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Maryland PSC Allows 1.1 Percent Rate Adjustment for Delmarva Power

Friday, December 04, 2009

Revenue to Cover Costs for Electric System Reliability

SALISBURY , Md. – The Maryland Public Service Commission (PSC) late Wednesday authorized Delmarva Power to increase its distribution rates for its Maryland customers by about 1.1 percent. This is only the third time in more than 15 years that distribution rates have been increased. A typical bill for a residential customer using 1,000 kilowatt-hours a month would increase by $1.66, moving the average monthly bill from $150.03 to $151.69. The bill impact on commercial and industrial customers would vary according to usage.

The $7.53 million revenue increase represents approximately half of what the company had requested. In its order, the PSC said, “this modest increase is justified primarily by construction costs incurred for the purpose of improving the reliability of the Company’s electric distribution system.”

"While we believe that the entire amount of our rate increase request was fully justified, the Commission's decision attempts to balance our need for additional revenues to maintain the reliability of our electric system while having a fairly modest impact on our customers," said Gary Stockbridge, President, Delmarva Power Region. "We are disappointed but we understand the Commission's concern for customers in these challenging economic times."

Distribution rates cover the cost of the poles and wires that carry electricity to customers’ homes and businesses and are separate from supply rates. Supply rates are determined by the wholesale energy markets and reflect the cost of power that Delmarva Power purchases on behalf of its Maryland customers who do not buy power from an alternate supplier. Supply costs are driven primarily by the cost of fuel to make electricity. Customers who buy electricity from a competing supplier will see the same increase in their distribution rates.

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Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to nearly 500,000 electric delivery customers in Delaware and Maryland and over 121,000 natural gas delivery customers in northern Delaware.