Washington, D.C., Offers Freedom of Choice for Energy Supply
Our nation’s capital is home to many institutions of freedom, both in terms of their physical manifestations and the concepts that give meaning to our democracy. It only makes sense that the energy market in Washington would walk the same line by embracing energy choice through deregulation.
Capitalizing on energy options in the Capital
Since 1999, D.C. residents have been able to make their own decision as to which electricity supplier they wish to purchase energy from. Whether that means you’d like to go with a retail supplier is entirely up to you. All D.C. residents are still able to opt into Standard Offer Service (SOS) from PEPCO if they prefer not to shop for a plan.
The same goes for natural gas customers. While residents and businesses have the opportunity to choose a competitive natural gas plan, there are options for those who are willing to forgo the potential savings for convenience. Washington Gas allows consumers to stick with a regulated rate if they so desire.
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Understanding Electricity Choice in D.C.
The District of Columbia Public Service Commission reformed the District’s electricity market to give customers a chance to save money on their electric bills by choosing an alternate electric supplier. If you reside or conduct business in the PEPCO service territory, you can shop for a cheaper electric supply rate.
PEPCO sold its power plants to open the market to competition, and now only owns the transmission and distribution wires, while also providing “backstop” power to customers who do not shop for electricity. With the move to competition, PEPCO has separated service into two parts:
- Regulated distribution of power, which is still only provided by PEPCO
- Supply of the electric commodity, which is open to competition.
Customers can choose to receive their electricity supply directly from PEPCO or an alternate electric provider.
Customers who do not choose an alternate electric provider receive default supply from the utility, or Standard Offer Service (SOS). These default supply prices change once a year. Supply for default service is bought over a period of two-to-three years (depending on customer size), with the results of the supply procurements “laddered” and blended into a single price. The end result is that the default service price may contain a risk premium in it, and also does not change to reflect lower market prices except during the annual price reset. Choosing an alternative electric supplier allows customers to receive the benefit of falling prices faster.
Customers who choose an alternate energy provider still have their power delivered to them by PEPCO and still contact PEPCO for all outage reporting. Customers may receive either a single bill from PEPCO for their delivery service and energy supply service or two bills, one from each company.
Take Control of Your Natural Gas Rates
All customers in the Washington Gas service area can elect to purchase their gas supply directly from Washington Gas or opt for a plan from a retail supplier. Established in the late 1990s and early 2000s, natural gas competition is now a permanent program in the District.
As a result of deregulation, your natural gas bills are divided into two primary components:
- Distribution charges
- Commodity charges
Distribution charges are paid to Washington Gas for transmission and delivery services. Because Washington Gas owns the natural gas infrastructure in D.C., all natural gas consumers work with the company whether or not they elect to purchase their supply from a competitive supplier.
Commodity charges represent the supply costs associated with your natural gas service. If you’ve chosen a plan from a competitive supplier, this fee will go to that company and will be based on the rate attached to your contract. If you continue on with standard gas supply service from the utility, this portion of your bill will be based on the regulated rates attached to Washington Gas service.
By choosing a competitive natural gas supplier, you may be able to save money on your energy costs. It all depends on the terms and rates attached to any given plan. According to the Washington Gas website, only 11% of residential customers in D.C. were participating in the customer choice program as of November 2013.
Whether you’re a D.C. area resident or business owner, you should consider the option of choosing a competitive rate on your natural gas supply. If you’re ready to begin exploring some of the plans in your area, simply enter your ZIP code to get started!
How to Report a Power Outage or Gas Emergency
Utilities in D.C. are still responsible for maintaining the distribution network. Contact PEPCO for power outages and Washington Gas for any natural gas emergencies, such as a leak.
Outage hotline: 1-877-737-2662
Emergency hotline: 1-800-752-7520
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