| 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, Washington Gas Light Company, and
Columbia Gas of Maryland, Inc. As of September 2008, the Maryland Public Service Commission (PSC) estimated that 114,937 residential customers in the State were buying gas from non-utility suppliers, up about 2 percent from the 112,286 enrolled in December 2007 but 33 percent less than the 173,282 enrolled in September 2001. However, current participation represents
about 11.2 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 2008, 12
companies have licenses to sell and/or market natural gas to residential
consumers in the State. Six suppliers provide service
to residential customers in Baltimore Gas and Electric’s service
area, two suppliers offer services to customers in Columbia Gas of Maryland’s service area, and five
serve customers in Washington Gas Light’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 PSC drafted new rules to govern competitive gas supply in August 2008 and published the proposed regulations in the Maryland Register on December 19, 2008. The rules would 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. The PSC has scheduled a rulemaking session in March 2009 to consider final adoption of the proposed rules.
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| EIA State Data: In 2007, Maryland had 1,053,948 residential and 74,856 commercial customers. They consumed approximately 84 and 71 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 $15.17 and $12.30 per thousand cubic feet, respectively.
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| Eligibility and Participation in Retail Choice
Programs: |
Eligibility and Participation by Customer Class, September 2008
|
Customer Type |
2007 Customer Total
|
Eligible September 2008 |
Participating September
2008 |
|
Total |
Percent
of 2007 Customer Total |
Total |
Percent
of Eligible |
Percent
of 2007 Customer Total |
|
Residential |
1,053,948 |
1,029,509 |
97.7 |
114,937 |
11.2 |
10.9 |
|
Commercial* |
74,856 |
76,694 |
100 |
20,797 |
27.1 |
27.8 |
|
Total |
1,128,804 |
1,106,203 |
98.0 |
135,734 |
12.3 |
12.0 |
|
*Maryland Public Service Commission eligibility and participation numbers are for "Firm Service Commercial and Industrial." The Energy Information Administration's Natural Gas Annual 2007 reports Maryland had 74,856 commercial and 1,335 industrial customers in 2007.
Sources: 2007 Customer Total: Energy Information Administration, Natural Gas Annual 2007 (January 2009). Eligibility and Participation: Maryland Public
Service Commission (March 2009).
| |
| |
Eligibility and Participation by Local Distribution Company, December 2008
|
Local
Distribution Company |
Number
of Residential Customers |
Eligible |
Participating |
Percent of Eligible |
|
Baltimore Gas and
Electric |
603,417 |
55,284 |
9.2 |
|
Columbia Gas of
MD |
28,098 |
821 |
2.9 |
|
Washington Gas
Light |
397,994 |
58,832 |
14.8 |
|
Total |
1,029,509 |
114,937 |
11.2 |
|
Source:
Maryland Public Service Commission (March 2009).
| |
| 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 December 2008, the PSC published proposed new regulations to govern competitive gas supply that would set statewide uniform standards and require LDCs to purchase receivables of competitive suppliers or adopt prorated sharing of partial payments. The PSC will conduct a rulemaking session on March 10, 2009, to consider final adoption of the proposed rules. |
Regulatory and Legislative Actions
| Legislation |
04/02 |
Utility
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 |
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. |
| |
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. |
| |
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. |
| |
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. |
| |
08/02 |
Retail Gas Sales
Service To Continue. PSC ordered utilities to continue retail
sales service (Order 77987) and stated its support of both regulated
gas service and continued development of the State's existing
competitive commodity market. The PSC directed that utility-specific
roundtables report by December 6, 2002, on specific issues
identified by the PSC, including ways to facilitate fixed-price
commodity service by licensed suppliers to low-income customers. If
roundtables are unable to reach resolution, they may file a formal
complaint or request mediation. If requested, PSC will establish
proceedings to address current customer choice issues. |
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