How Electricity Deregulation Works in Maryland
Maryland split electric supply from delivery under the Electric Customer Choice and Competition Act of 1999. Your utility — BGE, Pepco, Delmarva Power, or Potomac Edison — still owns the wires and handles outages no matter who supplies your power. Unlike some deregulated states, Maryland has since tightened the rules sharply: a 2024 law overhauled how third-party suppliers can price residential contracts after regulators found many customers had been overpaying for years.
1999: the year Maryland split supply from delivery
Maryland's retail electric market dates to the Electric Customer Choice and Competition Act of 1999, signed by Governor Parris Glendening. Like most restructuring laws of that era, it required the state's investor-owned utilities to separate their generation business from delivery and opened the generation side to competitive suppliers, while delivery stayed a regulated monopoly run by the incumbent utility. In the years right after passage, residential customers were kept on frozen Standard Offer Service rates — priced modestly below 1999 levels — before the market for supply was allowed to fully float.
Maryland's investor-owned utilities
Four investor-owned utilities handle electric delivery in Maryland, and that assignment never changes regardless of who supplies your power: BGE (Baltimore Gas and Electric), covering Baltimore City and the surrounding counties; Pepco (Potomac Electric Power Company), serving the D.C. suburbs including Montgomery and Prince George's counties; Delmarva Power, covering the Eastern Shore; and Potomac Edison, a FirstEnergy company serving Western Maryland. (Southern Maryland Electric Cooperative, or SMECO, also serves part of the state, but as a member-owned cooperative rather than an investor-owned utility, it follows a somewhat different regulatory track.) If you don't choose a supplier, your utility provides Standard Offer Service — the regulated default supply rate.
Why Maryland overhauled its rules in 2024
Maryland's third-party residential supplier market developed a well-documented problem: research and advocacy groups tracking the market found that residential customers — disproportionately lower-income households — had collectively paid more than $1 billion in overpayments to third-party suppliers compared to what they would have paid on standard utility rates since 2014, driven largely by "bait-and-switch" contracts that offered a low introductory rate before jumping sharply after enrollment. In response, the Maryland General Assembly passed Senate Bill 1, signed by Governor Wes Moore in 2024. The law added new supplier licensing requirements, expanded Public Service Commission oversight, increased penalties for violations, eliminated the "purchase of receivables" arrangement that had let suppliers effectively bill through the utility with less accountability, and required suppliers to be able to demonstrate real savings against utility rates rather than just advertise them.
What that means if you're shopping for supply today
Practically, this means the market you'd be shopping in today looks different from the one that drew scrutiny in the 2010s: licensing and oversight are tighter, and regulators are actively watching for the pricing patterns that triggered the reform. That doesn't eliminate the need to read a contract carefully — introductory rates, contract length, and what happens after a fixed term expires are still worth checking on any offer — but it does mean there's now a clearer regulatory backstop than there was a decade ago.
How switching actually works
To switch to a licensed third-party supplier in Maryland, you compare offers (the Maryland Public Service Commission maintains a supplier price-comparison tool), enroll directly with the chosen supplier, and your existing utility continues to handle billing and delivery, with the supplier's charges replacing Standard Offer Service on your bill. Returning to Standard Offer Service works in reverse and is always available as a no-penalty fallback — it's the regulated default, not a status you're locked out of once you've left it.
Should you shop for a Maryland supplier?
Given the state's history here, a Maryland-specific piece of advice is worth repeating: compare any third-party offer directly against your utility's current Standard Offer Service rate — not a rate from a marketing flyer — and pay close attention to whether the price is fixed for the full contract term or can adjust. The 2024 reforms narrow the room for the worst outcomes, but the fastest way to avoid an unpleasant surprise is still to read the contract terms before enrolling, not after your first post-introductory bill arrives.
Frequently asked questions
When did Maryland deregulate its electricity market?
Maryland opened retail electric competition under the Electric Customer Choice and Competition Act of 1999, signed by Governor Parris Glendening, which separated generation from delivery and let customers choose a competitive supplier.
What did Maryland's 2024 energy law change?
Senate Bill 1, signed in 2024, added new licensing requirements and Public Service Commission oversight for third-party residential suppliers, eliminated the "purchase of receivables" practice, and required suppliers to be able to demonstrate real savings versus utility rates, following findings that many residential customers had been overpaying for years.
Do I have to switch to a third-party supplier in Maryland?
No. Staying on your utility's Standard Offer Service is always available and requires no action — choosing a licensed third-party supplier is optional.
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