Overview of Low-Income Restructuring
Legislation and Implementation
Delaware
Last Updated: January 2007
Even though restructuring legislation was passed in March 1999, only one competitive electric supplier was offering services to residential customers as of December, 2006. About 2,488 residential customers, less than one percent, have switched suppliers.
Electric restructuring legislation , drafted by the state's two major power providers, Delmarva Power & Light (DP&L) and Delaware Electric Cooperative, allowed for a transition period for customers to choose their power supplier by March 31, 2005 .
On March 22, 2005 , the Commission signed PSC Order No. 6598 , which approves DP&L as the Standard Offer Service (SOS) supplier after May 1, 2006 , with no specified termination date.
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, 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 will result in an increase of about $54 per month. The General Assembly passed legislation that automatically enrolls 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, a 25 percent increase is due on January 1, 2007 and a 17 percent increase on June 1, 2007. Starting January 1, 2008, customers will begin to pay back the amount deferred (about $415) over a 17-month period in monthly installments. Customers can opt-out of the rate phase plan.
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 past five years. Rate caps for residential customers of the Delaware Electric Cooperative ended March 31, 2005 . Rates for Co-Op customers have increased about 6 to 8 percent since their rate freeze was lifted and are expected to increase further once long-term power purchasing contracts expire in 2007.
Restructuring legislation provides funding for low-income energy assistance and weatherization through a systems benefit charge (SBC) on Delmarva Power & Light Company customers.
DP&L provides $800,000 annually for low-income energy assistance, weatherization and furnace replacements. The Department of Health and Social Services, Division of State Service Centers, the LIHEAP grantee, administers the fund as a program that is separate from LIHEAP, mostly for clients at or above 150 percent of federal poverty guidelines.
Since October 1, 1999 , a customer charge of 0.178 mills/kWh (about $1.5 million annually) has been collected to fund environmental incentive programs for conservation, energy efficiency, and renewable energy. This money is distributed through the Green Energy Fund for DP&L electric customers or persons in Delaware receiving services from a non-regulated electric supplier which is contributing to the Green Energy Fund.
The Energy Alternative 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 up to 50% of the installed cost of residential and nonresidential photovoltaic, solar water heating, wind turbine, and geothermal heat pump systems. Information on qualifying systems, rebate reservations and payment procedures can be found in the Green Energy Fund Regulations.
The Consumer Energy Education Group (CEEG), a group of state government and industry representatives, has formed to help Delawareans use available resources to save energy and manage their energy costs. CEEG completed a series of statewide community events in 2006 to help consumers cope with anticipated energy rate increases.
Other Issues
The Environmental Incentive Fund for conservation and energy efficiency programs was created under HB 10. SB 93, signed June 2003, renamed the Environmental Incentive Fund the "Green Energy Fund," and placed it under the direction and control of the State Energy Office. SB 93 also allowed for a $1 million transfer from the Environmental Incentive Fund to the low-income program fund. This one-time appropriation was used to offset arrearages of DP&L customers.
The Delaware Public Service Commission (PSC) established the Electric Choice Education Group (Group) and directed a payment of $250,000, from DP&L and Delaware Electric for a three-year period, to design and implement a consumer education program. The Group developed an educational plan as part of its early activities but due to a lack of participation in the market by suppliers, the publicity and advertising campaign was put on hold.
Return to Utility Restructuring
Page Last Updated: January 3, 2007
