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Delmarva Power Seeks Adjustment in Delaware Delivery Rates

Friday, December 02, 2011

Request Covers Reliability Investments, Customer Service, New Technology, Hurricane Costs

NEWARK , Del. – Delmarva Power, a subsidiary of Pepco Holdings, Inc. (PHI), today asked the Delaware Public Service Commission for an adjustment in electric delivery rates to cover a variety of costs including continued investment in reliability, customer service and new technology. The request also covers costs to restore service from severe damage caused by Hurricane Irene in August.

The proposed $31.7 million request would result in a 5.0 percent increase on a typical residential customer’s bill, which would increase by $7.27 per month, from $144.48 to $151.75. The typical residential customer is defined as using, on average, 1,000 kilowatt hours of electricity a month. If approved, the rate adjustment’s monthly impact on commercial and industrial customers would vary with usage.

“The vast majority of this filing covers the cost of infrastructure investments, such as upgrades to power lines, substations and other equipment necessary to maintain safe and reliable service for our Delaware customers,” said Gary Stockbridge, President, Delmarva Power Region. In Delaware, the company invested approximately $224.7 million in electrical distribution enhancements during the past five years (between 2006 and 2010) and expects to spend an additional $400 million through 2016, Stockbridge added.

Reliability-related projects include annual work performed to improve the performance of the least performing feeders, replacement of underground cable that is nearing its end of life and other improvements to reduce customer outages and enhance system performance.

Although the company has spent approximately $72 million on its deployment of smart electric meters and associated communications infrastructure in Delaware to improve its customer service, the incremental impact of that investment has been offset from operational savings, such as reductions in meter reading expenditures.

“As promised, we are committed to aligning customer savings with costs when it comes to our smart meter initiative. In that vein, this proposed rate increase has minimal costs associated with our smart meter investment,” Stockbridge said.

Also in this rate filing, Delmarva Power is requesting approximately $1.2 million a year for three years to cover expenses incurred from Hurricane Irene, which hit the region in late August; and the company is asking for nearly $1 million to cover the cost of additional staff and equipment to enhance customer service.

As permitted by law, Delmarva Power will implement an interim $2.5 million adjustment effective January 31, 2012, while regulators review the full revenue request, a decision on which is expected by July 2012.

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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 122,000 natural gas delivery customers in northern Delaware .