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Comments were filed by the Office of People’s Counsel, Pepco and RESA. 

Excerpts from RESA comments:

“These findings culminate in the following recommendation on page 29 of the Report: 

Atrium proposes a potential enhancement to Pepco’s SOS process so that the Administrative Charge is set such that it is tied more closely to competitive third-party supply pricing. For example, it could be set such that the SOS rate would equal the higher of i) the highest 12-month electric supply quote as published for the upcoming 12-month period, as can be found on www.search.dcpowerconnect.com/search-offers.  and filtered for a 12-month contract length (or other more comprehensive resource for third party supply quotes), or ii) actual incremental SOS Administrative costs, i.e., Incremental Costs, Uncollectible Expenses, Cash Working Capital, Margin, and Taxes. 

In i) above, the Administrative Charge would be the residual of the highest quoted third-party supply rate, less Pepco’s SOS generation charge and the SOS transmission charge. The Adder should then be calculated as the residual between the Administrative Charge and SOS’s incremental SOS costs. This would truly place the SOS rate on an equal playing field with third-party electric suppliers. In situations where Pepco’s SOS incremental administrative costs exceed the otherwise calculated SOS Administrative Charge, the SOS Administrative Charge would exactly equal the sum of Pepco’s incremental SOS Administrative costs, and the Adder would be zero.

Atrium summarizes on page 4 that this recommendation is “a potential enhancement to Pepco’s process so that the SOS Administrative Charge and Adder may be tied to or verified against third-party quotes to ensure that the Adder does not undercut competition.” 

“RESA continues to believe that the adder serves a vital and necessary purpose in a wholesale SOS procurement structure. Simply put, any business that must compete against a competitor that is able to offer an artificially low price cannot be expected to succeed. That is the case with the District’s electricity suppliers if they must incur costs that Pepco either does not incur to provide SOS or can collect from all customers through its SOS rates. 

Moreover, it should not be surprising that Atrium found: (1) that the adder is “quite small and inconsequential;” (2) that the adder “may not necessarily be representative of what is required to place SOS service on a level playing field with third-party suppliers;” and (3) “very little association between the third-party marketing costs, for which the Adder is established as a proxy, and the Adder itself.”9 This is consistent with the Commission’s 2017 description of the adder as resulting in only a slight increase to SOS rates and questioned whether the adder is sufficient to help electricity suppliers compete effectively with SOS.10 Recent data demonstrates that the Commission’s statement questioning whether the level of the adder was sufficient to encourage competition was legitimate; residential shopping has dipped from 15.1% in January 2018 to 10.06% in April 2025.11 

Here, Atrium’s findings shed light on why the adder was, and remains, too low. According to Atrium, the calculation of the Administrative Charge, of which the adder is the residual amount after subtracting the other components from the capped Administrative Charge, is unrelated to, and therefore not an accurate proxy for, actual supplier costs. This has resulted in an adder that is too low, which makes the SOS Administrative Charge an artificially low market price against which supplier must compete.

 Atrium’s recommended potential enhancements to ensure a more accurate adder merits Commission consideration. Using the Commission’s www.DCPowerConnect search engine, where suppliers post their available offers, allows the Commission and stakeholders to ascertain actual supplier offers and pricing. Other methods may exist that also warrant consideration to ensure: (1) a more accurate and transparent adder, assuming the Commission declines to fully unbundle Pepco’s distribution rates to properly account for SOS-related costs that are recovered through distribution rates; and (2) that the SOS rate satisfies the D.C. Code. RESA would be willing to participate in discussions or provide comments on how to ensure that the level of the adder serves its intended purpose.”

OPC’s Comments (05/19/2025)
Pepco’s Comments (05/19/2025)
RESA’s Comments (05/19/2025) 
FC1017 (02/21/2003)
(In The Matter Of The Development And Designation Of Standard Offer Service In The District Of Columbia)