electricity, but we do not generate it. We purchase the electricity
needed for our customers from unregulated wholesale suppliers, who own power
plants and produce electricity or who buy and sell it on the wholesale market. Delaware
law requires us to use a competitive bidding process to buy
electricity for customers who do not choose an alternative electricity
supplier. Customers are charged for this service – called Standard Offer
Service (SOS) – under rates approved by the Delaware Public Service Commission
occurs each year. Delmarva Power purchases the electricity it needs for its SOS
customers from unregulated wholesale suppliers, who own power plants and
produce electricity or who buy and sell it on the wholesale market. Contracts
are awarded based on lowest price.
New SOS rates are
effective for the Summer on June 1 and for Winter on October 1. Each year,
we offer about one-third (33 1/3 percent) of the total residential
SOS peak load for bids. The bids are for three-year contracts. The bidding
combination of load, contract term and bidding frequency has been approved by
the PSC. This approach has a dampening effect on price swings.
In order for the retail
electric industry to become competitive in Delaware per the Electric Utility
Restructuring Act of 1999, we no longer have an exclusive franchise
to serve retail electric utility customers. That means third-party suppliers
can compete for customers within the our service territory in
Delaware. Under the Restructuring Act, those customers who do not choose
an alternative electric supplier will default to Standard Offer Service (SOS),
which we provide throughout our Delaware service territory.
Delmarva Power follows a
PSC designed and approved competitive bid process, Each year Delmarva Power
offers about one-third of the total residential SOS peak load for bids. The
bids are for three-year contracts. This approach has a dampening effect on
Delmarva Power began
offering Delaware SOS customers market-base rates on May 1, 2006 when caps were
lifted on the Standard Offer Service rate.
New SOS rates are
effective for the Summer on June 1 and for Winter on October 1.
It is hard to say. Two
suppliers were publicly announced as winning a piece of the SOS load during
this year’s competitive bid process, and a total of five suppliers serve all of
the SOS load. The suppliers buy and trade the energy in the PJM marketplace so
tracking its origin is difficult. The bid process simply ensures that we’ll get
the needed reliable and competitive supply of electricity for delivery to our
Your bill will
essentially look the same. The new rates for Standard Offer Service will
be reflected in the Supply Charges portion of your bill.
The new rates are already
available in the Tariff section.
Yes. The SOS rates that
will take effect on June 1, 2014 will be your summer rate. Winter rates will
take effect on October 1, 2014.
Nobody can say what the
energy markets will do from year to year. SOS supply rates will be set annually
based on a competitive bidding process in the wholesale electricity market. In
the fall of 2014, we, under the supervision of the Delaware Public
Service Commission, will conduct another bidding process that will result in
new SOS supply rates that will take effect on June 1, 2015.