For Immediate Release
Delmarva Power today filed an application with the Delaware Public Service Commission asking for approval of its proposal to phase in electricity rates set to take effect May 1, 2006. The phase-in is part of a comprehensive proposal by Delmarva Power to address the rate increase for residential customers necessitated by dramatic increases in the costs of fuels used to generate electricity.
Delmarva Power Regional President Gary Stockbridge said, "Today's filing is another step in our effort to incorporate guidance we've received from the governor's office, the legislature and the Public Service Commission as we partner to come up with timely responses to the challenges posed by higher prices for the fuels used to generate electricity."
With rate caps that have saved Delaware residents over a billion dollars set to expire in May, Delmarva Power recently facilitated a competitive bidding process to purchase power in the wholesale market on behalf of customers. The process, which was overseen by the Delaware Public Service Commission, resulted in the higher rates that prompted the company's phase-in proposal.
The phase-in plan filed with the Delaware PSC is identical to a proposal presented on February 28, with the exception that it would be optional-a change that is based on feedback from legislators.
Company officials have asked that any phase-in plan be approved by the end of the month in order to give the company adequate time to make the administrative changes needed to facilitate the optional phase-in process. Stockbridge said the filing and the administrative process recently approved by the PSC "will allow the company, the Commission, and other stakeholders to begin working out the details of a phase in process while we continue to get direction on larger policy issues from elected officials."
"Once the plan is approved, we will be contacting residential customers directly with information about the proposal and the points to consider when they are deciding whether or not to participate in the phase in," Stockbridge said. "The goal of the phase-in plan is to provide an option for those customers who need time to adjust to the new rates."
The proposed rate increases, announced on February 2nd, are due to significant increases in the cost of fuels used to generate electricity. Between 1999 and 2005, fuels used to generate electricity have increased significantly in price. Natural gas prices rose a total of 400 percent; fuel oil prices rose 300 percent; and coal prices rose 150 percent. In just one year, 2005, the price of fuel oil rose 76 percent and of natural gas, 67 percent1.
1 U.S. DOE/Energy Information Agency; U.S. DOL/Bureau of Labor Statistics
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, Maryland and Virginia and over 118,000 natural gas delivery customers in northern Delaware .