Delmarva Power is asking the Delaware Public Service Commission to consider a new way to review rate increase requests.
The proposal reverses years of basing rate increases on infrastructure and delivery costs of the previous year. Currently, Delmarva spends on capital improvements and delivery costs, then seeks rate increases to recover those costs.
The plan, submitted earlier this week, calls for Delmarva and the PSC to agree on the company’s spending over four years and approve rates based on that.
Although the rates would be frozen, the possibility that reasonable, unaccounted for circumstances could result in rate increases. However, Delmarva Vice President Glenn Moore says rates would only be increased if approved by the Delaware Public Service Commission.
"It doesn’t say rates can’t change,” Moore states, “it only gives us the right that if something unforeseen, that they would agree we couldn’t account for or foresee, occurred and then they could look at that particular instance and determine whether rates should go up or down."
Delmarva believes the proposal will allow customers to plan ahead for rates and save the yearly cost of time consuming and expensive rate litigation.
Delmarva also submitted a rate plan for the next four years that would raises rate for typical residential consumers an average of less than $2.42 a year.
Delmarva officials say it’s needed in part to keep up with rising demand. Delmarva President Gary Stockbridge adds that changing weather patterns also require stricter reliability standards.
"[The plan is] very much tied to these reliability investments,” says Stockbridge. “We understand customers want to understand 'What's the benefit I'm getting for the investments you're going to make?' And those standards would be 35 to 40 percent improved over the current standards, and we back them by refunds if we missed them in any given year of the plan."
