Gov. Matt Meyer has called for an immediate rate freeze of a temporary hike in Delmarva Power and Light bills in addition to other measures designed to bring down energy costs for consumers.

“With the profitability numbers of Delmarva, of Exelon, it’s gouging customers for an interim rate hike to go into effect,” Meyer said during a press conference June 15 at Legislative Hall. “It’s not who we are, so we’re calling on Delmarva to pause that rate hike, and calling on the [Public Service Commission] to force them to do it. We’ve been talking to them for months trying to get them to do it. If they’re not willing to do it, we need to regulate that they should not put that interim rate hike into effect.”

In April, the Public Service Commission approved a temporary increase of about $15 per month for customers using 811 kilowatt hours of electricity. The increase went into effect June 1, and will be reflected on customers' bills in July, as part of a standard offer service auction for power supply.

In Delaware, Delmarva Power and Light is the only utility regulated by the PSC.

Echoing past statements, Meyer called out DPL’s parent company Exelon, a publicly traded company, for focusing too much on returns for its shareholders. Specifically, he said, DPL passes on about $200 million per year in profit to Exelon, which in turn provides a return on investment of more than 10% for shareholders.

“I’m asking the Public Service Commission to look at the rate structure, look at the return on equity, and make sure we’re putting ratepayers first and not the profitability of Delmarva and Exelon shareholders,” he said.

Delaware’s Public Advocate Jameson Tweedie said DPL’s pending $68 million delivery rate increase request, which will be considered by the PSC later this year, is its eighth base rate increase since 2009.  

In an unprecedented move, Meyer has called on Tweedie to file a petition with the PSC asking commissioners to act within the next six months to reset the utility’s profit model. A press release sent out the day after the press conference said Meyer would be the first governor to sign on to such a petition.

PSC Executive Director Matt Hartigan, who attended the June 15 press conference, declined to comment on Meyer’s rate freeze request.

Legislation seeks to cap utility expenses

New rules for public utilities seek to lower energy bills for consumers by capping expenses and fees normally passed on to ratepayers.

Under Senate Bill 326, which passed the Senate 20-1 on June 16, the Public Service Commission would cap the cost for nonmandatory capital spending at 5% of a regulated utility’s most recent rate.

“Today, this would represent a reduction in spending from about $110 million to $50 million,” said bill sponsor Sen. Stephanie Hansen, D-Middletown, during the June 15 press conference.

An amendment would cap spending at $70 million for 2026-27.

“So it’s a ramp down,” Hansen said.

Other savings include the cost of attorney and consulting fees, now passed on to ratepayers, which would be paid by shareholders.

“These costs often reach $1 million or more,” Hansen said.

The bill also requires a breakdown of surcharges and fees on utility bills, and new rules on rate changes by DPL.

Hansen quoted state energy officials who have said DPL is spending “to a budget instead of planned projects.”

“[This] ultimately leads to runaway retail rates with no benefit-cost ratio or real improvement in reliability,” she said.

A second piece of legislation, House Bill 233, which passed the House June 16 by a 25-9 vote with two not voting and five absent, would create a separate rate class for large energy use facilities, specifically hyper-scale data centers.

Bill sponsor Rep. Frank Burns, D-Newark, said the bill addresses facilities that draw thousands of megawatts of energy.

“HB 233 takes all of the costs that are created by these large-scale data centers, puts them in a bucket and makes sure that those data centers pay for that cost,” he said. “If not, we would be stuck with somewhere around an 80% increase in our electric bills.”

Both bills now move to committees before final passage – SB 326 to the House, and HB 233 to the Senate. Meyer said he supports both bills, and will sign them when passed.

Delmarva Power responds

Following the press conference, DPL President Marcus Beal said his company is willing to work with many components of SB 326, except for the cost cap.

“The cost cap, we know, is going to hurt our customers, is going to hurt reliability,” he said. “Those other measures, while we don’t love them either – we actually cover the commission’s lawyers in a rate case … but we recognize affordability is a big issue, we hear our customers, we know every dollar matters.”

Even though in recent action the price of power supplied by PJM Interconnection has been collared at $330 for a megawatt day, the price of power supply, which DPL and Exelon do not control, can fluctuate.

“We know those markets are out of control, and that’s more of a federal, state, national issue combined,” Beal said. “That’s why we are saying we need more generation.”

The call for more power generation is not new, and dates back to 2023 when PJM Interconnection issued a stark warning about the loss of power generation resulting from government-mandated power plant closures – a warning that has proved accurate.

Beal said 80% of what DPL – and its parent company Exelon – earns pays for power grid infrastructure such as poles, transformers and underground equipment.

As for HB 233, Beal said DPL largely agrees with the state on responsible growth, and large-load customers such as data centers should carry the burden for additional costs.

He said DPL has transmission service agreements with large-load customers so they pay for power improvements needed in advance, and protect DPL from incurring expense in the event the company leaves the area.

“Anything in that bill that is tied to protecting our customers from abandoned costs from a failed project, we definitely are in favor of that,” Beal said.