State Senator Stephanie Hansen (D-Middletown) is sponsoring a bill that adds significant regulations to Delaware utilities, which passed on the State Senate floor after more than three hours of questioning and debate. And two other bills she sponsored cleared in house committee.
SB 326 includes utility rate caps, heads to the House
Hansen (D-Middletown), a leading lawmaker on energy and environmental policy, said SB 326 is about stronger oversight of utility spending.
The measure asks for independent audits every five years of public utilities under the authority of the Public Service Commission. Those include Delmarva Power and Chesapeake Utilities, along with solar, water, and wastewater providers in the state.
And other bill provisions call out Delmarva Power specifically. Hansen said Delmarva delivers power for thousands of Delawareans, "but there's evidence to show that overspending without an appreciable increase in these metrics is taking place."
The bill limits what Delmarva Power can recover for nonessential infrastructure spending, capped at 5% of the rate base approved at its most recent case.
"Mandatory" spending would be exempt from the cap. This includes spending on Delmarva's vegetation management program, its inspection and maintenance program, new business requirements, facility relocations, regulatory requirements, and on emergency failures.
Hansen said the 5% cap would decrease spending from $110 million to $50 million annually. But an added amendment, capping spending at $70 million next year, gives the utility a more gradual decrease.
Hansen added the cost control is an element of the bill that the Public Service Commission, Public Advocate, and the Governor's Office, "feel very strongly about."
But State Senator Jack Walsh (D-Stanton) said the provisions risk grid reliability.
"I know in my district, in previous years it wasn't as reliable as it is now," he said. "I know what Delmarva Power has done in my district, they've replaced substations, they put reclosers in."
Matt Harding, Executive Director of the PSC said his organization doesn't control what projects a utility does. But essential work projects outlined in the bill as exemptions from the rate cap should protect reliability.
The PSC has identified parts of the system with reliability issues in the past, Harding said. Delmarva, "to their credit, has addressed that. So we support reliability, but not at any price."
And new businesses coming online would also not be affected by the rate cap, Harding said.
But Matthew Bowen, Delmarva Power’s Director for Reliability Engineering Programs, argued the new limits will hinder the company’s ability to make grid repairs and improvements. He listed Wilmington's substation at Christiana and modernizing Wilmington’s grid as projects that will be affected.
"When we talk about reliability, it's a constant cycle of putting into it in order to get out of it," Bowen said.
To repair Wilmington's substation, Bowen said it needs to be off-loaded. And Delmarva needs to have increased capacity to switch and pick up customers at other substations.
These types of projects and other preventative work protect grid reliability, he said. Capacity expansion is non-mandatory, and will make it hard to make predictive expansions so that the system is ready for new business.
SB 326 would limit what utilities can collect on an interim rate before the Public Service Commission rules on a rate increase request.
As it stands, if the PSC hasn't decided on a rate increase, utilities can impose its full proposed increase after seven months. Hansen's bill says utilities can put 50% of the rate increase in place after seven months and 75% at 12 months, if the commission hasn't made a decision.
Hansen said Delmarva has not been responsive to suggestions from the Public Advocate office during Infrastructure, Safety and Reliability Plan negotiations to lower customer costs.
"The overarching principle that we're trying to get to with this bill is that there is there is overspending and how the budget is put together," she said.
Senate Bill 321 simplifies bills for solar users
Hansen's measure aimed at simplifying energy bills for solar customers cleared in the Natural Resources & Energy Committee Wednesday.
Right now, community solar participants get two monthly bills. One is from their utility company with the discount for being a solar user. Another bill comes from the community solar facility for its subscription fee. And solar customers then pay these separately.
SB 321 says solar customers would instead get one bill from their utility, with the solar subscriber fee included.
Delmarva's already implemented similar systems, known as net crediting, in states like Maryland.
Debra Heffernan, a house sponsor for the proposal, said utilities will set up a third-party account for community solar subscribers. And this will protect any cost shifts to other utility customers who don't use solar.
This way utilities like Delmarva, "just do the physical billing," she said. "They're not taking responsibility for the cost or having to recoup the cost."
The bill accounts for possible new administrative and information technology costs for utilities. It says utilities can recover these through a fee approved by the Delaware Public Service Commission. The fee can't be more than 1% of the subscriber bill credits' value without permission from the PSC.
The new billing method would be studied by the PSC and implemented in October 2027.
SB 9 on wetlands ready for House floor
Another bill of Hansen's moved forward, out of the House Natural Resources & Energy Committee.
Senate Bill 9 creates regulations for thousands of acres of freshwater wetlands, after federal roll backs in 2023.
The EPA says Delaware has more than 300 thousand acres of wetlands, and most of these are non-tidal or "freshwater."
Delaware does have tidal wetlands protections, created by the Clean Water Act of 1973. But the state largely relied on federal standards for its inland wetlands.
Kristen Travers, Director of Conservation for the Delaware Nature Society, spoke in favor of the bill. She warned that the rollbacks removed protections for 75 thousand acres of Delaware's non tidal wetlands.
"They are now vulnerable to degradation and destruction that can negatively impact our communities and our agricultural industry," she said.
The bill creates a regulatory advisory committee, which will be tasked with assigning levels of protection and permitting processes for the wetlands during a year long process.
Once the advisory committee's work is done, permits and rules will be enforced by the state.
The bill sets land use activities that are exempt from needing a permit, which include farming, hunting, fishing, and forestry. Other activities in the bill are conditionally exempt from a permit, depending on the activity and wetland condition.
If the bill passes, the regulatory advisory committee will start meeting in August 2026. Once it's finished setting up a permitting framework, it will be enforced by DNREC.
Rep. Richard Collins said he's concerned about the make up of the committee.
Emily Knearl with the Nature Conservancy worked on the bill over the last two years. She defends the committee's make up and structure for decision making. Official decisions from the committee will need to have a majority-plus-one vote.
"The reason for that is you're never going to hit that number unless you get all of the environmental folks and some business folks," she said. "Or all of the business folks and some of the environmental folks."
The Wetlands Regulatory Advisory Committee will have 25 members, including county government officials, farmer groups, environmental organization representatives, and wetlands experts.
House Natural Resources & Energy Committee Meeting moved it forward, and it’s ready for consideration by the full chamber.
