Pepco DC Standard Offer Service: July 2026 Commercial Supply After May Auction

What changed July 1, 2026

The DC Public Service Commission approved new Pepco Standard Offer Service (SOS) rates effective July 1, 2026 following the May 20, 2026 SOS auction [dcpsc-sos-rates]. SOS is the default supply price for Pepco customers who do not choose a third-party supplier.

Washington DC allows commercial electric choice [dcpsc-sos-rates]. Cannabis cultivators, processors, and dispensaries can compare SOS against competitive supply while Pepco continues to deliver power and bill demand charges on its delivery tariff.

SOS vs third-party supply

Component	SOS default	Third-party supplier
Energy + capacity	Pepco procured [dcpsc-sos-rates]	Supplier contract
Delivery	Pepco tariff	Pepco tariff (same)
Demand charges	Pepco tariff	Pepco tariff (same)
Customer choice	Automatic if no switch	Opt-in required

Switching supply does not affect delivery. A July SOS increase hits only customers who stayed on default. Customers on fixed supplier contracts see their contracted supply price until renewal.

PJM capacity in the SOS stack

DC sits inside PJM. SOS procurement includes PJM capacity costs in the supply price [pjm-capacity-2026-27]. The 2026/27 delivery year cleared at $329.17 per MW-day ($120,147 per MW-year cap) [pjm-capacity-2026-27].

That capacity cost flows into SOS rates set at the May auction [dcpsc-sos-rates]. Cultivators on SOS felt the capacity step on July bills. Cultivators on third-party contracts depend on whether capacity is fixed or passed through in their agreement.

Worked example: DC cultivation facility

Assume a 15,000 sq ft indoor grow in DC at 300 kW peak and 360,000 kWh monthly use. Illustration only.

Line item	SOS (illustration)	Fixed supplier at 11.5¢
Supply (360,000 kWh)	$43,200 (12.0¢) [dcpsc-sos-rates]	$41,400 (11.5¢)
Delivery demand (300 kW x ~$22/kW)	$6,600	$6,600
Delivery energy (360,000 x ~$0.04)	$14,400	$14,400
Monthly total	~$64,200	~$62,400

Savings depend on the competitive quote received. Delivery lines are identical. The value of switching is supply-side only.

EIA reported DC average commercial price at 16.47 cents per kWh all-in in mid-2026 [eia-epm-5-6-a].

Commercial rate classes in DC

DC cannabis facilities typically land on Pepco GS-1, GS-2, or GT schedules depending on demand level [dcpsc-sos-rates]. Dispensaries with lower peak demand may be on GS-1. Cultivation facilities with multi-room lighting often exceed GS-2 thresholds.

Confirm your schedule on the bill header before comparing SOS to supplier quotes. Rate class determines demand charge exposure on the delivery side.

Timing the switch around SOS resets

SOS rates change when the DC PSC approves new auction results [dcpsc-sos-rates]. The July 1, 2026 effective date follows the May 20 auction. Plan supplier switches 30 to 60 days before SOS resets to avoid gap months on default.

Event	Date
May 20, 2026 SOS auction	Procurement completed [dcpsc-sos-rates]
July 1, 2026 SOS effective	New default rates live [dcpsc-sos-rates]
Next auction cycle	Monitor DC PSC SOS page

If your third-party contract expires in August, you may briefly return to SOS at the new July rate unless you renew early.

Delivery rate uncertainty: FC1176

Pepco's multiyear rate plan was vacated by the DC Court of Appeals in proceeding FC1176 [dcpsc-sos-rates]. An evidentiary hearing was scheduled for October 13 through 14, 2026. Delivery rates may change independently of SOS supply resets.

See Pepco DC multiyear rate plan vacated for delivery case context. Supply and delivery proceed on separate tracks.

What DC cannabis operators should do

1. Pull July 2026 bills and note the SOS supply rate per kWh [dcpsc-sos-rates].
2. Request competitive supply quotes for 12 or 24 months.
3. Compare all-in supply against SOS, including capacity pass-through terms.
4. Track FC1176 for delivery-side changes [dcpsc-sos-rates].
5. Manage peak demand to control delivery charges regardless of supply choice.

See how to switch electricity suppliers in Washington DC and DC commercial electricity rates.

How the May 20 auction sets July SOS prices

Pepco procures Standard Offer Service through competitive wholesale auctions approved by the DC PSC [dcpsc-sos-rates]. The May 20, 2026 auction set wholesale supply costs that rolled into customer rates July 1 [dcpsc-sos-rates]. The auction includes energy, capacity, and ancillary components bundled into the SOS cents-per-kWh rate.

Cannabis operators comparing SOS to third-party quotes should ask suppliers to break out capacity and energy separately. That makes it easier to compare against the PJM $329.17/MW-day capacity embedded in SOS [pjm-capacity-2026-27].

