Delmarva Power seeks $21.1m increase in base distribution revenue in Delaware

For a typical residential customer using an average of 845 kWh per month, the average monthly total bill impact is estimated to be $3.68, or 3.42%, of the total bill, the company said

Exelon‘s Delmarva Power, in a March 6 application filed with the Delaware Public Service Commission, said that it is requesting a $21.1m increase in base distribution revenue, based on a March 31, 2020, test period and a rate of return on equity (ROE) of 10.30%.

The company noted that it is also requesting that $3.2m of revenues currently recovered through the Distribution System Improvement Charge (DSIC) be transferred from the DSIC surcharge into base distribution rates. Delaware Gov. Carney in June 2018 signed into law Senate Substitute 1 for Senate Bill 80, which replicated and extended to electric and gas utilities the same authority that had previously been granted to water utilities to implement an interim rate mechanism known as the DSIC. The company added that implementation of the DSIC has allowed it to begin recovery, in a timely manner, of certain eligible distribution system improvements not covered in Delmarva Power’s last general rate case filing, thus avoiding the need to file a rate case since August 2017.

For a typical residential customer using an average of 845 kWh per month, the average monthly total bill impact is estimated to be $3.68, or 3.42%, of the total bill, the company said.

As noted in the application, the most significant factor supporting the requested electric base rate increase is the need to recover costs associated with infrastructure, technology, and other investments made by the company, and anticipated to be made prior to the rate effective period, as well as to maintain reliability, improve reliability where necessary, improve customer service, comply with merger-related commitments, and comply with applicable provisions of state and federal law.

The company said that at current rates and based on a partially forecast test period of six months of actuals and six months of forecast data ending March 31, 2020, the fully adjusted Delaware electric distribution rate of return (ROR) is 5.22%, which translates to a fully adjusted ROE of 6.46%. That compares to an earned ROE of 7.41%, the company said, adding that even with the DSIC revenues included, the company’s ROEs are below the 9.70% ROE level approved by the commission in another docket, and are further below the 10.30% ROE being requested in the March 6 application.

In a March 9 statement, the company said that over the last two years, it has undertaken critical projects to modernize and strengthen the local energy grid in Delaware, with key electric system modernization projects including substation technology upgrades and key natural gas system modernization projects including the Park Place Project, which was completed in Newark, Del., and entails the installation of new gas line to strengthen the system and improve reliability.