Baltimore: Why is this happening and what factors led to it? Was this the desire of the government or the utility companies or some combination thereof?

Glenn Ivey: It's happening now for a variety of reasons. First, we wanted to give customers in Maryland the chance to choose who supplies them with electricity. Second, neighboring states in our region either have implemented choice or are moving towards it rapidly. So it was important to move towards competition to avoid putting Maryland businesses at a competitive disadvantage with companies in states with choice. Third, we considered the opportunities for the government to save tax dollars via choice. In other words, we expect the Maryland state government (and county governments as well) to be able to save millions of tax dollars by aggregating load, and accepting competitive bids from suppliers.

The business community -- especially those companies that use large amounts of electricity -- was most interested in retail choice. State and local governments are now taking advantage of the new choices that are available.

Takoma Park, Maryland: One of the possible choices in electricity is onsite generation. What steps do you think are needed by the MPSC to ensure that customers (large and small) will be able to choose to generate their own power, including siting, permitting, and interconnection to the grid?

Glenn Ivey: If you mean self-generation that is for your own use only, then permits from the PSC are not necessary (though you would still probably need a permit from the Department of the Environment).

If you mean on-site generation that the owner might intend to sell to others, then the current certification process would still be appropriate. That entails MDE and DNR getting permits for siting and environmental factors (they would appear before the PSC for a hearing). For interconnection, you would have to go through the PJM process. PJM is the manages the grid for the mid-Atlantic region.

Montgomery Co.: Sir,
When will this choice be presented, how wide-ranging will it be and how much time will I be given to choose?

Glenn Ivey: You can sign up with an electric supplier now, but they will not begin to supply electricity until July 1. Of course, you choose to stay where you are at this time and make a decision later.

The range of choices will be driven by the market. The Commission has licensed about 10 suppliers at this time, and we expect to act on other applications in the near future.

Chevy Chase, MD: Electric choice begins on July 1. As a residential customer, I have not received any offers, nor any marketing mail or phone calls. Given the low shopping credit in the PEPCO service area, do you think there will be any competition for the residential customer in either the short term or long term?

Glenn Ivey: I expect it will take some time for a competitive market to develop. In natural gas, for example, companies marketed smaller areas at first and then broadened their scope. That will probably be the approach used for electricity as well.

Moreover, it appears that suppliers may not begin to market aggressively until after the "peak" months of summer have passed. Some have expressed concerns about the volatility of wholesale rates and may wait until the fall before they wade in to the PEPCO market.

Ultimately, I think it is more likely that there will be competition in the PEPCO region because the company is selling its generation assets, and so there will be little concern about market power undermining comepetitive suppliers.

Germantown, Maryland: In what way (s) will MPSC be of assistance regarding electric choice? To what extent?

Glenn Ivey: We have a consumer education campaign underway that includes extensive use of print and electronic media. We also have a call center that can help answer questions. You can reach them by calling 1-800-800-4491 or you can contact our website at www.md-electric-info.com.

Finally, we have an extensive outreach effort using community institutions (churches, community associations etc.) to reach customers at the grass roots level.

Bethesda: Glenn,
Thank you for taking questions, and mine is this: If I don't make a selection will one be made for me? Is a "default" process in place?

Glenn Ivey: Thanks for the question.

If you don't choose another supplier, you will receive what we call "Standard Offer Service," from your current utility (PEPCO). That means you would receive a 7% reduction in your rates. You would also be able to choose an alternative supplier later, if you desired to do so.

Santa Fe, New Mexico: What steps are you taking to prevent the incumbent utility from exercising monopolistic market power for the first years of deregulation?

Glenn Ivey: Excellent question.

We have four investor-owned utilities in the state. Each company has a settlement agreement that contains provisions aimed at preventing the exercise of market power. Three companies will transfer their generation assets to an affiliate, and there is a code of conduct which governs the interaction between the affiliate and the utility. The fourth company will sell its assets on the market.

In addition, our statute permits the Commission to conduct a market power review to ensure that no improper conduct is occuring that might undermine the development of the market here.

There are other mechanisms in place for individual companies.

Chevy Chase, MD: What is the status on introducing competition into the customer care functions such as metering, billing, or customer service?

