Tuesday, March 28, 2006

Update on the 59% Electricity Rate increase in Delaware on May 1st

Electricity deregulation started in 1999 in Delaware is set to finally bear its rotten fruit on May 1st. Unless the legislature does something to prevent or delay the 59% increase in electricity rates, Delmarva Power residential customers are going to have heftier bills just as summer air conditioning begins to slurp up the juice.

Tina Farr must have received the same letter (click to the left to see) as all Delmarva power customers and I did. She points out in a letter to the editor that the rate increase only affects the supply part of your electric bill and not the delivery. Tina calls Delmarva Power to task for their obfuscation of the real increase. She calculates that the delivery portion will actually increase 75% in the summer and 104% in the winter, but that when averaged with the unchanged delivery portion averages to 59%. That is the increase we will see in our bills. In the Delmarva Power letter I received:
The new SOS supply and transmission charges set to take effect May 1st are:
  • Summer- $0.110382 per kWh;
  • Winter - $0.122175 per kWh for the first 500kWh and $0.104943 per kWh for winter usage over 500 kWh.
The current winter rate from my bill is $.052372 per kWh for the first 500kWh so you can see why the above is a whopping increase. Don't bother looking for the rates (or tariffs) on the Delmarva power website, they point you to useless 114 page .pdf documents.

Delmarva has proposed phasing in the increase to the legislature and the public utility commission, but they better work fast if they are to avert the increase in time. All of those crazy proposals suggested a few months ago seem to have disappeared in light of this one. I wonder if they can lower prices without permission, but need permission to raise them. The proposal is quoted below:
"Delmarva Power has proposed a three step phase-in of the higher rates for residential customers, with one third of the increase effective May 1,2006. Another one third would take effect January 1, 2007, and, assuming no further increases in wholesale prices, the final third would take effect June 1,2007."
They do include a chart showing where we will stand with respect to other electricity suppliers in the region. I have taken the data and replotted it here.

The red bar represents the estimated $144.03 monthly bill for a typical 1000kWh month vs. a low of $102.78 from the Delaware Electric Co-Op to a high of $167.84 in Atlantic City, New Jersey. Let me point out again that commercial customers do have choices and hence there is competition and better rates for that market. Competition failed to materialize in the residential market in Delaware, thus there is one source for us Delmarva customers, and one price. This increase just makes me want to get solar panels for electricity and hot water generation even faster. Definitely for the next house.

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1 comment:

paul said...

GO solar AND never pay an increase again.