Third Party Suppliers

What Is a Retail Supplier?

In Maryland, you can choose who supplies your electricity or natural gas.

  • Your local utility delivers energy to your home using wires or pipelines.

  • But you can choose your local utility or a retail supplier to provide the electricity or gas itself.

  • You don’t get to choose your local utility—it’s assigned based on where you live. But you can chose your energy supplier.

What Happens If You Choose a Retail Supplier?

  • You still get your energy through your local utility’s wires or pipelines.

  • You may get one bill from your utility that includes both delivery and supply charges.

  • Or, you may get two bills, one from the utility and one from the supplier (though this is rare).

Price Differences

  • If you don’t choose a retail supplier, you will automatically get your energy from your local utility under the Standard Offer Service (SOS).

  • SOS prices are set through competitive auctions monitored by the Maryland Public Service Commission (PSC). These auctions aim to keep prices economical.

  • Retail suppliers set their own prices, which are not regulated by the PSC.

  • Retail supplier prices may be higher or lower than SOS prices, but they can change at any time, so read the contract carefully.

Things to Know Before You Sign a Contract

  • Make sure the supplier is licensed by the PSC.

  • Ask for the supplier’s license number and make sure it’s included in your contract.

  • Always compare the supplier’s price to the utility’s Standard Offer Service price.

  • Be careful of deals that sound too good to be true, some start low and increase over time.

How Retail Suppliers Sign Consumers Up for Service

Retail suppliers market to consumers in a variety of ways.

  • Some retail suppliers may try to illegally sign you up for service.

  • Be careful and do not agree to anything you do not understand. It could be a costly mistake.

  • Retail suppliers frequently charge higher prices than your utility. In particular, you should never show a supplier’s sales agent your utility bill or provide them with your utility account number or Customer Choice ID number.

  • Be aware of your rights and file a complaint with the PSC about the retail supplier if they are being deceptive.

What Should Be in the Contract

What Should Be in the Contract What to Look for and Think About
Company Name, License Number, Email, and Website Is there a Customer Service number where you can call in case you want to cancel, have questions, or want to speak with someone?
Price Structure It does not matter what the agent says; you will be held to what is in the Contract. Check to see if it is a fixed or variable rate. Is the rate only for a few months and then it changes to something higher? Variable rates are very high risk.
Cost of supplying the gas/electricity You will still need to pay distribution charges to your local utility in addition to supply charges to your retail supplier. Some suppliers also add on administrative fees which add to the overall cost.
Statement Regarding Savings The supply price may not always provide a savings.
Incentives like gift cards, credit cards, airline miles, etc. Does the incentive have real value for you in comparison with a higher rate for gas or electricity?
Contract Start Date Describes when the Contract will begin and end.
Contract Term/Length Does the Contract automatically renew? When it renews, will the supply rate change?
Cancellation/Early Termination Fees Can you cancel at any time? Are there fees that you must pay if you cancel? If you cancel, you will go back to your local utility’s “Standard Offer” price.
For families/households with more than 8 persons, for each additional person add: Provides a description of renewal terms. Will it renew at a different price?

Make sure you review, understand, and compare all these Contract terms before you agree to sign with a supplier. A retail supplier must give you a completed Contract Summary form, like the one above. Only the utility customer (or a legal representative) can enter into a Contract with a supplier. No other person is authorized to sign for a customer.

Things to Keep Mind About Retailer Supplier Pricing

  • Variable rates are high risk. The Contract must say what, or if, there is a cap on the variable rate. You should check your bill each month for the supply rate or total bill, and compare it with your local utility’s “Standard Offer” price. If the rate or total seems too high, you have a right to cancel service with your retail supplier. Sometimes, they will offer a low “teaser” rate for a few months and then change it to a higher rate much higher than the local utility’s “Standard Offer” price. OPC has not seen variable rates go lower than the initial rate.

  • Retail suppliers may offer incentive items like gift cards, airline miles, light bulbs, etc. Make sure that this incentive provides enough value to you to possibly be paying higher supply charges for your energy services.

  • Some suppliers charge an extra monthly fee in addition to the usage rate. A fee of just $5.00 per month can be equal to another ½ cent on the kWh rate on an average customer’s electric bill.

  • Almost all fixed-rate Contracts have a cancellation fee. Sometimes, the longer the Contract, the higher the fee. If you cancel or do not renew a Contract, you will return to your local utility’s “Standard Offer” supply service unless you enter a Contract with another supplier.

  • Read the Contract in full. No matter what the agent tells you, you will be held to whatever is in the Contract.