Standard Offer Service

Background

In all states that have restructured their natural gas or electric utility industries, except Texas, residential customers are offered standard offer service (also known as “provider of last resort service” or “default service”) when they do not select an alternative provider or select a provider who later goes out of business. In recent years, nonutility retail electric suppliers have sought to end standard offer service and force residential customers into the market, an action that consumer advocates have strongly opposed.

Standard Offer Service: Policy

Ensuring service availability

In this policy: State

State policymakers should:

  • ensure that standard offer service is always available and automatically provided to residential customers who for any reason have stopped receiving natural gas or electricity services;
  • ensure that standard offer service is stable, predictable, and affordable and is offered at rates that are cost-based, just, and reasonable ;
  • ensure that standard offer service includes the same consumer protections that historically have been provided by traditional gas or electric utility service to these customers prior to restructuring;
  • reject proposals to offer variable standard offer service linked to short-term wholesale market prices or other volatile pricing strategies; and
  • reject proposals to eliminate standard offer service and require consumers to choose a supplier.