SB1 Institutes Price Cap, Requires Individual Sales Agent Licenses and Bans Residential Sales Commissions
(Harrisburg, PA and Annapolis, MD) May 9, 2024 — The Retail Energy Supply Association (RESA) and its members are disappointed that Maryland Governor Wes Moore signed Senate Bill 1 (SB1) today. Residential electric suppliers that serve Maryland customers will face untenable business conditions in serving new residential customers, attracting and retaining employees, and offering energy savings for longer than 12 months at a time to Maryland customers.
“Governor Moore’s decision not to veto SB1 is unfortunate and disappointing,” said Tracy McCormick, executive director of RESA. “Despite our best efforts to work with legislators and regulators on this bill’s language, our collective concerns were disregarded. Energy suppliers who stay in the Maryland residential market will have to find a way to conduct business, if possible, with legislation that makes very little sense.”
The new law, positioned as a consumer protection bill, includes a number of provisions restricting the retail energy market. Beginning July 1, 2025, residential electric suppliers will only be allowed to offer electricity, except green energy, as defined in SB1, at a price that is less than the prior 12-month utility standard offer service (SOS) rate. Residential electric plans may not exceed a 12-month term, which means if a consumer finds a rate they want to lock in for longer than one year, they no longer have the option to do that.
The new law also requires all energy salespersons to hold a Public Service Commission (PSC) individual license to sell retail energy products or services, even though the suppliers themselves are already licensed and can be held responsible for their agents’ behavior by the PSC. The bill also prohibits residential retail suppliers from paying a commission (or any other incentive-based compensation) to an energy salesperson for enrolling new customers. These provisions represent significant government intrusion into the operations of competitive businesses seeking to serve customers in the state and will discourage retail suppliers from seeking to employ Marylanders.
“The impetus behind SB1 may have been to remove bad actors from Maryland’s energy marketplace, but instead, it will ultimately force good and reputable companies to transition their operations out of Maryland,” said Frank Caliva, RESA’s national spokesperson. “The passage of the bill has left our members at a crossroads, with the options of either exiting the Maryland marketplace, discontinuing any further investments in Maryland, or abandoning service to residential customers. SB1 will ultimately lead to the loss of jobs for Marylanders, loss of revenue and tax dollars for the state, and loss of choices for consumers. It’s a detrimental proposition for everyone involved.”
“IGS has invested millions in developing solar projects throughout the state, and passage of SB1 signals to us that we will not be investing further in Maryland,” said Scott White, president and CEO of IGS Energy.
Throughout the General Assembly’s recently concluded session, RESA’s legislative testimony and public statements, as well as those of our members, have maintained our position that consumer protection and industry accountability are paramount. RESA’s principles include a strict compliance policy with federal and state laws and advocates for fair and transparent business practices. Furthermore, RESA has publicly supported the PSC’s enforcement actions to eliminate chronic, intentional offenders, as well as various consumer protection and educational legislation passed by the Maryland General Assembly in previous years. Our commitment to strengthening better business practices and consumer protection enforcement with state lawmakers remains steadfast. RESA remains disappointed with the passage of SB1, however, as the new law will not advance consumer protection but rather eliminate consumer choice.
ABOUT RESA
The Retail Energy Supply Association is a broad and diverse group of retail energy suppliers who share the common vision that competitive retail electricity and natural gas markets deliver a more efficient, customer-oriented outcome than a regulated utility structure. RESA is devoted to working with all stakeholders to promote vibrant and sustainable competitive retail energy markets for residential and industrial consumers. For more information, visit resausa.org. Follow RESA on LinkedIn, Facebook and X (Twitter).
MEDIA CONTACT: Stacey Gaswirth, 214.213.4675, Press@resausa.org
