‘Real, economic pressures’: Delmarva Power customers feel the squeeze as electricity and gas rates keep climbing

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Delaware ratepayers continue to face rising utility prices as Delmarva Power requests tens of millions in revenue increases for transmission and distribution of gas and electricity. The rate hike applications are compounded by regional grid operator PJM Interconnection’s sluggish pace in adding new supply to the grid and record-setting capacity prices.

The energy company serves 344,000 residential and nonresidential customers in the state.

Electricity rate increase could take effect in July

The utility’s most recent ask to the Delaware Public Service Commission is for an overall revenue increase in electric base rates totaling $67.8 million, with an actual impact of $44.6 million to bills. That would amount to a 4.13% increase, or about $6.42 on an average residential customer’s bill, starting in July, subject to approval by the commission. The request proposes a new low- to moderate-income rate and to reduce weather-related bill impacts.

Delmarva Power said it needed the additional revenue to make infrastructure improvements.

Gov. Matt Meyer appointed a new Delaware Public Advocate, Jameson Tweedie, after an outpouring of anger at the beginning of the year over high prices. Tweedie did not respond to a request for comment on the utility’s recent rate request.

Delmarva Power’s electricity bills already increased about $10 this year this summer because of what’s called a capacity auction, the process regional grid operator PJM Interconnection uses to guarantee future electricity supply during the hottest and coldest days of the year. The grid also has a backlog that has prevented new power plants and renewable energy projects from adding more supply.

Delmarva Power’s gas prices have also gone up

The utility has also hiked gas distribution rates and supply costs in the past year, adding another approximately $22 to the average ratepayer’s bill.

Interim Delmarva Power gas delivery rates took effect in April, raising the average bill by about $8. A recent settlement with the Public Service Commission will add another $2 a month to bills starting in January totaling $10, a company spokesperson said.

And last month, the Public Service Commission allowed the utility to recover natural gas supply costs, adding another $11.33 per month, or 13%, to utility bills. Both of these approvals are subject to a final determination by the commission.

A gas supply increase was also approved to take effect for Chesapeake Utilities Corporation during this period, which is also subject to the commission’s final approval.

The recovery of gas supply costs sought by Delmarva Power and Chesapeake Utilities in late August and September drew a response from Tweedie in October.

“This is a dramatic increase that will make utility bills more expensive for both Delmarva and Chesapeake customers,” he said in a statement. “My office will carefully review both corporations’ applications to ensure customers are not overcharged, but because the [gas cost rate] and [gas sales service rate] are pass-through costs, there is limited ability to challenge these increases.”

These price surges come in the wake of intense criticism of Delmarva Power early this year, when bills began doubling or tripling in price. The company at the time attributed the rises to extremely cold weather, causing people to use more gas and electricity to heat their homes.

State lawmakers responded to the outrage over high bills by passing several pieces of legislation to provide relief. Some of those measures included giving the PSC greater scrutiny over requested rate increases, limiting when or how a utility can disconnect or end service and creating an energy fund for people who meet certain federal poverty income requirements.

Delmarva Power has also created a customer assistance fund that will provide a total of $4.5 million in relief for limited- and moderate-income customers. Those who qualify can get a $300 credit toward their bill. The state contributed an additional $1.5 million to the fund.

Delmarva Power Region President Marcus Beal said the company understands that affordability is a top issue for 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 said. “We take that seriously.”

While asking for an electricity rate bump to take effect in July, Delmarva Power is also proposing programs it says can reduce costs for customers. It said its Affordability and Load Flexibility Portfolio could save customers up to $100 annually by reducing energy use during peak times.

The programs include:

• Smart Thermostat Program – Those with smart thermostats can enroll to participate in demand response events.
• Allowing enrolled air conditioning and heating units to be cycled by Delmarva during peak demand times.
• Directly managing charging schedules to maximize efficiency for participants.
• Encouraging people with electric vehicles to charge during off-peak hours by offering time-based pricing
• Shifting overall household consumption away from peak hours of 2 p.m.- 8 p.m. to decrease costs.
• Piloting programs that tests customer-owned battery storage and supports specific areas of the grid.

Delmarva Power said the cost for the portfolio would gradually increase bills over three years, beginning at $0.13 in 2027, increasing to $0.39 in 2028 and $0.59 in 2029.

Editor’s note: This story has been updated to clarify the month that the electricity rate increases will take effect if approved by the Public Service Commission.