Ocean City Today

Delmarva Power gets part of rate hike request approved

PSC gives nod for increase, but company only granted half what originally sought
By Brian Gilliland | Feb 15, 2018

(Feb. 16, 2018) Local electric bills from Delmarva Power will see a nearly $3 per month increase starting with the next bill, as the state Public Service Commission has approved the utility’s request for an increase, but only half the amount the company originally sought.

The increase will inject $13.4 million into the utility, according to the commission. Delmarva Power originally sought a $27 million increase, which was revised down to $19 million, while PSC staff recommended an increase of $11.1 million and the Office of People’s Counsel determined a $7.2 million increase was appropriate. The parties settled at $13.4 million, according to the commission.

The Office of People’s Counsel is a state agency representing the interests of residential consumers of electricity, natural gas, telecommunications, private water and certain transportation services.

“During the proceeding, staff noted that compared to other Maryland electric utilities, Delmarva spends the highest amount per customer on reliability improvements and recommended a small workgroup to further investigate whether Delmarva’s reliability spending plan through the year 2020 is cost-effective,” a release prepared by Tori Leonard, public information officer for the PSC reads. “The Commission approved the convening of the workgroup with participants to include staff, the Office of the People’s Counsel and Delmarva Power.”

Delmarva Power has agreed to report its findings to the workgroup 45 days prior to filing its next base rate case or by October 31, 2018, whichever is earlier.

The utility provides power to 204,000 customers in 10 counties, including Worcester.

In 2016, the company reported it spent $68.1 million on reliability upgrades to its distribution network, and planned to spend $73.2 million this year. Under the public utility article in Maryland code, Delmarva Power is entitled to a reasonable return on the fair value of the company’s property devoted to electric delivery.

Based on a test year ending in September 2017, the company sought a little more than $27 million, and a rate of return on equity of 10.1 percent. According to its application, the company is currently earning 6.18 percent through the current rate structure.

Public comment was solicited on the increase late last year, with the closest open session held at Salisbury University in Wicomico County.


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