Each LDC has a set of rules and processes it follows to set the SOS price - rules that have been established by its state’s public utility commission. These rules often include a ‘break-even’ rider, which allows the LDC to pass-on a true-up of actual costs or savings from the provision of this supply, and are published as its tariffed supply rates. As a result clients are never guaranteed an exact fixed rate.
While the ISO creates the market for wholesale electricity supply, the price for electricity varies significantly by region due to the proximity of power plants, the fuels used by these power plants, local fuel costs, congestion on transmission lines, in addition to local pricing regulations and structures. Therefore, the prices at one LDC (e.g., BG&E) can be different than those at another LDC (e.g. PEPCO), and these prices can change at different rates.