Delmarva Power only in it for the money

December 25, 2017

Frankly, I paid little or no attention to Seaford’s recent celebration of American Public Power Week as we “enjoy” the highest/near-highest effective electric rates in Delaware. But now, Delmarva Power wants more rate increases and Seaford likes to help justify its rates by comparing them to “benchmark” DP rates.

Both DP and the Delaware Municipal Electric Corporation - the electric monopoly including the City of Seaford - are in it for the money. DP and DEMEC members mainly buy power at wholesale prices and then resell it at a profit.

And these providers appear to be following a similar plan to increase their profits based on a plan from the American Public Power Association which calls itself “the voice of not-for-profit, community-owned utilities.”

The PLAN advocates raising effective rates across the board even as the wholesale price of purchased electricity has fallen dramatically. A primary focus of the PLAN is to systematically raise regressive customer charges to supposedly offset “fixed costs” and increase profits.

When the wholesale cost of power decreased by 5 percent last year, the Delaware Electric Cooperative passed on the savings to its customers by cutting its rate(s) 5 percent. At the same time, the Seaford electric monopoly actually increased effective rates by hiking customer charges for the third year in a row. And Delmarva Power wants the Public Service Commission to approve another usage rate increase and likely another increase in customer charges.

While I don’t have a reasonable profit level in mind for DP, I know Seaford buys electricity for about 8 cents/kwh and then resells it at an effective rate of nearly 16 cents/kwh. After expenses, millions of $’s per year in profit go into Seaford’s General Fund to support its spending habits. For the record, Seaford’s percentage take from electricity resale is much greater than any of its other DEMEC partners.

The Co-op would seem to be living up to the promises embodied in the celebration of American Public Power Week by truly serving its customers’ interests. Both DP and DEMEC members have a long way to go to convince this customer that they have my best interests in mind.

Not only should the Delaware Public Service Commission take an extremely skeptical view of DP’s ongoing requests for rate and customer charge increases, it should become the regulatory agency for DEMEC municipal electrical monopolies.

Dan Cannon

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