Glenn Ivey: Competitive billing will begin on July 1, 2000.

Competitive metering will begin on July 1, 2001 (I believe!)

I'm not sure what you mean by competitive "customer service."

Prince George's County, Maryland: Will I receive one or two electric bills?

Glenn Ivey: That will be your choice. You could receive a single bill from your utility, or from you electric supplier (if it offers that option). On the other hand, you could receive two bills, if you so choose.

If you stay on standard offer service (i.e., if you do not choose a new supplier), then you will continue to receive one bill.

Moderator: What will happen to municipal electric utilities?

Glenn Ivey: Municipal utilities do not have to participate in choice, and none have applied to do so at this time. I think the General Assembly carved out an exception for municipals because of their size and because they already act as aggregators (with relatively low prices).

Washington: Ive been hearing a lot about alternative fuel sources which may become available to consumers under deregulation, such as fuel cells? When will this happen, for how much, and where can I look for such alternative sources?

Glenn Ivey: This is an area that is evolving fairly rapidly. The Maryland Energy Administration is looking into alternative ways to encourage this type of technology, but no concensus has been developed at this time.

If by "alternative sources" you mean "green power," we hope competition will attract green suppliers to Maryland. Pennsylvania has had a good experience with residential customers choosing green sources, and I hope we can replicate that here.

Bel Air, MD: BG&E seems to have received a very good deal, to the detriment of its customers, in the way rates were established. As a result, the costs charged to other suppliers seems to be significantly higher than other states. Please explain why Maryland's distribution charges are so high.

Glenn Ivey: Great question.

We faced a choice on the "shopping credit" issue that came down to this: since Maryland did not have very high electricity rates, the only way to really establish higher shopping credits would have been to raise rates for residential customers. This would have violated the law the General Assembly passed (which called for rate reductions). We chose, instead, to lower rates for residential customers (between 6 and 7 percent, depending on your service area) and to have higher shopping credits.

By the way, the shopping credit in the BGE area will increase over time, thus making it easier for suppliers to compete.

Alexandria, Va.: How confident are you that prices will drop as a result of competition?

Glenn Ivey: Prices will be reduced immediately as part of the settlements. The market dynamics will take time to evolve, but it appears that competition will drive rates down over time (3-5 years).

I also hope that we are able to implement other tools to reduce rates, such as aggregation (buying in groups). That already appears to be working at some levels. The Montgomery County and Prince George's Couty governments are reducing their electric costs in this way. The state government will follow soon.

Towson,Md.: My understanding is that Maryland residents will have the option of dealing with out of state companies so long as their states offer competitive markets. True?

Glenn Ivey: As long as the supplier is not based in a contiguous state it can provide service in Maryland regardless of that state's market. Suppliers in contiguous states that have choice may also provide service in Maryland. It appears that all contiguous states either have retail choice or will have retail choice in the near future.

DC: The introduction makes mention of new technologies providing more benefits. Please expand on that. Thank you.

Glenn Ivey: One possibility involves renewable sources of energy. Neighboring states like Pennsylvania have programs aimed at testing the viability of renewable sources like wind and solar. We are currently looking at this issue closely and will submit proposals to Annapolis soon.

Other new technologies include fuel cells (discussed above) and distributive generation (microturbines that produce smaller amounts of energy than traditional generators, but are more efficient and environmentally friendly).

Washington, D.C.: Will the District be following suit? Are you able to offer any information about that?

Glenn Ivey: I believe the District is considering legislation at this time. My sense is that they will also offer retail choice in the near future, but I don't believe a final determination has been made there yet.

Chevy Chase, MD: What is the status of the divestiture of PEPCO's powerplants? Are they being sold to one purchaser or are they being sold in groups to reduce market power?

Glenn Ivey: I believe PEPCO has already sold one unit, and they received bids yesterday for the remaining units. The decision will be made later by the bidders and the stakeholders in Maryland as to whether it is best to sell the units as a block or not. Given the sale, market power should not be much of a problem, even if one buyer is selected (since the units would be completely separated from the former monopoly company).

Glenn Ivey: Thanks for the interesting questions and thank you to washingtonpost.com for this opportunity.

Moderator: Our thanks to Glenn Ivey, the Maryland Public Service Commission and all who participated.