Delaware’s largest energy provider, Delmarva Power, says a recently approved interim rate shorts the company on what it’s legally allowed to recover from customers.
The Exelon subsidiary filed a complaint in Delaware Superior Court last week. It pushes back against a Public Service Commission decision that only allows the power company to implement an interim rate of about $34 million.
Delmarva’s regional president Marcus Beale said the PSC should not have factored in the $23 million Distribution System Improvement Charge, a semiannual rate adjustment utilities make for grid maintenance costs, to the interim rate the company asked to implement while the PSC evaluates its full rate request.
"That's DSIC, and by... setting that to zero, we believe that was not in compliance with the law," Beale said. "And we really need to make sure that is clear moving forward for interim rates, that is a separate regulatory mechanism."
Beale said during storms in Delaware last week, seven percent of Delmarva customers lost power. That reflects improved reliability, which he attributed to grid investments the company needs to recoup now.
Delmarva filed its third-rate increase request in five years last December for $68 million. More than $44 million of that was new revenue and approximately $23 million was the DSIC rate.
In June, it offered to cut its interim rate to approximately $45 million, which the PSC rejected for the $34 million rate it set in July.
The five member board debated in its July meetings how to apply new legislation, SB 326. The measure says regulated utilities are limited to implementing a temporary rate increase that amounts to half of what it asked for once it's seven months out from its request.
At the end of August, the company filed an updated request based on twelve months of data collected on actual grid investments at operation costs, which brought its total ask to $75.8 million. It's Delmarva's largest rate increase request yet.
The company serves more than 300 thousand power customers in the First State. Public filings show the Exelon subsidiary's board members and executives earn multiple millions of dollars annually, with stocks and benefits included.
Governor Matt Meyer said in a statement: “Delmarva wants to make this an issue about reliability, but it is really only about increasing their multi-million-dollar profits.”
Beale said the company cares about affordability, arguing the real cost driver for rising rates is generation, which is PJM.
"(PJM) upped the bill in July by about $17 a month, just to give you a comparison," he said. "So $17 a month versus 67 cents a month when we're talking about generation versus us building and maintaining a stronger, more reliable grid."
A lawyer with Delmarva said it doesn’t know the timeline for processing the appeal yet. The next step will be a briefing schedule set by the court.
