Electric power prices may decline slightly for customers of Delmarva Power.
The Delaware Public Service Commission released results of its reverse auction process for wholesale electricity going to customers of the utility.
The reverse auction process relies upon bidders’ awareness of the actions of other bidders in an attempt to drive prices down for both Delmarva Power and customers. Delmarva Power passes along the power costs and earns its profits by charging customers for the cost of maintaining its power system.
Of the12 companies interested in this year’s Request For Proposals (RFP), nine were eligible to bid: nine were actual bidders and six won a portion of Delmarva Power’s needs. The winning suppliers were Axpo, DTE, Exelon, Hartree, NextEra and TransAlta.
Delmarva held two separate auctions, one in December 2019 and one in January 2020 and acquired approximately 540 megawatts.
Based on the bid prices alone, the average cost of power on monthly bills will drop between 1.1 percent and 2.3 percent, depending on the size of the power user. The 1.1 percent figure covers residential and small commercial customers.
The auctions are held periodically for a portion of Delmarva Power’s electric needs as a way to reduce the chances of price spikes. Customers also have the right to choose other suppliers for their electricity.
Years ago, Delmarva Power customers were hit with a big increase in electric bills after the utility agreed to a temporary rate freeze as part of a merger agreement.
In recent years, electric prices have been trending downward, due to ample supplies, even though older coal-fired and nuclear power plants are being retired. So far, the gap has been filled by natural gas-powered plants, solar and wind.
The full version of the Technical Consultant’s Final Report can be found on the PSC’s website at https://depsc.delaware.gov/standard-offer-service/