Share: 

Commission staff requests investigation into Delmarva Power spending

Utility argues the request is unnecessary
The staff of the Public Service Commission is questioning whether a base-rate increase for Delmarva Power customers is necessary. BY KARA NUZBACK
May 20, 2013

Delmarva Power is requesting a rate hike, prompting employees of the state Public Service Commission to question the urgency of the utility’s planned multimillion-dollar investments.

Delaware Public Service Commissioners Jay Lester, Joann Conaway and Jeffrey Clark voted unanimously Nov. 29, 2012, to approve a $22 million settlement between Delmarva Power and the state, allowing customer rates to increase in 2013.

According to the settlement, a typical residential customer using an average of 1,000 kilowatt hours per month would see their electric bill go from $136.86 per month to $141.35 per month – a 3.3 percent increase.

On March 22, the utility sent a letter to the commission with an application for another $42 million increase in base rates for customers, or a 7.4 percent rise.  In its base rate case, the utility argues it is trying to make a fair return on its investment.  Delmarva Power attorneys Todd Goodman and Pamela Scott wrote that the request is a result of an increase in capital investment made by the utility to modernize and better serve its customers.

Opponents of the rate hike say the increase is too much too soon for Delaware residents still hurting from the recession.

The staff of the Public Service Commission filed an April 16 motion to investigate the appropriate level of investment needed to provide reliable service to Delmarva Power customers.

In the motion, attorney James McC. Geddes said the utility is already operating in excess of the commission’s reliability standards, and customers have no way to tell whether service is improving as a result of paying higher electric bills.

“Despite repeated requests by staff, it has received no assurance from the company that efforts are being made to provide customers with quantifiable methods by which to determine whether their electric service is improving on the margin,” Geddes wrote.

The commission also says Delmarva Power is making no effort to contain its increasing utility costs to its customers.

PSC asks that one public comment forum be held in each of Delaware’s three counties to discuss whether the utility’s proposed $397 million in investments over the next five years are necessary.  “Staff believes that the public deserves the right to discuss with Delmarva’s senior management why these reliability enhancements need to be made at this time,” Geddes wrote.

Goodman filed an April 22 response on behalf of Delmarva Power calling the PSC’s motion inappropriate and unnecessary.   He says the utility’s March 22 base-rate case will be subject to public feedback.  “However, to initiate a parallel, duplicative proceeding would not be in the best interest of customers, who would ultimately bear the costs of a second proceeding which would accomplish nothing more than can be done in the currently pending electric rate case,” Goodman wrote.

Goodman asks that the staff’s motion be denied.  To read the motion and response, go to depsc.delaware.gov.