PSC Approves Phase II Settlement Agreement Regarding Standard Offer Service In Case No. 8908
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October 1, 2003
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MD PSC Approves Phase II Settlement Agreement Regarding Standard Offer Service In Case No. 8908

Baltimore, MD - The Maryland Public Service Commission has issued Order No. 78710, approving the Phase II Settlement regarding Standard Offer Service (otherwise known as SOS) in Case No. 8908. This Order builds on the Phase I Order issued in April, which established the policy framework that requires electric utilities to continue to provide electric supply to customers who do not choose a competitive retail supplier. This Phase II Order approves the technical details that support the SOS policy framework. The Commission concludes that the Phase II Settlement will help bring stable market-based retail electric supply rates to Maryland ratepayers. The Commission believes Phase II produced a reasonable and workable wholesale procurement process. The Commission will oversee the entire process and ensure that for all wholesale market participants it is implemented in a fair and consistent manner.

The policy framework provided for a competitive wholesale supply procurement process. Phase II establishes a Request For Proposals (RFP) procurement methodology structured as multi-round bidding processes. Each of the four utilities will conduct separate, yet simultaneous bidding processes under identical rules and schedules. Each of the four investor-owned utilities in the State: The Potomac Edison Company, d/b/a Allegheny Power, Baltimore Gas and Electric Company, Potomac Electric Power Company, and Delmarva Power & Light d/b/a Conectiv Power Delivery will issue RFPs for full-requirements, wholesale electric supply to meet their SOS obligations. The bidding rounds are scheduled to begin in February and conclude in March. Supply services under these contracts will begin as early as June 1, 2004. Approximately, 6,200 megawatts (MW) will be bid. A joint-utility pre-bid conference will be held on October 29, 2003, at the Marriott Waterfront Hotel in downtown Baltimore.

Chairman Kenneth D. Schisler states, "The Phase II Settlement is designed in a manner that should attract multiple wholesale suppliers to the Maryland market. True market-based supply rates for SOS customers will be the result of this process. This, in turn, should enable an equal footing for retail competitors to come into Maryland and participate in creating a robust electric retail supply market."

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