Delaware state regulators on May 7 opened a docket to investigate Delmarva Power and Light’s proposed distribution infrastructure and reliability investments going forward for a period of up to five years.
Delmarva Power filed an application on March 22 to increase electric distribution rates by $42.04m, stating that it needs to invest about $397m in its distribution system over the next five years to replace infrastructure and enhance and maintain system reliability, the the state Public Service Commission (PSC) said in its order.
On April 16, PSC staff filed a motion requesting that the PSC open an investigation to examine the company’s proposed expenditures for reliability improvements over the course of the next several years to maintain adequate and reliable service.
The PSC also said that staff expressed concern that Delmarva Power may be investing more on distribution infrastructure and system reliability than is appropriate for ratepayer recovery or to meet certain reliability standards and sought to open a docket to investigate whether the level of the company’s planned distribution infrastructure and reliability investments going forward are appropriate.
On April 22, Delmarva Power filed a response opposing the creation of a separate docket to investigate its future reliability expenditures and instead contended that its reliability investments could be investigated in its currently pending base rate case.
On April 23, as directed by the PSC, staff, the Public Advocate/Attorney General’s office and Delmarva Power provided the PSC with agreed-upon language for a proposed order opening a docket to review the company’s planned distribution infrastructure and reliability investments over a future period.
The PSC also said it has determined that the proposed order, as jointly submitted, is appropriate for opening a docket to investigate the planned investments.
Joseph Rigby, president, chairman and CEO of Pepco Holdings (NYSE:POM), of which Delmarva Power is a subsidiary, said on May 3 that the company’s annual rate increase of $42m is based on a requested return on equity of 10.25%. As permitted by state law, an interim rate increase of $2.5m will be implemented on June 1, subject to refund. A decision is expected during 4Q13, he added.
Pepco Holdings has six pending rate cases across its jurisdictions, including Delmarva Power’s case in Delaware, that request an annual rate increase of $260m, Rigby said.