Federal corporate tax break leads to lower gas bills for Delmarva Power gas customers

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Delmarva Power gas customers to see slight rate reduction, thanks to a lower federal tax rate

The Delaware Public Service Commission approved Delmarva Power’s regulatory rate review settlement thatpasses along federal tax savings to customers to the utility’s natural gas customers in northern New Castle County.

The settlement passes along thefull amount of the federal Tax Cuts and Jobs Act tax benefitsto Delmarva Power’s natural gas customers in Delaware, resulting in an approximate $3.5 million decrease to natural gas bills. The PSC had previously approved a similar reduction for electric customers.

Backers of the controversial tax act have pointed to lower utility bills as one of the benefits of the tax reduction. Critics have claimed that much of the windfall has gone into stock buybacks, rather than capital spending or employee pay increases.

“Ongoing maintenance and investments are critical to safely maintaining our 3,460 miles of natural gas infrastructure across northern Delaware,” said Dave Velazquez, CEO of Pepco Holdings, which includes Delmarva Power. “We appreciate the hard work and cooperation of all involved to reach a settlement that lowers bills for our customers and helps us continue the excellent progress we are making in modernizing our natural gas delivery system.”

A residential customer, using an average of 83 CCF in a winter month, will see a total monthly bill decrease of $4.36 or 4.6 percent during the heating season.

Customers also will see a variety of one-time and ongoing credits and refunds on their natural gas bill that reflects the tax savings, as well as other agreements from the settlement. New rates will go into effect within 30 days of the settlement approval date.

Natural gas rates have been dropping, due to new supplies coming out of Pennsylvania, with the savings at least partially offset by the costs of maintaining a safe system.

Delmarva Power initiallyfiled its natural gas delivery rate requestin August 2017to help recovermoney spent to maintain and enhance the local natural gas delivery system and other costs, such as technology upgrades and operational improvements.

In 2018, Delmarva Power will invest $50 million in natural gas infrastructure in northern Delaware. This includes modernizing more than five miles of natural gas mains each year, replacing existing natural gas mains with new plastic pipe, which is now the principal material used for natural gas systems because it is more durable and flexible.

The money spent on modernization and maintenance efforts continue to enhance efficiency, reliability, and safety for customers. Last winter, these efforts helped Delmarva Power meet record-breaking customer demand for natural gas in January.

The settlement provides customers the benefits of the federal tax reduction and resolves the pending request by more than offsetting the higher natural gas delivery rate.

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