State PBF/USF History, Legislation, Implementation
Last Updated: April 2013
Rate Assistance and Energy Efficiency
Restructuring legislation, signed March 1999, provides funding for low-income energy assistance and weatherization through a systems benefit charge (SBC) on Delmarva Power & Light Company (DP&L) customers.
Beginning October 1, 1999, a customer charge of 0.178 mills/kWh has been collected to fund environmental incentive programs for conservation, energy efficiency, and renewable energy. Senate Bill 35, signed on July 24, 2007, doubled the funding for the Green Energy Fund by increasing the SBC on the utility bills of residential customers to 0.356 mills/kWh of electricity used. This money is distributed through the Green Energy Fund for DP&L electric customers or for persons in Delaware receiving services from a non-regulated electric supplier which is contributing to the Green Energy Fund.
The State Green Energy Program, established under the 1999 restructuring legislation and funded by the Green Energy Fund, began in January 2002 for DP&L customers. Under the program, the Delaware Energy Office offers rebates for the cost and installation of residential and nonresidential photovoltaic, solar water heating, wind turbine, and geothermal heat pump systems. Information on qualifying systems, rebate reservations, payment procedures and regulations can be found at the Delaware Energy Office website.
Another surcharge of 0.095 mills/kWh collects about $800,000 annually to fund low-income fuel assistance and weatherization programs. These funds are split evenly between LIHEAP and the Weatherization Assistance Program (WAP).
The Division of State Service Centers, the LIHEAP grantee, administers the low-income funds as a program that is separate from LIHEAP, mostly for clients at or below 200 percent of federal poverty guidelines.
Electric restructuring legislation, drafted by the state's two major power providers, DP&L and Delaware Electric Cooperative, allowed for a transition period for customers to choose their power supplier by March 31, 2005.
DP&L, the state's largest power provider, opened competition to residential customers on October 1, 2000. Residential customers received a 7.5 percent rate cut until September 30, 2003. As part of a DP&L-Pepco merger settlement that was completed in August 2002, the residential electric rate increased by less than 1 percent after September 30, 2003 and was frozen until May 2006.
After May 1, 2006, DP&L's electric rates for residential customers increased approximately 59 percent. For a typical customer who uses about 1000 kWh of electricity a month, this resulted in an increase of about $54 per month.
The General Assembly passed legislation that automatically enrolled all of DP&L's residential customers in an Electric Rate Phase-In Plan which allows customers to spread the higher electricity rates over a period of time. Under the Phase-In Plan, rates increased 15 percent on May 1, 2006, 25 percent on January 1, 2007 and another 17 percent on June 1, 2007. Starting January 1, 2008, customers were to begin paying back the amount deferred (about $415) over a 17-month period in monthly installments. Customers could opt-out of the rate phase plan.
On March 22, 2005, the Commission signed PSC Order No. 6598, which approved DP&L as the Standard Offer Service (SOS) supplier after May 1, 2006, with no specified termination date.
Retail choice for residential customers of Delaware Electric, a subscriber-owned cooperative, began April 1, 2001. No rate cut was provided since the Coop's customers received a 5 percent rate cut during the five years prior to 2001. Rate caps for residential customers of the Delaware Electric Cooperative ended March 31, 2005. A 7.9 percent rate increase was approved in April 2011 followed by a 4.1 percent increase for July 2011 and another 3.8 percent increase for July 2012.
Starting in 2008, Delaware has participated in the Regional Greenhouse Gas Initiative (RGGI), a coalition working to limit carbon dioxide pollution through a cap and trade system. Participating states limit the amount of CO2 that can be emitted by their power plants and auctions of CO2 emissions allowances are conducted quarterly.
SB 263 requires 65 percent of Delaware's auction proceeds be directed to the Delaware Sustainable Energy Utility (SEU), the entity tasked with providing energy efficiency and renewable energy programs for households and businesses.
Another, 15 percent of the CO2 allowance proceeds is directed to low-income consumers — 10 percent goes to the WAP, and 5 percent is directed to LIHEAP.
Beginning April 2013, RGGI funds are providing benefits to income eligible households at 200 percent of poverty or below to help defray energy costs. These funds, $400,000 per year, are administered through Family Support Services.