How will SMD affect the retail market?
In the very near-term, the retail market will not be affected by the implementation of SMD. Every state, with the exception of Vermont, has “standard offer,” or transitional pricing in place that dates back to the beginning of retail access. Under standard offer, consumers pay a set price regardless of the “true” cost of energy. This offers consumers insulation from near-term price increases. In the longer-term, standard offer will expire in each state. The regulators and/or legislators within each of the states must then determine how retail pricing models will change. In the wholesale market, ISO New England expects to see wholesale prices decrease in most areas, but increase in areas that are afflicted with transmission congestion.
