traditional vertically integrated market, the serving utility generates (or buys) power, transmits it, and distributes it. In a retail electric choice market, most consumers can choose the supplier while the utility remains responsible for transmission and distribution, as the ² summarizes for federal buyers who face the same market map. Maryland sits in that second category for customers of investor-owned utilities. A licensed broker serving Baltimore describes the local version plainly: Baltimore Gas and Electric delivers through BGE infrastructure, and a competitive retail supplier may sell the supply portion, with the market overseen by the Maryland Public Service Commission. That ³ also notes the regional grid operator as PJM. Substitute Pepco or Delmarva Power if that is whose name is on your pole and your outage map, the same investor-owned utilities that later described Maryland’s default-supply auctions in comments covered by ⁴. The comparison method does not change when the logo does.
EIA’s state electricity profile is useful here as a scale check, not as a shopping quote. In 2024 Maryland’s average retail price across sectors was ⁵, ranking thirteenth among states, with nuclear as the state’s primary generation source in EIA’s accounting. The same table splits retail sales into full-service provider sales and energy-only provider sales. Energy-only sales are the competitive-supply slice of the market; they are not a rate you can paste onto your kitchen bill. EIA’s ⁶ is equally blunt about what averages hide: generation is typically the largest component of price, but transmission, distribution, fuel, weather, and regulation all move the total, and residential customers usually pay more than industrial customers because delivery to homes is more expensive per unit.
When EIA publishes average retail prices, those figures include generation, transmission, distribution, taxes, and fees. They are not the same thing as the itemized supply rate on a supplier offer sheet. That distinction is the whole point of ⁷ rather than against a statewide average. If you mix those numbers, you will “save” on paper and overpay in the real world, or you will walk away from a decent supply deal because you compared it to a total that still includes wires.
Retail choice is also not universal inside Maryland’s borders. EIA’s national FAQ is careful: choice is generally available to investor-owned utility customers, while many cooperatives, municipal utilities, and government-operated systems do not offer it, except where a specific program exists. If you are not sure, EIA’s instruction is the unglamorous one that prevents wasted shopping: contact the distribution utility or the state commission and ask whether retail choice applies to your account class. That is not bureaucracy for its own sake. It is how you avoid comparing plans that never attach to your meter.
Maryland is not Texas, and it is not a fully regulated monopoly either
EIA draws the Texas contrast because people keep importing Texas shopping advice into states where the default is different. In Texas, customers of utilities connected to the grid managed by the Electric Reliability Council of Texas are generally required to choose a retail electricity provider. Maryland’s design is voluntary. You can stay on utility default supply. You can switch. You can switch back, subject to contract terms. EIA’s ¹ is the cleanest one-paragraph map of that difference.
Maryland, Pennsylvania, New Jersey, and neighboring states also sit inside PJM Interconnection, the regional transmission organization that coordinates wholesale electricity across Maryland and a dozen other jurisdictions. A ⁸ describes PJM as a competitive wholesale market operator and reliability manager for a multi-state grid, administering day-ahead and real-time energy markets plus capacity and ancillary services. Wholesale prices in PJM move constantly. Your residential default rate in Maryland is not supposed to. That is a design choice, not an accident, and it is why “shop like a Texan” is the wrong mental model even when the product names look similar.
The policy fight over that default has been public. When NRG backed Maryland legislation that would have remade who serves new customers by default, Maryland’s Public Service Commission chair called the proposal a dramatic redo of late-1990s restructuring and compared the direction to a Texas-style mandatory shopping model. Consumer advocates argued that forcing households into retail shopping would import wholesale risk into kitchen-table bills. ⁹ of that debate is useful before you shop because it explains why Maryland still treats Standard Offer Service as the quiet default rather than as a leftover inconvenience. You are not being “left behind” if you stay on SOS. You are using the product the state built for people who do not want to become amateur power traders.
Participation numbers reinforce the same point. EIA reported that in 2021 about ¹⁰ in voluntary retail-choice programs were on a competitive supplier, or 13.2 million customers, excluding Texas’s mandatory program. Ohio’s participation was about 50 percent that year. Maryland is in the voluntary-choice geography EIA catalogs, not the ERCOT must-choose geography. If a salesperson treats non-shopping as irrational, they are selling urgency, not describing how this market was designed.
Standard Offer Service is the product you already have unless you leave it
If you do not choose a competitive supplier, Maryland’s default electricity supply is Standard Offer Service, commonly abbreviated SOS. David Lapp, then heading Maryland’s Office of People’s Counsel, described the mechanics in the same Utility Dive reporting: the Public Service Commission oversees auctions in which wholesale suppliers compete to supply power to distribution utilities, and customer rates are set through fixed-price contracts that spread risk over a two-year period rather than exposing households directly to short-term wholesale spikes.
