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Understanding the City of Newark Utility Rate Increase
Customers will see higher utility bills effective this month
Due to circumstances outside of its control, the City of Newark, a community electric utility powered by the Delaware Municipal Electric Corporation (DEMEC), is increasing the current Revenue Stabilization Adjustment (RSA) by $0.01367 per kilowatt-hour (kWh). This change will be reflected on all utility bills for usage after September 1st, 2022, the date when wholesale cost changes became effective. DEMEC absorbed the cost increase in June and July to allow for enough data on the cost to be able to accurately predict the monthly increase.
This power cost increase is primarily due to federal regulations that required the Indian River Power Station in Dagsboro, Delaware, owned by NRG energy, to continue operating for transmission system reliability purposes after it filed to shut down. The regulations impact all electric customers on the Delmarva peninsula and Cecil County and are expected to continue for 4.5 years. The pass-through results in an 8 percent increase in electric bills for the average household and small business accounts in Newark. Commercial accounts in Newark can expect an increase ranging from about 9 to 11 percent depending on demand, load factor, seasonality, and time of use.
Neither DEMEC nor the City of Newark receive any of the power supplied by the Sussex County coal-fired plant; however, they are connected to the same transmission system. Because of this, the decision by PJM Interconnection, the organization that coordinates the movement of electricity across the wholesale power grid in 13 states, to request NRG suspend the retirement of this coal-fired power station is impacting the City’s electric rates, as well as rates across the Delmarva Peninsula.
City staff and Mayor Markham have been working collaboratively with local, state, federal and business leaders to find creative solutions for reducing costs where possible. Until a resolution is identified, the City encourages customers to utilize Efficiency Smart for rebates and an electric usage monitor, insulating windows, purchasing a water heater jacket, utilizing the City’s budget billing option, and servicing their HVAC system. Reducing your household energy consumption by just 2-3 kWh per day will completely offset this rate adjustment.
Questions regarding utility billing or the upcoming rate change can be directed to the Payments and Utility Billing Division at 302.366.7000 or paymentsandutilitybilling@newark.de.us.
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