The News Journal | by Karl Baker
Delmarva Power wants to raise rates for its Delaware electricity customers by more than $5 a month next year, and nearly $4 a month for natural gas.
The Newark-based utility asked the state for permission in August to increase electricity rates to raise $31.2 million. If allowed, the average Delaware homeowner would pay $5.42 more for electricity, to about $123.
Delmarva also wants to increase its monthly natural gas rates by nearly $4 more per month, for the average homeowner, raising $12.8 million for the company.
At a public meeting in New Castle on Monday, residents claimed the increase is unneeded and would place a heavy burden on financially strained Delawareans.
“This rate request strikes me as a bunch of people sitting around a table saying, ‘we’d like to raise rates. Let’s come up with some things to justify it’,” said Charlie Fallette, a Newport business owner.
Delmarva spokesman Nicholas Morici said the money will be used to offset more than $50 million the company spent on infrastructure maintenance in 2016.
“Some parts of the system are about 50 years old,” Morici said.
Utility rates in Delaware are based upon a months-long process where government and power company officials have to convince a state utility board what price is “reasonable.”
To decide if Delmarva’s latest request is justified, the five governor-appointed members of the Delaware Public Service Commission will scrutinize the financials of Delmarva’s operations, said Bob Howatt, executive director of the commission, which has regulatory authority over utility companies.
They will set a target profit for company investments at 9.7 percent, he said.
“The reason the company came in for a rate increase is because they’re making below the level that they’re allowed to return,” Howatt said.
Delaware Public Advocate Drew Slater expects that at the end of the process, after months of hearings involving consultants, lawyers and state officials, the rate increase likely come in below Delmarva’s request.
“No one said you shouldn’t have a rate increase, it’s just a matter of how much it should be,” said Slater, who is arguing on behalf of ratepayers to the commission.
A decision likely will be made in the spring of 2018.
Asked if the $31 million electricity request is too high, Slater said, “I think there is a lot of negotiation that should go on.”
A separate electricity rate increase went into effect earlier this year, giving Delmarva an extra $36.4 million in annual revenue, according to the Public Service Commission.
Delmarva Power, which is owned by Chicago-based Exelon Corporation, provides electricity to more than a half million people in Delaware and Maryland, according to the company. It also serves about 129,000 natural gas customers in northern Delaware.
Exelon, a $38-billion company, reported net income of $1.2 billion in 2016, down 46 percent from the previous year. The company last year merged with Pepco Holdings, creating the country’s largest publicly held utility.
As part of the deal, the company deposited $17 million into a fund to be used in Delaware for “customer benefits, such as bill credits, assistance for low income customers and energy efficiency measures.”
Rep. John Kowalko, D-Newark, said the credit has been offset by higher electricity rates.
He called proposed rate increases “another calamitous economic taking by this utility conglomerate.”
A New Castle-area resident who spoke at the Monday’s hearing said high electricity rates contribute to her living at near poverty, because of the high cost to power numerous medical devices that support her disabled 13-year-old son.
“My life is not easy,” said Nancy Lemus. “My son has twelve machines at home. I can’t tell my son, you know, ‘tonight, you’re not going to get oxygen because the overload of power is going to increase our electric.”
Following Lemus’s testimony, a Delmarva official asked to speak with her about programs that could subsidize her payments.
Mark Blake, a Hockessin resident who ran for county executive last year, said at the meeting that there are too many charges on residents’ bills that are unrelated to actual power consumption.
“Customer charge, distribution charges, low income charge, a green energy fund, a renewable compliance charge,” he said. “I haven’t even used an ounce of energy yet and I’m up to $40.”
Public Input Sought
The meeting on Monday was the first in a series of public hearings scheduled to give Delawareans an opportunity to comment.
The second is scheduled for 6 p.m. Tuesday at the Public Service Commission’s office at 861 Silver Lake Blvd. in Dover
The final meeting will take place at 6 p.m. Wednesday at the Indian River Senior Events Center, located at 214 Irons Ave. in Millsboro.