Whether you own a small business, condo, or co-op, if you are currently receiving your electric supply from Pepco, it’s time to start preparing your budget for a price increase this month or consider exploring alternative options with third-party electric suppliers. Better yet, why not install a solar PV system and enjoy a flat rate of 0¢ per kilowatt hour for your electricity needs?
Unlike Washington Gas, which updates its Standard Offer Service rates on a monthly basis, Pepco resets its supply rates only once a year. As a result, this annual adjustment has a significant impact on the personal and business expenses of local ratepayers.
Largest Determinants of Electric Rates
The primary factor influencing electric rates is the wholesale price of natural gas. Last year, many industry professionals anticipated a substantial price hike in Pepco’s SOS rates following Russia’s invasion of Ukraine. Gas price futures were trading at a rate four times higher than what we see today. Given this context, the less than 3% increase in Pepco’s rates in 2022 was quite surprising to us at Honeydew. Our analysts suspect that today’s sharp uptick is Pepco’s attempt to recover losses from the past year. Considering the recent consolidation of local utilities and the costly distribution and renewable generation incentives, we anticipate this trend to persist.
For an overview of Pepco SOS pricing in the past three years across the three main smaller rate classes in DC, please refer to the summary table below.
Fortunately, as we always emphasize to our clients, while Pepco holds a monopoly on electric distribution charges, they do not have a monopoly on electric supply rates. Honeydew can assist you in finding the most competitive third-party electric rates available in the market. Electric rates for individual properties are influenced by various factors, including load profile (electric usage patterns throughout the day), location, rate class, and peak demand. In general, we have observed that third-party suppliers can now offer a significant discount compared to Pepco’s current rates.
Solar PV: The Best Protection Against Rising Electric Rates
Furthermore, it would be remiss of us not to mention the advantages of owning a solar PV system or participating in a solar Power Purchase Agreement. Thanks to the exceptional solar incentives in DC, both options allow ratepayers to pay little to nothing for their electricity while safeguarding against future rate increases for a span of 20 years.
In conclusion, the recent surge in Pepco’s Standard Offer Service rates is likely to impact small businesses in DC. However, exploring alternative electric suppliers or investing in solar energy solutions can offer relief from these escalating costs. Contact Honeydew today for assistance in navigating the electric supply market and taking advantage of renewable energy options that can benefit your business, condo, or co-op.