The investor-owned utilities that file jointly as BGE, Pepco, and Delmarva Power have described the same machine in later comments. Under the SOS model, the utility enters two-year “full requirements” agreements with wholesale suppliers covering energy, ancillary services, capacity, and renewable energy credits through biannual auctions, with each auction procuring about 25 percent of retail customer load. ⁴ quoted those utilities saying the structure has, in their view, produced competitive auctions and general price stability since the early 2000s, and that it does not require named generating plants to serve the awarded load. Maryland PSC staff, in the same coverage, noted that SOS already uses a dollar-cost-averaging idea: utilities generally procure twice a year for smaller customers in partial increments so prices reflect more than one market moment.
That overlapping-procurement design is why SOS is a moving but buffered number rather than a frozen lifetime rate. It is also why a competitive offer that undercuts SOS for three months and then floats can still lose over a year. EIA has reported a related national pattern: in customer-choice states, residential customers have, in the aggregate, ¹¹ than through noncompetitive suppliers, while commercial and industrial customers have often paid less. EIA’s explanation is not mysterious. Large users have leverage. Small users do not, unless they join a buying group or an aggregation. Most restructured states also require utilities to buy default supply through auctions or requests for proposal, which makes it harder for marketers to beat the default on price alone.
SOS is also the safety net if a supplier exits or if you never pick anyone. That is the opposite of a Texas-style “you must choose a REP” enrollment. If your goal is simply not to get surprised, learn the current SOS supply price on your bill or utility comparison page first. Everything else is a delta from that number, not a replacement for the entire bill.
What a competitive offer is actually quoting
Offers almost always price in cents per kilowatthour. EIA defines a ¹² as one kilowatt of power used for one hour. Its ¹³ uses the household example: a 40-watt bulb run for five hours uses 0.2 kWh. Your supply charge is that unit times the contracted rate, plus any monthly fees the contract adds. It is not usually a charge on your peak demand in kilowatts unless the small-business tariff says so.
Scale matters because marketers love monthly dollar callouts. In 2022, the average U.S. residential customer purchased about ¹⁴, or about 899 kWh per month. Maryland homes will differ with heat pumps, electric vehicles, and row-house versus detached load. Use your last 12 months from the utility portal if you can. Multiply the offer’s supply rate by those kWh. Add monthly fees converted to cents per kWh at your usage. Compare that stack to the supply line you already paid, not to the total that still funds poles and programs.
Plan type is the next filter. A licensed broker’s ¹⁵ describes the usual menu: fixed-rate plans that lock a price per kWh for a term, variable-rate plans that can change with market conditions, and renewable-labeled products. Fixed rates buy predictability. Variable rates buy flexibility and, sometimes, regret. The Texas winter-storm lesson that Maryland legislators cited in the NRG debate was specifically about variable and indexed products that household customers did not fully understand. Maryland’s default SOS is built to avoid that particular surprise. If a door-hanger’s rate is only good for an introductory window, the real product is the renewal rate, not the teaser.
Term, early termination fees, and automatic renewal belong in the same column as the rate. A few tenths of a cent “savings” evaporates if you sell the house and pay an exit fee, or if the contract rolls to a higher variable price while you are not looking. Ask, in writing, what is included in the advertised energy charge versus passed through as a rider. The WattKarma offer-sheet guide’s rule of thumb is the right one: if the sheet is vague about inclusions, treat it as unfinished until it is not.
Switching itself is operationally dull, which is the point. In deregulated markets, changing suppliers does not reroute the wires. ¹⁵ states the standard mechanics: no interruption of service, the utility keeps delivering, and a new plan typically starts on the next billing cycle after enrollment. That is true only if you actually enroll with a licensed supplier and if you are not breaking a contract you have not priced. “Safe” in this context means the lights stay on. It does not mean every contract is a good deal.
Community choice aggregation can change the default without a salesperson
There is a third path besides SOS and a private marketer: community choice aggregation, also called municipal aggregation. The ¹⁶ describes CCAs as programs in which local governments procure power for residents, businesses, and municipal accounts from an alternative supplier while customers still receive transmission and distribution from the existing utility. Participation is voluntary. Most programs are opt-out: you get notice, and if you do nothing you are enrolled. Opt-in programs exist but typically draw fewer people. EPA lists Maryland among states that authorize CCAs, citing 2021 House Bill 768 and a Montgomery County community choice energy pilot.
That matters before you shop because your “default” may not be classic SOS forever in every county. EPA notes that CCA customers continue to get the same delivery and maintenance from the local utility, usually on a single bill that reflects the supplier change. The only intended changes are generation source and generation price. EIA’s retail-choice FAQ likewise lists community choice aggregators among programs customers can opt into or out of. If a county mailing arrives in the same week as a private supplier flyer, read both. One may be changing the baseline the other is claiming to beat.
EPA also reports that in 2022 about 5.7 million customers procured about 14.6 billion kWh through CCAs nationally. Maryland’s authorization is newer than California’s or Ohio’s. Do not assume a mature county program exists at your address. Confirm with the utility or local government whether aggregation is operating, scheduled, or still a pilot on paper. If you live in a county discussing CCA, the shopping question is not only “marketer versus SOS.” It is “marketer versus SOS versus county product,” and the notices will not all use the same vocabulary.
