Delmarva Power plans to file rate hike request this year

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Delmarva Power plans to file for a rate increase for natural gas and electric customers.

On Dec. 20, the Exelon utility informed the Delaware Division of the Public Advocate on their “intent to file an Application for an Increase in Gas Base Rates on or after February 21, 2020, and an Application for an Increase in Electric Base Rates on or after March 6, 2020.”

Under utility deregulation, Delmarva files for rate increases in regard to maintaining and improving the reliability of its electric and gas system. The cost of the power and natural gas itself comes from a rolling bid and buying process designed to reduce price spikes.

Commercial and residential customers also have the right to buy electric power from other vendors. Some offer options that include power that does not come from coal or natural gas.

Utilities are under a mandate that calls for 25 percent of electricity to come from alternative energy sources by 2025. The mandate and other alternative energy policies have been blamed by critics as a reason for the region’s higher electricity costs.

Delmarva operates a natural gas system in northern Delaware and provides electric service throughout Delaware.

The Public Advocate reviews the rate increase and makes recommendations as the rate request goes through the state Public Service Commission.

More recently, regulators have been skeptical of rate hikes tied to further increases in the reliability of electric service as the outage rate dropped below 10 percent.

At the same time, Delmarva is dealing with an aging system that includes old transformers and underground lines in residential areas that were installed decades ago.

Another concern comes a need to harden the system, due to prospects of more severe storms, perhaps driven by climate change.

Delaware is also served by municipally-owned utilities in Newark, Dover, Lewes and other areas as well as Delaware Electric Cooperative in Kent and Sussex counties.

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