Del­marva Power rate hike ap­proved

Record Observer - - Front Page - By CHRISTO­PHER KERSEY ck­ersey@ches­pub.com

BAL­TI­MORE — The Mary­land Pub­lic Ser­vice Com­mis­sion has ap­proved a Del­marva Power rate hike, af­fect­ing 203,000 cus­tomers on the East­ern Shore, in­clud­ing Queen Anne’s County.

Ef­fec­tive im­me­di­ately, the rate hike will mean the av­er­age res­i­den­tial cus­tomer will see an in­crease of $10.84 more a month or a 7.36 per­cent hike, ac­cord­ing to the Pub­lic Ser­vice Com­mis­sion.

The av­er­age res­i­den­tial cus­tomer is con­sid­ered to use about 1,000 kilo­watt hours a month.

When ren­der­ing its de­ci­sion, the com­mis­sion cut Del­marva’s re­quest for ad­di­tional rev­enue through the hike by about half. Del­marva’s orig­i­nal pro­posal would have re­sulted in an in­crease to the av­er­age res­i­den­tial monthly bill by $21.42.

In its an­nounce­ment on Feb. 15, the reg­u­la­tory agency said it “ac­knowl­edges the bur­dens that in­creased rates place on ratepay­ers, par­tic­u­larly low-in­come cus­tomers and se­nior cit­i­zens.”

The com­mis­sion said it strived to limit the rate im­pact while not­ing that, this com­ing April, res­i­den­tial cus­tomers will re­ceive a $50 credit in that month’s bill, which Del­marva com­mit­ted to as part of the merger of Pepco Hold­ings Inc. and Ex­elon Corp., which in­cluded Del­marva Power.

Last year, the agency ap­proved rates for stan­dard of­fer ser­vice — the elec­tric sup­ply por­tion of cus­tomers’ bills — that will re­duce rates for Del­marva’s res­i­den­tial cus­tomers by an av- er­age of $123 a year be­gin­ning this June.

As for the rate hike just ap­proved, the af­fect on busi­nesses and lo­cal gov­ern­ments is un­clear.

“We do not have a com­pa­ra­ble bill im­pact fig­ure for com­mer­cial and in­dus­trial cus­tomers since their us­age varies so widely, but nearly all cus­tomer classes will see an in­crease,” said com­mis­sion spokesman Lori Leonard.

“The rev­enue re­quire­ment is not al­lo­cated evenly across the cus­tomer classes, so the in­crease would not be the same for each,” she said.

Be­sides the in­crease in the dis­tri­bu­tion rates, the fixed res­i­den­tial cus­tomer charge was ap­proved to in­crease by 23 cents a month.

In a state­ment, the com­mis­sion took the view that it “has de­nied a sub­stan­tial por­tion of Del­marva Power & Light Com­pany’s re­quest to in­crease its elec­tric dis­tri­bu­tion rates by $66 mil­lion, grant­ing in­stead a rev­enue in­crease of $38.3 mil­lion — mod­i­fy­ing the chief pub­lic util­ity law judge’s pro­posed or­der in the case, is­sued on Jan­uar y 4.”

The chief judge’s pro­posed or­der, grant­ing the com­pany a $38.2 mil­lion in­crease, was ap­pealed by the com­pany and the Mary­land Of­fice of Peo­ple’s Coun­sel and was later af­firmed in part and re­versed in part by the com­mis­sion, said the state­ment.

The com­pany had also re­quested to in­crease the fixed res­i­den­tial cus­tomer charge to $12 per month (from the cur­rent $7.94). The com­mis­sion’s or­der, how­ever, re­versed the de­ci­sion of the Chief Judge (which would have au­tho­rized an in­crease to $9.43 per month) and in­stead au­tho­rizes Del­marva to in­crease its res­i­den­tial cus­tomer charge to $8.17 (or just un­der 3 per­cent).

About 65 per­cent of Del­marva’s re­quest in­cluded re­cov­ery of cost re­lated to re­li­a­bil­ity ex­pen­di­tures and cap­i­tal in­vest­ments in smart me­ters.

The com­mis­sion af­firmed the chief judge’s find­ing that Del­marva’s smart phone sys­tem is cost-ben­e­fi­cial, but the com­mis­sion’s or­der di­rects the com­pany to con­tinue to de­velop ways to in­crease the types and amounts of such ben­e­fits that cus­tomers can re­ceive in the fu­ture.

Del­marva also sought ap­proval for the hike to ex­pand its grid re­siliency pro­gram by more than $9 mil­lion over two years.

De­tails of the com­mis­sion’s or­der can be found at the or­ga­ni­za­tion’s web­site of psc.state.md.us. If us­ing the search en­gine, the or­der num­ber is 88033, case num­ber 9424.

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