“Green” on an offer sheet is not the same as Maryland’s legal renewable floor
Every licensed electricity supplier serving Maryland consumers operates under the state’s Renewable Portfolio Standard. A 2019 presentation to the Department of Energy’s Electricity Advisory Committee from Maryland regulators summarized the Clean Energy Jobs Act as targeting ¹⁷, with a 14.5 percent solar carve-out and 1,200 megawatts of offshore wind. That is a compliance obligation on load-serving entities. It is not a boutique feature a marketer invented last Tuesday. A plan that merely meets the legal floor is not “extra green.” It is legal.
Voluntary green products sit on top of that floor. EPA’s ¹⁸ site exists because claims about renewable supply need a paper trail: energy attribute certificates, also called renewable energy certificates, represent the environmental attributes of one megawatt-hour of renewable generation and can be sold separately from the electrons. The Department of Energy’s off-site procurement guide makes the same point for buyers: understand REC ownership, because unbundled credits may come from projects far from your utility territory. Ask how a plan’s renewable percentage is documented, whether certificates are retired on your behalf, and whether the mix is bundled with energy or is a credit overlay. If the answer is a slogan, you are buying a slogan.
EIA has noted that many residential and small commercial customers have been willing to pay more per kilowatthour to choose renewable-labeled supply. That can be a rational preference. It is not a savings claim. Price the product as a premium if it is a premium. Then decide if you want it.
The consumer-protection problems are old, documented, and still worth five minutes
Competitive supply can be legitimate. It can also be sold badly. In 2020 Maryland’s Public Service Commission fined Smart One Energy $561,000 and suspended its natural-gas supplier license after finding slamming—enrolling customers without consent—plus failures to provide a contract summary and deceptive solicitations, according to ¹⁹. That case was gas, not electricity, but the enrollment failures are the same family of harm electric shoppers are warned about: a switch you did not authorize, a missing summary, a pitch that does not match the contract. The commission’s chair said Maryland wants a competitive marketplace and will act when rules are not followed. Your job is narrower. Do not enroll from a cold call or a tablet on a folding table unless you have the written contract, the summary, and a comparison to SOS.
Licensing is the other filter. Brokers and suppliers in Maryland are supposed to be authorized. A broker is an intermediary, not the utility and not the generator. WattKarma’s FAQ describes that role and states it is licensed in Maryland as well as in Texas and Ohio. Use licensing as a yes-or-no gate, not as a quality rating. A license means the company is allowed to operate. It does not mean the rate is good.
Variable rates and teaser-to-renewal rollovers are the quiet version of the same problem. No slamming required. You said yes once, and the economics changed while your attention moved on. EIA’s finding that residential competitive supply has often cost more than default supply is the statistical background for that warning. Commercial accounts with real load and a broker who lives in the contract language are a different market. Households shopping from a postcard are not.
If you are a small-business owner, do not copy a residential flyer’s math onto a demand-metered account. Demand charges, time-of-use windows, and demand response can still live on the delivery tariff even when supply is competitive. The Department of Energy’s first step for sites in choice markets is to ² before picking a procurement path; EIA likewise says to confirm with the utility or commission whether choice applies. The wires company still sets a large part of your bill.
A pre-shop checklist that actually changes the decision
Start with territory. Confirm the delivery utility and whether retail choice applies to your account. EIA’s IOU-versus-co-op distinction is the first fork. A BGE Baltimore household is not in the same product set as a customer of a cooperative that never opened supply to marketers.
Pull twelve months of kWh. Convert any monthly fee on an offer into cents per kWh at that usage. Compare supply-to-supply against SOS, using the utility’s posted SOS comparison price for the relevant season if you have it. Remember EIA’s warning that statewide average retail prices bundle everything. Do not use 15.04 cents as SOS, and do not use it as a supplier quote.
Read term, exit fees, and renewal. If the rate is variable or introductory, assume you will still be on the plan when the market is unfriendly, because that is when you will notice. If your lease ends in eight months, a 24-month contract with a termination fee is a different product than a 12-month fix.
Map the default. SOS is the statewide concept for customers who have not chosen. A county CCA, if it launches on an opt-out basis, can sit on top of that concept for people who do not opt out. EPA’s CCA page is the national description; your county clerk or utility is the local one.
If you want renewable supply above the legal RPS floor, demand certificate mechanics, not adjectives. EPA and DOE both treat attributes as a tracking problem. “100% renewable” without retirement language is incomplete.
If someone switches you without a signed contract or a contract summary, that is not a clever market. Maryland has already punished that pattern in the retail energy channel. Reversing a slam is a complaint process, not a shopping strategy.
None of this requires you to become a wholesale-market hobbyist. Maryland’s choice design, unlike ERCOT’s, still offers a default that is auction-procured and term-smoothed. Shopping is optional. Doing it well is a small pile of arithmetic plus a refusal to confuse a supply teaser with the bill you actually pay. If a plan still looks good after that, enroll. If it does not, staying on Standard Offer Service is not a failure to participate. It is using the product the auctions were built to provide.