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Third-Party Energy Suppliers in the District

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What is an energy supplier?

The District’s energy market is deregulated, which means customers can choose to buy energy from different providers. As the public utility, Pepco acts as the Standard Offer Service (SOS) Administrator for the District, which means Pepco will supply customers’ home electricity at a rate set by the Public Service Commission (PSC) by default, unless customers decide to sign up with another supplier. A third-party energy supplier is an entity other than the SOS Administrator that generates electricity; sells electricity; or purchases, brokers, or markets electricity for sale to customers. There are many reasons customers might choose a third-party supplier, including a guaranteed clean energy supply, “signing” bonuses and promotions, and, in some cases, cheaper electricity costs. This guide is designed to help customers select the best energy supplier based on their preferences.

How should I compare price offers from third-party energy suppliers to the SOS?

Customers should carefully consider energy supply price quotes from third-party energy suppliers before contracting with them to buy energy. Customers should be sure to read terms and conditions, which should address the following questions:

  1. What is the quoted supplier cost of energy per kilowatt-hour (kWh)?
  2. How long is this price good for?
  3. Are there any other fees and/or costs for this service?

Once these questions are answered, customers should compare the quoted supply cost from the third-party supplier to the SOS price, which is referred to as the “price to compare,” to ensure they are getting a good deal. Pepco publishes its  current SOS price on its website as well as on customers’ energy bills. Customers should weigh any benefits they perceive from switching to a third-party provider against any change in the price of electricity and the conditions of its supply.

The quoted price is lower than the SOS! Should I sign up?

That’s great! Sounds like a deal, but not so fast. After comparing the price, it’s important to consider how long the price is guaranteed. Some third-party suppliers will guarantee a certain price for a certain amount of time. This guaranteed price period is completely dependent on the terms and conditions of the offer that customers receive from a third-party provider.  Following the guaranteed price period, third-party suppliers may increase the price of providing service. Some third-party suppliers change prices without advanced notice, which can cause the cost of energy bills to increase significantly and unexpectantly.

But I can always just go back to the SOS if the price goes up, right?

Absolutely! As noted above, customers can choose their energy suppliers – whether that’s the SOS or one of several third-party providers. However, it’s important for customers to be aware that if they decide to switch to a third-party provider, they are signing a contract, which may have cancelation fees associated with it. Customers should always carefully read and agree to the terms of the contract before signing.

What about distribution costs? Do I still have to pay those?

Yes, customers, no matter if choosing SOS or third-party supplies, must pay the same electricity distribution costs. Distribution costs are included in the total balance due on all customers’ monthly electricity bills. To better understand these charges please review the Office of the People’s Counsel’s “How to read your electric bill” diagram:

How can I get help with utility bills?

DOEE has several resources to help qualifying residents lower their monthly bills, pay off debt, and avoid disconnection. For more information see the DOEE's on Utility Affordability Programs.

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