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Del. regulators eye Delmarva rate request

Randall Chase, Associated Press

DOVER, Del. (AP) -- A bipartisan group of Delaware lawmakers sent a letter to state utility regulators Tuesday criticizing Delmarva Power's request for a rate hike on electricity users totaling $42 million.

The utility says the proposed base rate increase, the latest in a series of such requests, reflects rising costs for providing electrical service. The proposal would increase the monthly bill for a typical residential customer using 1,000 kilowatt hours per month by 5.4 percent, or $7.63, to $148.86.

Lawmakers and representatives of several advocacy groups opposed to the rate request gathered in Wilmington on Tuesday to voice their concerns. Twenty lawmakers also signed a letter to the Public Service Commission urging regulators to carefully consider Delmarva's proposal and the "negative economic impact" it would have on thousands of Delawareans.

"The requested $42 million rate increase, representing a 19.6 percent increase on the delivery side of the bill, would be yet another dramatic rise in ratepayers' bills and is very alarming," the letter reads. "As our state slowly recovers from recession, Delaware families do not have the resources to pay more for electricity every time Delmarva Power asks for a rate increase. In light of this fact, we oppose this latest request in the interest of low-, middle- and fixed-income families who simply cannot afford it."

PSC members voted Tuesday to open a docket on Delmarva's latest request and entered the letter from lawmakers into the record. Pending a hearing on Delmarva's request, the commission approved Delmarva's proposal for an interim increase of $2.5 million that will take effect June 1.

Critics note that Delmarva's latest request is its third in as many years. Regulators approved a rate increase totaling $17 million in 2011 and a delivery-side rate increase of another $15 million last year. They also approved an increase generating $38.8 million to cover the costs of smart meters and depreciation for obsolete meters. Roughly $7 million of the meter-related increase was imposed this year, and an additional $31.8 million for smart meter replacement is expected to be phased in later this year and next.

"Over the last several years, we've seen the same scenario play out: Delmarva Power comes before the Public Service Commission, requests a large rate increase, is granted a slightly smaller increase, then comes back with another request," Rep. John Kowalko, a Newark Democrat and a leading critic of Delmarva Power, said in a prepared statement. "The part of the story that isn't told is that ratepayers not only foot the bill for the rate increases that are granted, but they also pay for the analysis and process the PSC and Delmarva must go through every time Delmarva files a rate increase request."

A spokesman for Delmarva Power, a subsidiary of Pepco Holdings Inc., said the company understands the concern legislators have for utility customers and is confident that the PSC will weigh the issue properly over the next several months.