Senate Energy Committee Conducts Hearing on Delmarva Power Increases
The Senate Environment, Energy & Transportation Committee held a three-hour hearing earlier today to examine the large increases in electricity bills experienced by many Delmarva Power customers.
Delmarva Power Region President Phil Vavala made a presentation in the Senate Chamber. "We're experiencing some extremely cold temperatures," he told the committee. "We experienced a peak in our winter electric load for the first time since the Polar Vortex of 2014-2015. We hit a new all-time winter peak between January 20th and January 23rd."
Natural gas, which Delmarva also supplies, saw usage rates rise during the same period to some of the highest levels seen in the last 25 years.
Mr. Vavala said his company adopted a new bill format in November intended to improve the display of information available to ratepayers. However, the change led some consumers to believe there had been additional charges added to the bill. "I want to reassure everyone...there are no new charges on the bill," he said.
Using his own Delmarva electricity bills as an example, comparing December to January, Mr. Vavala said 99% of the month-over-month increase was due to higher usage.
He emphasized that the distribution charge that many customers have pointed to as a culprit in their higher bills is a fixed charge that is multiplied by the amount of electricity used. "The more energy a customer uses, the higher their distribution will be," he said. Again pointing to his own bills, Mr. Vavala noted his home's electricity usage rose by 49% from December to January, while natural gas consumption jumped by 65%.
While Delmarva Power is owned by Exelon, a Fortune 200 company, the rates they charge to consumers are tightly regulated by the state Public Service Commission, which must approve any hikes.
Following the presentation, State Sen. Dave Buckson (R-Dover South) explored the issue of energy supply.
Under a state law enacted in 2021, electricity utilities must derive an increasing amount of their power from renewable sources. This mandate is known as the Renewable Portfolio Standard (RFP). At present, 25% of total electricity must be derived from renewables, with the percentage increasing annually, culminating at 40% in 2035.
While the RFP is not responsible for the recent escalation in customers' bills, Sen. Buckson questioned whether the Renewable Portfolio Standard was limiting supply options and requiring the transportation of renewable energy produced outside the state--both factors that could increase the cost of power to Delaware families and businesses.
In recently published materials, officials with PJM Interconnection, a regional organization that manages the flow of electricity across Delaware and 12 other states, have expressed similar concerns. They note that changing public policy and economic factors have led to the rapid retirement of fossil fuel plants without new renewable energy facilities available to replace the lost capacity.
At today's hearing, State Sen. Brian Pettyjohn (R-Georgetown) blamed government meddling for the problem. "We are creating a supply and demand imbalance," he told the committee. "We are tipping the scales of economic law...with the mandates we're placing on utility companies, requiring them to increase renewables without the renewables actually being there. It causes the cost of that to go up. It's natural economic law. Increasing the demand but not increasing the supply."
To watch a video of the entire hearing, click here, then select "New Recordings" on the left side of the page, then click on the Senate Environment, Energy & Transportation Committee meeting for February 14, 2025.
The examination of Delaware's energy present and future will continue on Monday, February 24, at 1 p.m. with a joint hearing of the Senate Environment, Energy & Transportation Committee and the House Natural Resources & Energy Committee.
The lawmakers intend to discuss Delaware's electric supply, reliability, and energy policy. PJM Interconnection, the Delaware State Energy Office, the Delaware Sustainable Energy Utility, and Reliability First (an organization operating under the Federal Energy Regulatory Commission) are expected to make presentations. For more information, including details on participation and watching the event, click here.
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