When you flip the light switch, you expect your lights to turn on. You’re probably not thinking about what happens behind the scenes until you experience an outage. That’s when you begin to wonder: how does energy really work?
Understanding the energy lifecycle can help you make smarter decisions, manage your budget, and even save money. Getting energy to your home or business involves several key entities, including energy suppliers, grid operators, regulators, legislators, and of course, you, the customer. But who’s who, and what role do they play?
Energy Generators
At Pepco, we do not generate electricity.
That’s where energy suppliers — or generators — come in. These companies own and operate power plants that generate electricity using a variety of sources, including nuclear energy, renewables like solar and wind, and fossil fuels such as natural gas and coal. Once generated, this electricity is sold to utility companies or directly to you, the customer.
In deregulated energy markets, you have the option to stick with the default supply rate secured by Pepco or explore customer choice. This allows you to compare rates from alternative energy suppliers and select the one that best meets your needs.
Regardless of which supplier you choose, the cost of your electricity supply will still appear on your Pepco bill, and that charge is passed directly to your chosen supplier.
Learn how to choose your energy supplier here.
Grid Operators
Once electricity is generated, grid operators control and monitor its movement from power plants to Pepco’s distribution system. A grid operator plays a key role in transmitting electricity over long distances from power plants over high-voltage transmission lines and towers, keeping the power system stable and running smoothly. It also plays a key role in ensuring energy is available through future grid planning.
In our region, PJM Interconnection (PJM) handles these responsibilities. PJM balances supply and demand in real time, coordinates energy markets, and maintains grid stability. Additionally, PJM must adhere to state requirements on what types of energy are produced and purchased. This ensures that the energy mix aligns with state policies and goals, including the integration of renewable energy sources.
The efficiency of PJM can directly affect the reliability and affordability of power. A well-maintained grid reduces operational costs, minimizes disruptions, and supports modernization efforts as the energy industry transitions toward cleaner, more sustainable sources.
Pepco
Pepco is responsible for safely and reliably delivering energy to your home or business. This includes maintaining power lines, substations, and transformers. In Maryland, utilities operate under exclusive control to ensure efficient infrastructure and service delivery. The Public Service Commission (PSC) oversees these utility providers to ensure fair rates, prevent abuses, and protect consumer interests.
Pepco strengthens the local energy grid through infrastructure upgrades and smart technologies. In fact, over the past decade, ongoing investments in the local energy grid have driven a 57 percent decrease in the frequency of electric outages. We continue to modernize equipment, rebuild distribution lines, and install smart technologies to help detect and respond to issues more quickly. These improvements increase reliability and support clean energy adoption, including solar power and electric vehicles.
The PSC sets and adjusts rates, monitors service quality, and promotes transparency and accountability within the utility sector. By investing in innovation, infrastructure, and sustainability, we are building a smarter, stronger, and cleaner energy system for our customers and communities.
Pepco is proud to deliver more than just energy.
Regulators
Regulators are essential to how energy is produced, delivered, and priced. Since most utility companies lack competition, state regulators set rules to protect consumers. Regulators approve or deny utility rates, ensuring they are fair and reasonable while allowing utilities to cover costs and invest in critical infrastructure. They also require utilities to maintain safe and reliable service, modernize outdated systems, and adopt new technologies.
Pepco operates in Montgomery and Prince George’s Counties in Maryland and the District of Columbia, regulated by their respective Public Service Commissions (PSC). In Maryland, the PSC oversees Pepco to ensure fair rates and protect consumer interests. Pepco’s infrastructure upgrades and smart technologies have significantly reduced electric outages over the past decade. The PSC sets and adjusts rates, monitors service quality, and promotes transparency and accountability.
In the District of Columbia, the DC PSC regulates Pepco’s operations, including the administrative charges for its Standard Offer Service (SOS) program. Pepco obtains electric supply for SOS customers through a competitive wholesale procurement process and submits the retail SOS rates, including administrative charges, to the DC PSC based on the winning bids.
As the energy industry moves toward renewable and cleaner sources, regulators help guide that transition while keeping the grid stable. Their oversight ensures that customers receive safe, dependable, and fairly priced energy, both now and in the future.
Learn more about utility regulations and the regulators in District of Columbia and Maryland.
Legislators
Legislators play a critical role in shaping the present and future of energy policy. They write and pass laws that influence everything from renewable energy targets and emissions standards to grid modernization, infrastructure investments, and programs that help low-income households. Legislators also work with regulatory bodies to oversee utility performance and ensure accountability.
Customers
Everything we do, from enhancing grid reliability to investing in cleaner energy solutions, is done with you, our customer in mind.
We’re committed to helping you make informed choices by offering digital tools and resources that put energy knowledge in your hands. By visiting your Pepco My Account page, you can learn how to save money and energy through these tools:
- Hourly usage feature to identify and adjust high energy use times.
- High usage alerts to get notified when usage exceeds set levels.
- See projected monthly bill to view estimated bill anytime based on current usage.
- Receive home energy reports and tips for customized energy-saving tips.
We offer a suite of energy efficiency programs in Maryland for your home and business that can be found here: pepco.com/WaysToSave. Some programs are:
- Quick Home Energy Check-ups offer no-cost visual walk-throughs, energy-saving product installations, and a customized report.
- Home Performance with ENERGY STAR® offers an in-depth home assessment with up to $10,000 in rebates for upgrades.
- Old Applicance Recycling offers $50 for recycling an old refrigerator or freezer, plus no-cost for pickup.
- Small Business Quick Energy is complementary for small businesses, providing energy-saving recommendations and device installation.
When you have the tools, knowledge, and support you need, we can work together to build a better energy system for you, your family, and our community.
For a full list of energy assistance and energy efficiency programs, visit Pepco’s new bill support page at pepco.com/BillSupport.
Bringing It all Home (or to your Business)
The energy system is powered by collaboration. Energy suppliers generate electricity, grid operators manage its movement, utility companies deliver it, regulators ensure fairness and oversight, and legislators shape the policies that guide it all. At the center of this system is you, the customer.
Understanding how energy works empowers you to make choices, whether it’s switching suppliers, reducing energy use, supporting clean energy initiatives, or advocating for policy changes.
Pepco is proud to deliver more than just energy. We’re here to provide peace of mind, the power you can rely on, and confidence in a more sustainable tomorrow.
Learn more at pepco.com.