Vol75-05 May 2025
Member newsletter for Southern Maryland Electric Cooperative
Standard Offer Service rate update
Total residential Standard Offer Service (SOS) rate for April: $0.100407 per kilowatt-hour (kWh).
The residential SOS energy charge on your bill is the cost of the electricity supply you used in that billing cycle. The cost of energy is a direct, pass-through cost; SMECO doesn’t mark it up in any way as other “for-profit” energy suppliers do.
The SOS reflects the price SMECO pays for power on the wholesale market, which is constantly shifting. In an effort to provide greater bill stability, the cooperative bills for the SOS in two parts: the Energy Charge and the Power Cost Adjustment (PCA).
The residential energy charge is a flat rate set to cover the cost of energy purchased. This number remains stable on a member’s bill and only changes when certain triggers are met.
- Winter Residential Energy Charge: $0.0854 per kWh
SMECO’s PCA is a variable rate put into place to both reflect and even out the impact of fluctuating energy prices.
- April Residential PCA: $0.015007 per kWh
The PCA for April was 17.43% greater than the current residential base SOS rate.
To ensure the flat base energy rate best reflects the wholesale cost of power to be incurred, SMECO must file with the Public Service Commission to adjust that flat base energy rate if the residential PCA is 5% more or less than the residential base rate for three consecutive months. The PCA exceeded the 5% threshold in January, February, and March, triggering the cooperative to file a request to increase the base energy rate on March 31, 2025. If approved, the revised energy charge will go into effect on June 1, 2025.*
The cost of wholesale power has risen significantly in recent months—as reflected in the PCA—and it is expected to continue to increase following a surge in capacity auction prices and a tightening margin between supply and demand.
PJM Interconnection (PJM) manages the regional power grid. SMECO actively manages our capacity demand from PJM to the extent we can, however PJM’s recent capacity auction for the 2025/2026 delivery year resulted in a significant increase when it cleared at a record-high price of $269.92 per megawatt-day, up from $49.49 per megawatt-day in the previous auction.
*The Commission approved SMECO’s request on April 30 and, as a result, the revised energy charge will go into effect on June 1, 2025.
