Delmarva Power’s Delaware customers will see a an $15 bump to their monthly bills in June, according to the company.
Last year, Delmarva’s Standard Offer Service rate increased about 7%– or about $10 a month. The result of this year’s auction is a more than 9% percent increase.
"This is definitely not business as usual," Delmarva’s Regional President Marcus Beale said about the increase his customers will see to the supply-side of their bills.
Delmarva on Standard Offer Service rate increases
Beale clarified that the SOS rate is separate from the $67.8 million base rate increase his company filed for in December for grid operations.
Beale said the SOS rate, "is the price of electricity that's set in the PJM marketplace." And Delmarva does not control the SOS rate increase or profit from it.
It's based on Delmarva's annual bid to suppliers within PJM's Interconnection for the per-kilowatt hour cost of electricity. Delmarva is required to purchase and offer this as a default to customers who don't opt for a third-party supplier.
"We buy it as cheap as we can on that market," he said, "and basically offer that as a default option to our customers."
Beale said his company, as the delivery service, doesn’t make a profit from this increase and does not set those costs.
"Because of the supply crisis that we're in, due to the lack of additional generation being built, the prices in those markets are really high," Beale said.
Public Advocate: Delaware customers affected from all ends of energy market
Delaware’s Public Advocate Jameson Tweedie said the Public Service Commission’s review of the December auction for SOS rate found its results valid.
And he agreed that the SOS rate fluctuates with demand and availability of energy, causing the rise in this piece of customers’ bills.
"I don't have any reason to think that that that these particular SOS increases are anything other than than the open market," Tweedie said.
But right now, customers are being hit from all angles in the energy market.
"The overall impact of this on Delawareans, on utility customers, is just brutal." he said. "All of these costs are going up, and they're all going up at once."
Tweedie listed: gas rate hikes last year increasing, the rise for pass-through costs of electricity, and rate results for auctions on the capacity market, "spiked roughly one thousand percent over the last two to three years."
He added costs of transmission, the big infrastructure of transporting electricity determined by PJM and FERC, are also up.
Tweedie's office takes issue with Delmarva’s $67.8 million rate increase request for its delivery and grid expenses. And he doesn't agree with the rate of return the Exelon subsidiary lists in its ask to the Public Service Commission.
But because the SOS rate happens in a competitive auction that gets reviewed, Tweedie said, "there's not much space to push back on this one."
