Delmarva Power Files for Adjustment in Delaware Delivery Rates
Friday, September 18, 2009
Company Requests 4.6 percent Increase to Cover Higher Costs
NEWARK, Del. – Delmarva Power today asked the Delaware Public Service Commission (PSC) to authorize an increase in its electric delivery rates to cover the increased cost of operations, maintenance and capital investment. Delmarva Power has gone nearly 15 years without an electric delivery rate increase. The last was in 1995. For a residential customer with average usage, the total monthly bill would increase about $5.67 or 4.6 percent. The delivery rates are separate from the fuel (supply) rate. Delivery rates reflect the costs of providing a system and services to move electricity through the poles and wires to customers.
The company’s $27.6 million request reflects rising capital investment costs required to continue to provide its Delaware customers with safe and reliable electric service. For example, Delmarva Power has invested more than $225 million in its Delaware transmission and distribution system over the past three years (2006 through 2008) and projects to spend more than $480 million in the next five years (2009 through 2013). The Company is also investing $81 million in its Automated Meter Infrastructure (AMI) and $17.5 million in Direct Load Control (DLC) projects in Delaware. Delmarva Power delivers electricity to approximately 300,000 homes and businesses in Delaware.
“Delmarva Power remains committed to delivering safe, reliable electric service at reasonable rates,” said Delmarva Power Region President Gary Stockbridge. “We’ve operated for many years without increasing our delivery rates. We’ve been able to do this by keeping our costs down. This rate adjustment addresses the rising cost of maintaining our infrastructure and improving our electric delivery system.”
Delmarva Power has taken a variety of steps to control costs, Stockbridge noted. "We take actions wherever possible to hold down costs without sacrificing services, including capping staffing levels, cancelling annual pay increases for management employees, offering reduced benefits for new employees and outsourcing corporate functions to achieve savings."
Delmarva Power officials said a decision on the rate increase request is expected by May 2010. In the interim, the company said it will implement a 0.36 percent delivery rate increase, effective Nov. 17, 2009, which will be subject to refund following the PSC’s review.
Delivery rates cover the cost of continuing to provide customers with safe and reliable service, investment in new electric service technology and improvement in service capabilities to keep pace with growth and increasing demand. These rates are different than supply rates which are adjusted annually for Delmarva Power’s Delaware customers to reflect the cost of power that the company is required to buy on behalf of its customers who have not chosen an alternate supplier. All customers, regardless of whether they buy their power from a competing supplier or not, will see the same increase in their delivery rates. Their new total monthly bill will vary according to the per-kilowatt-hour price charged by their supplier.
Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to more than 500,000 electric delivery customers in Delaware and Maryland and over 121,000 natural gas delivery customers in northern Delaware .