Delmarva Power has filed a request with the Delaware Public Service Commission seeking a revenue increase of $67.8 million for its electric base rates. This increase would translate to an approximate 4.13% rise in bills for its 344,000 residential and non-residential customers, amounting to about $6.42 per month. If approved, the change could take effect in July 2024, contributing to ongoing concerns among ratepayers over rising utility costs.
The utility has attributed the need for additional revenue to essential infrastructure improvements. In a recent statement, Delmarva Power emphasized the importance of maintaining reliable service amidst increasing operational costs. Alongside the proposed electric rate hike, the company is also introducing a low- to moderate-income rate plan aimed at alleviating some of the financial burdens on vulnerable customers.
Challenges in the regional energy market are exacerbating the situation. The regional grid operator, PJM Interconnection, has faced delays in adding new supply to the grid, which has resulted in record-setting capacity prices. Recently, Delmarva Power’s electricity bills surged by approximately $10 this summer due to a capacity auction, a process designed to secure electricity supply during peak demand periods.
Gas Price Increases Compound Financial Strain
Delmarva Power is not only seeking to raise electricity rates; gas distribution rates have also seen significant increases over the past year. Average gas bills have risen by about $22, following interim delivery rate adjustments that came into effect in April 2023. A settlement with the Public Service Commission will further add $2 to monthly bills starting in January 2024, contributing to a total increase of approximately $10.
In addition, the Public Service Commission recently permitted Delmarva to recover natural gas supply costs, resulting in an additional $11.33 per month for customers. Both these adjustments are pending final approval from the commission. Chesapeake Utilities Corporation has also sought a gas supply increase, which remains under consideration.
The surge in utility costs has triggered considerable public outcry, prompting state lawmakers to pass legislation aimed at providing relief. Measures include enhancing the scrutiny of proposed rate increases and establishing an energy fund for residents who meet certain income requirements.
Customer Assistance Initiatives and Future Proposals
In response to widespread dissatisfaction with skyrocketing bills earlier this year, Delmarva Power has created a customer assistance fund totaling $4.5 million, which will offer $300 credits to qualifying limited- and moderate-income customers. The state has allocated an additional $1.5 million to support this initiative.
Delmarva Power’s Region President, Marcus Beal, acknowledged the financial pressures faced by Delaware families. “We know families and businesses are facing real economic pressures, rising costs, property tax increases, and higher energy usage during extreme weather,” he stated.
As part of its ongoing efforts to address affordability concerns, Delmarva Power is proposing a new Affordability and Load Flexibility Portfolio. This program aims to save customers up to $100 annually by encouraging reduced energy use during peak demand times. The cost of implementing this portfolio would gradually increase bills over three years, starting at $0.13 in 2027 and reaching $0.59 by 2029.
The ongoing dialogue between utility companies, state lawmakers, and ratepayers underscores the urgent need for solutions to mitigate the financial impact of rising utility costs on Delaware residents. As Delmarva Power continues to navigate these challenges, its proposals and customer assistance initiatives will be closely monitored by both regulators and the public.
