Can Our Public Servants Keep Delmarva Power Company Under Control? PSC Public Hearing Set For 7PM October 16th In Wilmington

Delaware Liberal's Cassandra Marshall wrote must-read post last week ~ In Which We Find Delmarva Power Using Ratepayers For Capital Financing. She kills it: "This risk-shifting by corporations from their shareholders to consumers really needs to come to an end. Delmarva’s advanced cost recovery scheme isn’t especially innovative and all it does is to accelerate the funds transferred from ratepayers to Delmarva without any guarantee of useful capital projects in their wake." ~

Or, Delmarva wants its ratepayers to take on more of the risk of capital project construction while they retain the profits from the use of that project.  Via the NJ, they are touting this as an innovative rate approach — one that will allow customers some stability in their bills for a few years:..........So. Delmarva charges you more and puts the excess in the bank to fund some future capital spending project. They get the use of your money for some period of time before they spend it AND they get to avoid some of the financing costs. Now, if they build something, they no longer have much incentive to control the costs of this thing, mainly because they have the money. Or part of it — meaning that ratepayer money is at risk and if they overrun the project it is easier to come back to the PSC to beg for more. Who wants an incomplete project? Or worse. Delmarva collects up the money and never does these capital projects. Who makes them give the money back or at least spend on capital projects?

It's a shame that we have to rely on the blogs to get to the heart of things, no? PSC is holding a public hearing next Wednesday, Oct. 16 at 7 p.m., at the University of Delaware’s Arsht Hall, 2600 Pennsylvania Ave., Wilmington.

(WDEL) AP reports ~ Regulators mull Delmarva Power rate plan

Delmarva Power is asking Delaware utility regulators to open a docket on the company's proposal for a long-term rate plan. Delmarva Power last week proposed a plan that would set rates through 2017. The plan would replace a pending rate case Delmarva Power filed in March. Both plans were to be discussed at Tuesday's Public Service Commission meeting in Dover.

Delmarva says the long-term plan would result in a lower- than-authorized rate of return for the company, and that extending the period between rate filings would save regulatory filing costs. If approved, the long-term plan would replace the pending rate case. A typical residential customer would pay about $2.40 more per month over the four years.

From (News Journal) Aaron Nathans' story ~ Delmarva asks for new plan from commission - seeks new way of calculating rates

Delmarva Power is proposing the Public Service Commission change the way it reviews and approves rate in­crease proposals.........But one utility analyst said such ar­rangements shift financial risk of major construction projects from a utility to its customers, and can result in less regula­tory oversight of a utility’s spending. Delmarva officials dispute both conten­tions.

........Currently, Delmarva, the state’s only regulat­ed electric utility, must make its capital invest­ments, then come into the Public Service Com­mission to justify the spending and “recover” the costs from ratepay­ers during a legal pro­ceeding. Under Delmarva’s new plan, the utility and the PSC would agree upon Delmarva’s spend­ing ahead of time, plan­ning four years into the future. Delmarva offi­cials call the plan inno­vative, saying they are unaware of any other ar­rangement like this at comparable electric utilities around the country.........The plan would re­duce what the utility calls “regulatory lag” – the time between when Delmarva spends mon­ey, and when the PSC ap­proves Delmarva get­ting the money back from customers, along with a profit margin. The company cur­rently has a maximum allowed profit level of 9.75 percent, but in re­cent years the company has complained it has earned far below that – most recently it was 3.6 percent, the company stated in its rate case filed earlier this year. The proposed system would make it easier for Delmarva to earn closer to this maximum autho­rized profit level.

Scott Hempling, a utilities attorney in Maryland who has con­sulted for the Delaware PSC, said when a utility gets approval to charge customers for a major construction project be­utility fore it is built, it shifts the financial risk from the company to its customers. It is a good idea in such circumstances to consid­er reducing the utility’s maximum allowed profit level to reflect that lower risk, he said.........Hempling said a utility can promise it won’t ask for more money than what’s in a four-year plan, but neither a commission nor a state law can prohib­it the company from re­neging on that promise.

More Delmarva Power Company news in a recent letter ~ Bloom surcharge unfair to some consumers

Since the restructuring of the electric utility industry, electric generation has been separate from electric delivery. You can choose to have Delmar­va supply and deliver the elec­tricity or just be the delivery ve­hicle if you choose an alternate supplier.

I have chosen Clearview for my alternate energy supply and cannot get an answer as to why I pay a Bloom Energy surcharge since I do not use Delmarva Power and Bloom Energy for my energy supply.

Is there no one in the Public Service Commission, Delmarva Power or the General Assembly who can and will explain why we pay a surcharge for energy we will not use? As a subscriber to The News Journal, I will wait to read the explanation.

William R. Abernathy

Wilmington  

Meanwhile, next Wednesday is also the big day for Bloom on UD's STAR Campus (News Journal) Aaron Nathans reports ~ Bloom’s CEO to return to Delaware

Bloom Energy is sending out invita­tions for its Oct. 16 official opening of its Newark manufacturing facility, and its guest list includes some prominent names. Bloom’s co-founder and CEO, KR Sridhar, is scheduled to speak, as well as Joseph Rigby, chairman, president and CEO of Pepco Holdings Inc., which is Delmarva Power’s parent company.

Also speaking will be Gov. Jack Mar­kell, who campaigned to bring Bloom to Delaware, as well as University of Delaware President Patrick Harker. The manufacturing center sits on the university’s Science, Technology & Ad­vanced Learning campus, on the site of the former Chrysler plant. Other scheduled speakers are Sen. Tom Carper, D-Del., and Barry Sharpe, the plant’s manager.

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