Most Southern Maryland electricity consumers will see a 6 percent rate decrease at the beginning of 2001 and will be able to switch electricity suppliers about two years from now, utility executives said Tuesday.
Even as the dawning era of electricity deregulation brings such changes, the Southern Maryland Electric Cooperative will remain the power distributor for most of the region's residents, its executives said.
Should the cooperative's customers choose to buy electricity from a competing source, they still will receive a single monthly bill from the cooperative, its officials said.
The cooperative, which is owned by its customers, serves 106,600 homes and farms and 9,900 businesses. It supplies power to all of Charles County and St. Mary's County, to parts of southern Prince George's County, and to all of Calvert County but the northeastern tip, where 5,000 customers buy electricity from Baltimore Gas and Electric Co.
Cooperative executives appeared Tuesday before Charles County commissioners, who had asked them to explain what changes may result from electricity deregulation approved earlier this year by the Maryland General Assembly.
Deregulation is to begin taking effect next year. Changes phased in over three years will drastically alter a decades-old landscape of power suppliers serving territory where they have a monopoly.
Consumers, whether modest households or power-hungry factories, will be able to buy electricity from competing utilities, including those outside Maryland. Maryland's power companies get tax relief and flexibility to compete with each other and with out-of-state electricity suppliers.
Most customers of the Southern Maryland Electric Cooperative will gain the option of choosing their electricity supplier sometime between July 1, 2001, and Jan. 1, 2002, said Mark A. MacDougall, a vice president of the cooperative.
The cooperative's largest customers will be able to shop for electricity suppliers on Jan. 1, 2000, MacDougall said. There are at least 62 such customers, including 17 government installations that include such facilities as high schools and sewage plants, said Jan Penn, a spokeswoman for the cooperative.
Customers also have the choice of doing nothing, and leaving the cooperative as their power supplier.
The Southern Maryland Electric Cooperative does not produce power, but distributes electricity that it buys through large wholesale contracts.
Should customers switch suppliers, the cooperative would move the power over its lines from the third-party source to a home or business in Southern Maryland, and would collect a fee for doing so.
MacDougall said it matters little to the cooperative where customers buy electricity. Under its wholesale purchase contract, the cooperative pays the same rate regardless of how much electricity it buys, he said.
The cooperative earlier this year agreed to pay $26 million to cancel a longstanding electricity supply agreement with the Potomac Electric Power Co., or Pepco. The relationship, which had endured since 1945, is to end Dec. 31, 2000.
To replace it, the cooperative forged a new four-year contract that will save it more than $100 million in electricity purchase costs, allowing the 6 percent rate decrease that is to begin Jan. 1, 2001, MacDougall said. The new contract is with Pepco Services Inc., a company that is associated with Pepco.
Charles County commissioners welcomed MacDougall's assurances but remained cautious.
Commissioners President Murray D. Levy (D-At Large) said rates have risen for small users in some states that have deregulated their electricity markets.
"Nobody knows what's going to happen in the end," Levy said.