Delmarva Power, a subsidiary of Pepco Holdings Inc., was recently granted a rate adjustment of $22 million for investments to improve its electric system. Delmarva Power filed its application for the electric delivery rate adjustment in December 2011.
After nearly a full year of careful analysis and review, the Delaware Public Service Commission authorized the adjustment in electric delivery rates to support the company’s ongoing efforts to maintain safe and reliable service and provide enhanced customer service technology that will provide customers with the opportunity to reduce the electric supply portion of their bills.
The commission also approved approximately $1.1 million per year in recovery for Delmarva’s Advanced Metering Infrastructure. This recovery was permitted after it was determined by the commission staff that Delmarva’s AMI system has achieved over $5 million in savings for customers to date.
The result of the adjustments approved by the commission would mean that the typical monthly bill for a Delaware residential customer using 1,000 kiliwatt-hours per month would increase by $4.73 from $136.86 per month to $141.59 or approximately 3.2 percent per month.
However, because a temporary rate increase went into effect in July 2012 and the increase approved by the commission Dec. 17 is less than the temporary increase, the typical residential customer will actually see a decrease of about 34 cents per month starting in January 2013.
“Delmarva Power remains committed to delivering safe, reliable electric service at reasonable rates,” said Delmarva Power Region President Gary Stockbridge. “This rate adjustment helps cover the rising cost of maintaining our infrastructure and improving our electric delivery system,” added Stockbridge.
Delmarva Power is currently investing about $357 million specifically for maintaining and enhancing reliability over five years.
Delivery rates are just one component of the customer’s total monthly bill and cover the cost of maintaining safe and reliable service, investments in new technology, and infrastructure improvements. Delivery rates reflect the costs of the equipment and services needed to deliver electricity to Delmarva Power’s customers. Delivery rates reflect about 25 percent of a customer’s bill.
Electric supply rates, which are a separate component of the bill and are not related to this rate case, represent about 75 percent of the bill. Electric supply rates represent the electricity itself. Although the electric supply rate is reflected on Delmarva Power’s bill, Delmarva Power does not generate electricity.
Auctions are conducted each year in which the lowest bidder wins the right to supply electricity to Delmarva Power’s customers. As such, electric supply rates are adjusted periodically to reflect the cost of electricity that Delmarva buys for customers who do not choose an alternate electric supplier.
Customers with questions regarding billing and/or the rate adjustment can contact the Delmarva Power Customer Care Center at 1-800-898-8042 or go to www.delmarva.com.