Recently, representatives and lobbyists for Exelon and Delmarva Power & Light have been circulating proposed legislation that would impose a surcharge of up to $17 million in between electric rate cases and up to $7 million in between gas rate cases for a total of $24 million on Delaware consumers for a “Distribution System Improvement Charge.” This would be to allegedly pay for enhanced reliability. However, Exelon is not telling you that this huge windfall will have significantly less oversight and examination than a base rate case, which has “a full review of utility requests for rate increases to consider appropriateness and reasonableness.”
I strongly oppose this legislation since it puts the consumer at a distinct disadvantage and deprives consumers of a fair public hearing before the Public Service Commission.
In fact, DP&L has itself stated that, “The appropriate forum for the Commission to review the costs of Delmarva’s investment into the reliability of the electric distribution system is a base rate case. The Commission’s ultimate authority to review Delmarva’s decisions regarding the proper amount to invest in system reliability comes when Delmarva files rate cases to recover its investment in its system. The thorough discovery, public comment, and evidentiary hearing process conducted in a base rate case proceeding is, itself, a comprehensive investigation into a utility’s rate request.” (In the Matter of the Investigation into Delmarva Power and Light Company’s Rate Request for Distribution Infrastructure Investment, PSC Docket No. 13-152, Delmarva response to PSC staff, pages 2-3)
In addition to the letter attached below, the Delaware Public Advocate also shared these comments with all legislators:
Dear Members of the General Assembly,
Delmarva Power is working to introduce legislation allowing for a Distribution System Improvement Charge (DSIC) to Delaware consumers. As the Division of Public Advocate, we oppose this automatic increase for reasons stated in the attached letter and hope you will join us in opposing this letter on behalf of residential, small commercial, and industrial customers.
Some of the arguments you will hear from Delmarva are:
- The need for less rate cases, which are costly
- Less volatility in consumer bills
- The water utilities have a DSIC
While I appreciate their (Delmarva’s) comments, I take exception to each of these points. The fact is rate cases will occur only six months later at the same legal and consultant costs while costing consumers up to $24 million in automatic increases during this same period, consumer billing volatility will increase without legislative changes to the rate-making system, which I have proposed, and Artesian, the largest water company in Delaware, has come in for rate cases every 2.5 years since receiving the DSIC in 2001 and their need for rate increases has not changed in 30 years (15 before DSIC and 15 after).
I am pleased to join the Public Advocate, Andrew Slater, in opposing this attempted giveaway to a multi-billion dollar company and urge all of you to contact your Representatives, Senators, PSC Commissioners, and the Governor to register your opposition.
[pdf-embedder url=”https://johnkowalko.com/wp-content/uploads/2017/05/DPA-Opposition-to-Exelon-DSIC-legislation.pdf” title=”DPA Opposition to Exelon DSIC legislation”]