Small commercial vs large commercial in DC

Dispensaries under 100 kW peak may qualify for simpler rate schedules with lower demand charges but higher energy rates per kWh [dcpsc-sos-rates]. Cultivation facilities above 200 kW almost always pay demand charges that dominate the delivery stack.

If you are expanding from a dispensary to add processing or cultivation on the same campus, expect a rate class change that affects delivery more than SOS [dcpsc-sos-rates]. Contact Pepco account management before energizing new load.

Multi-year budgeting with SOS volatility

SOS resets through periodic auctions, not on a fixed calendar like New Jersey BGS [dcpsc-sos-rates]. A cultivator who rode SOS through 2025 and 2026 saw supply move with PJM capacity and wholesale energy markets [pjm-capacity-2026-27]. Fixed supplier contracts trade flexibility for predictability.

For a facility spending $40,000 per month on SOS supply, a 2 cent per kWh fixed contract savings on 400,000 kWh saves $8,000 monthly. Over 24 months that is $192,000 before delivery, which FC1176 may change independently [dcpsc-sos-rates].

Assignment on change of ownership

DC cannabis licenses and utility accounts may transfer on acquisition. Supply contracts follow the meter in most cases but require supplier approval [dcpsc-sos-rates]. During due diligence, confirm whether the seller's ESCO contract assigns to the buyer or terminates on closing.

If the contract terminates, you may land on July SOS rates until a new supplier enrolls [dcpsc-sos-rates]. Budget one to two billing cycles for enrollment.

SOS auction timing for contract renewals

Pepco DC's Standard Offer Service resets July 1 after the May auction approval [dcpsc-sos-rates]. Align supplier contract start dates to avoid overlapping SOS and third-party supply during the transition month. Commercial accounts need load data ready before the May bidding window.

GS-2 vs GT: where cultivators cross the demand threshold

DC cannabis facilities on Pepco often start on GS-1 or GS-2 when peak demand stays below 200 kW [dcpsc-sos-rates]. Multi-room indoor cultivation frequently exceeds GS-2 thresholds and moves toward GT large commercial service with higher demand charge exposure [dcpsc-sos-rates]. Schedule code determines delivery dollars, not SOS supply rate.

Before expanding canopy, ask Pepco account management which schedule applies at your projected peak kW [dcpsc-sos-rates]. A move from GS-2 to GT can add thousands per month in delivery demand even if kWh use rises proportionally less.

PJM congestion in DC SOS procurement

DC sits in PJM. SOS procurement embeds locational capacity and energy costs from the May auction [dcpsc-sos-rates]. The 2026/27 capacity year cleared at $329.17 per MW-day [pjm-capacity-2026-27]. That capacity cost is inside the SOS cents-per-kWh rate approved July 1 [dcpsc-sos-rates].

Third-party suppliers may break out capacity pass-through separately [pjm-capacity-2026-27]. Compare SOS all-in supply to fixed ESCO quotes that include or exclude capacity explicitly. A quote that looks 1.5 cents cheaper may pass through capacity monthly while SOS rolls it into a flat rate [dcpsc-sos-rates].

Coordinating SOS switch with FC1176 delivery uncertainty

Pepco FC1176 proceedings may change delivery rates independently of the July SOS reset [dcpsc-sos-rates]. Lock supply on a fixed ESCO contract while delivery gets re-litigated. You control supply completely. Delivery moves with the PSC order [dcpsc-fc1176].

A cultivator spending $43,000 monthly on SOS supply who switches to a fixed 10.5 cent ESCO rate on 360,000 kWh saves $5,400 monthly on supply [dcpsc-sos-rates]. That savings persists even if FC1176 adds eight percent to delivery charges later [dcpsc-sos-rates].

ABRA licensing and utility account setup

DC cannabis licenses from the Alcoholic Beverage Regulation Administration require a valid utility account for occupancy [dcpsc-sos-rates]. New licensees energizing meters in 2026 default to SOS until they enroll a competitive supplier [dcpsc-sos-rates]. File supplier enrollment before opening if you want to avoid riding July SOS rates from day one [pjm-capacity-2026-27].

Reading the DC PSC SOS rates page

The DC PSC publishes current SOS cents per kWh by customer class on its SOS rates page [dcpsc-sos-rates]. Compare the published commercial SOS rate to the supply line on your Pepco bill [dcpsc-sos-rates]. Discrepancies may reflect riders, taxes, or a rate class mismatch worth correcting with Pepco billing [eia-epm-5-6-a].

If supply on your bill exceeds the published SOS rate by more than one cent per kWh, request a billing explanation from Pepco before assuming a third-party switch is unnecessary [dcpsc-sos-rates]. Rate class errors are correctable without changing suppliers [dcpsc-fc1176]. See Washington DC commercial electricity rates for statewide context on all-in commercial pricing [eia-epm-5-6-a].

Request supplier quotes thirty days before your contract expires to avoid an unplanned return to July SOS rates at the post-auction level [dcpsc-sos-rates].