Rates to rise for Delmarva gas, electric customers 

Delmarva Power and Light customers can expect higher electric and gas bills come June after approval of a rate increase by the Delaware Public Service Commission April 22.

The commission approved a nearly 20% increase in electricity supply costs for customers, amounting to about $15 per month for a customer using 811 kilowatt hours. Approving increases for both gas and electric rates were Acting Chair Joann Conaway, Commissioner Kim Drexler and Commissioner Harold Gray.

Following the meeting, PSC Executive Director Matthew Hartigan said the rates were approved on a temporary basis pending final commission approval, for which no firm date has been set.

“It depends on the review and analysis done by the PSC staff and public advocate,” Hartigan said. “It typically takes six or seven months.”

Already in the works is a rate increase request by DPL to cover $67 million for its delivery costs, which has not yet been decided by the PSC.

There was no discussion before DPL’s interim electric rate increase, but before the meeting, Deputy Public Advocate Samantha Hajek said DPL does not earn a profit on the electricity supply, and her office has no reason to think the standard offer service auction wasn’t conducted fairly.

“The SOS auction is a competitive auction run by Delmarva under Public Service Commission supervision,” she said.

Electric costs will be offset slightly, also starting June 1, by a decrease in the Renewable Energy Portfolio Standards compliance charge by 11% from a rate of about $0.0058 to about $0.0052 per kilowatt hour.

The gas increase is the result of higher natural gas prices over the cold winter months, which DPL paid upfront. The Gas Cost Rate will increase from 67 cents to 80 cents starting May 1 – about $2 more or a 5% monthly increase for an average customer. 

Before the vote to approve the gas increase, Deputy Attorney General Kate Workman, counsel to the commission, said the commission and Delmarva Power agreed this is the best way to handle paying the under-collection by DPL, to which it is entitled.

“This is going to result in a small increase, but it’s going to help offset a much larger increase in the next [gas cost rate] case,” she said. “The raise right now is what we all think is in the best interest of the consumer.”

Delaware Public Advocate Jameson Tweedie said DPL sets the cost of natural gas each year before the winter season, and it should pass through to the customer with no profit by DPL.

However, with the unexpected cold winter, he said, both gas providers Chesapeake and DPL had under-recovery of gas costs because the cost of natural gas spiked dramatically beyond where they modeled it would cost.

Both initially filed a waiver, but that would have increased gas rates dramatically for the beginning of the heating season in November, so the decision was made to increase the price over the off-season when gas usage is not as high, Tweedie said.

“So the rate will go up, and hopefully it will not hit people’s pocketbooks as badly because they are simply not using as much between now and next winter,” he said. “That is not to say this isn’t a serious concern. It absolutely is, and if we continue to get abnormal weather, prolonged cold winters, or if we see what is currently happening that there is upward pressure in the natural gas market because of supply and demand across the region, that could be incredibly problematic.”

He said the increase is the best option for ratepayers as officials continue to address the cost of natural gas in the future.