Cape Gazette
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Delmarva Power seeks $42 million increase

Company asks for higher base rates starting May 21
By Kara Nuzback | Apr 17, 2013
Photo by: Kara Nuzback Delmarva Power customers in Delaware are facing an increase in electric base rates.

Just four months after getting the OK for a $22 million rate hike, Delmarva Power is back, seeking to raise utility rates for its customers.

Delmarva Power has requested a $42 million increase in base electric rates, or a 7.4 percent rise.  The utility says it is simply trying to make a fair return on its investment.  Opponents of the rate hike say the increase is too much too soon for Delaware residents still hurting from the recession.

Delmarva Power sent a March 22 letter to the commission with an application for an increase in base rates for customers. Delmarva Power attorneys Todd Goodman and Pamela Scott wrote that the request is a result of an increase in capital investment made by the utility to modernize and better serve its customers.

“Delmarva’s distribution system construction budget for 2012 and 2013 is approximately $163.2 million.  In 2013, the company’s total capital budget for Delaware is $179.2 million,” the attorneys state.  “In order to continue to provide safe and reliable service to its customers, it is critically important for Delmarva to have the opportunity to earn a fair return on its capital.”

Goodman and Scott say Delmarva Power is currently earning a 3.6 percent return on its investment; the utility is requesting a 10.25 percent return.  Delmarva Power asks that the changes become effective Tuesday, May 21.

In response, 20 bipartisan representatives sent a letter to the Public Service Commission April 9 objecting to Delmarva Power’s application.

“These requests, along with $25 million to replace obsolete smart meters, total approximately $130 million,” representatives wrote.  “As our state slowly recovers from recession, Delaware families do not have the resources to pay more for electricity every time Delmarva Power asks for a rate increase.”

Delaware Public Service Commissioners Jay Lester, Joann Conaway and Jeffrey Clark voted unanimously Nov. 29 to approve a $22 million settlement between Delmarva Power and the state, allowing customer rates to increase in 2013.

The commission approved a 9.75 percent return on equity as part of the settlement.

The settlement called for smart meters to be installed for all Delmarva Power customers. The only person who testified against the settlement was Rep. John Kowalko, D-Newark South.

“These legislators and groups have joined together in an effort to stop Delmarva from reaching into Delawareans’ pockets once again,” Kowalko said in a press release.

Kowalko noted Pepco Holdings, Delmarva Power’s parent company, has indicated it wants to speed up the utility’s collection for planned infrastructure improvements in Delaware. Kowalko also said Pepco is posting a quarterly profit of $43 million, more than double its profit a year ago.

“Over the last several years, we’ve seen the same scenario play out: Delmarva Power comes before the Public Service Commission, requests a large rate increase, is granted a slightly smaller increase, then comes back with another request,” Kowalko said. “The part of the story that isn’t told is that ratepayers not only foot the bill for the rate increases that are granted, but they also pay for the analysis and process the PSC and Delmarva must go through every time Delmarva files a rate-increase request.”

Delaware Alliance for Community Advancement, Delaware chapter of the National Organization for Women, Progressive Democrats of Delaware, Caesar Rodney Institute, Delaware chapter of Americans for Democratic Action, Coalition of Community Organizations, Plan Delaware and Citizens for the Greater Good have all opposed Delmarva Power’s request.

DACA executive director Darlene Battle called the rate request unacceptable. “Increasing electric service rates will devastate families in the state of Delaware. There’s no two ways about it,” she said.

For more information, go to the Delaware Public Service Commission website at depsc.delaware.gov. Written comments may be sent to Case Manager Amy Woodward at psc@state.de.us.

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