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There has been lots of confusion resulting from the withdrawal of certain third-party energy providers from the market in Maryland, so we’re going to break it down.
Certain Maryland retail suppliers are in the process of exiting the market because of a recent bill that protects consumers from price hikes and requires more transparency in green energy.
SB1 is a Maryland law that was passed during the 2024 Session at the Maryland General Assembly and went into effect July 1, 2024. It changes how retail energy companies sell electricity and gas, altering rules relating to the marketing and sale practices of retail electric and gas suppliers. As such, any business unwilling to abide by the new rules in place to ensure that energy suppliers treat customers fairly and protect people from unfair business practices must exit the Maryland market.
Some of the protections in place with SB1 include:
Energy salespeople must be licensed by the Maryland PSC starting July 1, 2025
Starting January 1, 2025, energy suppliers can’t charge customers more than the trailing 12-month average electricity SOS price or default gas commodity price
Customers can choose to stop getting marketing calls from energy suppliers by joining a “Do Not Transfer List”
Suppliers can’t say their electricity is “green” unless it meets certain requirements
Suppliers must renew their licenses every three years so the PSC can keep track of them
Why is this important?
If you were benefitting from your third-party energy services, we understand that this seems like a bad thing. However, the bill that caused these changes is intended to protect consumers from predatory practices, which is great news for Maryland residents overall. According to the U.S. Department of Energy, the average customer in 2022 paid 50 percent more for their electricity by using a retail supplier. Third-party energy can lead to savings in some cases, but it can also put customers in a situation where they get “bait and switched” where the supplier entices a resident with a low rate at first and then hikes up the price. Before SB1, there was no law protecting consumers from that.
“What is clear is hundreds of thousands of Marylanders are paying more than $150 million more than they would’ve over the course of a year,” said Senator Malcolm Augustine, the lead sponsor of Senate Bill 1, meant to combat this.
Although the bigger companies being affected by the bill tried to prevent and later repeal this change, legislators are holding strong.
You may have received a letter from your third-party supplier notifying you that it is terminating its contract with you due to the new law passed in Maryland. Because of this change, your supplier rate will now default to your utility’s standard offer rate. For further information, we recommend reaching out to your utility provider directly.
It does NOT affect your community solar subscription. You will still receive the community solar credits generated by your share at your guaranteed discount. Laurel Peltier, a local energy justice advocate, educator, and writer in the Maryland area (who happens to be one of our community solar subscribers) recently wrote a piece titled, “How to How to Buy “Green Electricity” for Your Maryland Home After SB1” if you want to explore your options moving forward.
This bill is intended to protect consumers by regulating the predatory practices of energy providers in a deregulated market. Third-party suppliers have been found to target the lowest-income neighborhoods and charge the highest rates to Hispanic, Black, and immigrant families in this 2022 Berkely Energy Institute Report. These practices have taken advantage of communities that are already the most heavily disadvantaged by the impacts of climate change, despite contributing the least to fossil fuel emissions. We support any regulations that protect consumers from harmful practices, especially when we are still seeing the distrust caused by historically predatory practices today in our community solar work.
If you have friends or family who can no longer access their clean energy source due to these changes, now is a great time to refer them to community solar. Subscribers can log in to the MySolar portal to refer friends and neighbors using a referral code to get extra rewards and increase their positive impact by helping to grow our solar community.
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