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Delmarva Power Seeks Reduction in Annual Natural Gas Cost Rate

Wednesday, August 31, 2011

Average residential winter bill would decrease by 3.7 percent effective Nov. 1

WILMINGTON , Del . – Delmarva Power today asked state regulators to authorize a decrease in the rate it charges customers for natural gas. Under the rate decrease, the typical Delmarva Power residential gas customer would save about 3.7 percent, or $6.29 a month, on their overall gas bill during the upcoming winter heating season. The proposed rate decrease is due to lower commodity costs associated with Delmarva Power’s purchase of natural gas on behalf of its customers.

The gas cost rate is a dollar-for-dollar pass-through to the customer for the supply of natural gas. Delmarva Power is permitted to recover the costs it incurs to buy gas for customers, but not earn a profit on the purchase of the fuel.

Under Delmarva Power’s proposal, the winter bill for a residential customer using 120 centi-cubic feet (ccf) per month would decrease from $172.00 to $165.71 starting Nov. 1. The proposed rate decrease would be from 94.042¢ to 88.804¢ per ccf. Commercial and industrial customers’ rates also would decrease, but the monthly bill impact among those customers varies greatly with usage. The rate changes are subject to review and approval by the Delaware Public Service Commission (PSC).

The natural gas market is volatile and subject to sudden and sharp price spikes and dips depending upon supply and demand. The company files each year at this time to reflect the changing cost of the commodity. Delmarva Power’s purchasing, which is overseen by the PSC and includes the cost of natural gas as well as its transportation to this region, aims to minimize the impact that severe price swings can have on customers.

Delmarva Power encourages customers to register for My Account, which offers them information on saving energy and money in their home or business, at www.delmarva.com. The company also offers customers Budget Billing, a fixed payment plan based on the customer’s 12-month average bill. Customers can enroll online or by calling 1-800-375-7117.

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Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to nearly 498,000 electric delivery customers in Delaware and Maryland and over 123,000 natural gas delivery customers in northern Delaware .