Delmarva Power announced that Delaware officials have agreed on a proposal to decouple the company’s distribution rate revenue from sales volume. The decoupling process allows utilities to charge their customers using the same model seen in the cable television industry: consumers pay a set monthly regardless of how much they watch TV.
According to Delmarva Power, the distribution rate for customer’s electricity bill comprises 25 percent of their overall bill and pays for the utility’s costs to run customer service, deliver power to homes and businesses and to maintain substation equipment. Decoupling only pertains to this portion of the consumers’ bill.
Delmarva spokesperson Bridget Sheldon told Community News that because 75 percent of their bill is still usage driven, it benefits customers to reduce power consumption. “We can help them use lesser energy while maintaining the fiscal [soundness] of the company.” Sheldon acknowledged that decoupling would “impact each customer differently. There will still be a customer charge and that will, in all likelihood, be higher. I can’t say by how much at this point.”
The fixed charge will be determined by how much a customer uses when demand is at its peak. Decoupling enables the utility to recover its customer-related and delivery costs only at at a fixed level authorized by the Delaware Public Service Commission.
Public Service Commission Executive Director Bruce Burcat says, “This agreement is an important piece of the puzzle that will help the state make the transition into the new era of energy use, and it will do so in a way that seeks to ease the impact on customers who would otherwise be most significantly affected by the change. The commission staff worked to see that customers would not see any significant rate impacts on their distribution rates as a result of decoupling, which is mandated by law.”
Public Service Commission spokesman David Bonar adds that decoupling gives consumers an opportunity to decide when to use or not use energy up to the quarter hour. “If you use energy at four in the afternoon and you’re using… a washer or dryer, you will end up paying a higher rate. We hope it will encourage people to utilize energy at times of the day that will save them money, such as at 9 o’clock at night.”
Community News reported that Gary Stockbridge, president of the Delmarva Power Region, said, “We recognize the need for greater energy independence, environmental protection and for helping customers to better manage their energy use and to help them keep down the costs. This proposal, along with other changes such as the installation of smart meters and rate incentives, will allow Delmarva Power to help Delaware achieve the state’s vision.”