Last year, the Maryland General Assembly enacted and Governor Parris N. Glendening signed into law the Electric Customer Choice and Competition Act, bringing competition to Maryland's electric industry this year. The Act empowers consumers to choose who generates their electricity. Beyond that, electric competition provides an opportunity for consumer savings and economic benefits for the state.

Currently, the electric industry provides three main services to consumers: the generation of electricity; the transmission of that electricity on high-tension power lines; and the distribution of the electricity to homes and businesses. Maryland's existing electric utility companies provide all three of these services within geographically defined service territories and are regulated by the states Public Service Commission.

Under electric competition, the three services described above do not change. What does change is that these services will no longer be bundled into one package to be provided by one company. Instead of the old arrangement, the generation component of the electric industry now will be sold in a competitive market as an individual product. And, instead of setting the rates, the Public Service Commission now takes on the role of educator to help Maryland consumers make an informed choice once the market opens to competition.

Everything else remains as is. The current utility companies will continue to be your transmission and distribution companies, and they will still be responsible for repairing poles and wires and restoring service to customers who suffer storm outages.

Competition in Maryland: How It Will Work
In the areas served by Maryland's investor-owned utilities Allegheny Power, Baltimore Gas and Electric, Conectiv and Potomac Electric Power Company customers can sign up with new electricity suppliers beginning April 1, 2000, with service provided to customers starting July 1 (for information on other areas in the state, see box). Of course, customers may choose not to choose a new electricity supplier right away.

What kind of cost savings will customers see as a result of competition? Depending on the specific arrangements with each utility, you will generally see a decrease in rates of between 3 and 7.5 percent. And rest assured: the reliability and continuity of electric service will not be affected in any way by the introduction of electric competition.

The Maryland Public Service Commission recently began an extensive public education campaign to help ensure that Maryland's residential and small business consumers have access to the information they need about the upcoming changes in the electric power marketplace. Over the next several months, the Commission will be developing brochures, consumer guides, a web site and a call answer center to help people access information when, where and how they want it.

In addition, the Commission is hoping to partner with community-based organizations throughout the state that can help educate traditionally under-served populations. To help make sure these populations don't lose out in the transition, a universal service program is in place to provide reasonable assurance that electric service is available and affordable to all residential customers in Maryland. State law, in fact, provides for the establishment and administration of a $34 million universal service fund that will help lower-income customers pay their electric bills and settle past unpaid bills.

The introduction of competition into Maryland's electric industry can create significant benefits for consumers throughout the state. It can put downward pressure on costs. It empowers consumers with the choice of an electricity supplier. It provides incentives for the creation and development of innovative products and services. It can attract new business development, retain existing businesses and enhance overall economic growth. And, finally, it can enhance the reliability of Maryland's electric supply by creating a competitive market that can bring in new generating facilities.

Robert M. Higginbotham II, Al Cappannelli
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