Overview of Low-Income Restructuring
Legislation and Implementation
Delaware
Last Updated: September 2008
Restructuring legislation, signed March 1999, provides funding for low-income energy assistance and weatherization through a systems benefit charge (SBC) on Delmarva Power & Light Company (DP&L) customers.
Beginning October 1, 1999, a customer charge of 0.178 mills/kWh 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.
Senate Bill 35, signed by Governor Minner on July 24, 2007, doubles the funding for Delaware's Green Energy Fund. The bill increases the system benefit charge on the utility bills of residential customers from $0.178 mills/kWh to $0.356 mills/kWh of electricity used. The increased charge adds about 18 cents per month to the average residential customer’s electricity bill.
DP&L provided about $500,000 in 2007 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.
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.
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’s 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, 2006 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 resulted in an increase of about $54 per month.
The General Assembly passed legislation that automatically enrolled 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, 25 percent on January 1, 2007 and another17 percent on June 1, 2007. Starting January 1, 2008, customers were to begin paying back the amount deferred (about $415) over a 17-month period in monthly installments. Customers can opt-out of the rate phase plan.
On March 22, 2005, the Commission signed PSC Order No. 6598, which approved DP&L as the Standard Offer Service (SOS) supplier after May 1, 2006, with no specified termination date.
Currently only one competitive electric supplier is actively promoting services to residential customers. As of July 25, 2008, 7,332 residential customers, about 2.7 percent, have switched suppliers.
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 five years prior to 2001. 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.
Other Issues
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 percent 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, formed to help Delawareans manage their energy costs. In 2006, CEEG completed a series of statewide community events to help consumers cope with anticipated energy rate increases. CEEG’s website provides information on managing energy costs and energy saving tips.
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Page Last Updated: September 11, 2008
