DOVER – State officials are encouraging medium- and large-sized businesses that get their electricity from Delmarva Power to inquire whether they are eligible to lower their billing rates.
The Delaware Division of the Public Advocate, which represents customers in utility rate cases, and the Delaware Public Service Commission (PSC), which rules on such cases, issued a March 5 press release that stressed the onus of such checks were on customers.
“Delmarva Power’s commercial customers who qualify for a lower rate are entitled to that rate. Until there is a long-term solution in place, it is extremely important that customers contact Delmarva Power to find out if they are eligible,” Public Advocate Drew Slater said in a statement.
At issue is a Delmarva Power energy tariff regulation that moves small companies up to a medium general service rate classification if they use 3,500 kilowatt hours or more for two consecutive months. With that raise comes an additional “demand charge,” which can total several hundred dollars a month for customers based on peak demand.
That regulation also allows for a customer that goes 12 consecutive months without exceeding the 3,500-kilowatt-hours threshold to request to be lowered in its classification though. Without a formal request by a customer, however, they will continue to be billed at the higher rate.
Jacob Snedden, a Delmarva Power spokesman, emphasized that the company has enforced the tariff regulations that were reviewed and approved by the PSC. He added that the reclassification clause for excess energy demands is “a common utility structure for many industries.”
The rate classification issue was first broached in a PSC case filed by a Sussex County early learning center dealing with solar arrays last year. The issue applies to all businesses who buy energy from Delmarva, however, and not just those who own solar arrays.
State officials said that news coverage of that PSC case led to additional customer complaints in recent months.
Although the state officials claimed in their release that an “investigation” by their offices discovered the roughly 5,200 other businesses that may be impacted by the regulation, Sneeden told Delaware Business Times that the company disclosed those customers to the state in a briefing this week.
Snedden explained that the utility company is preparing a regulatory rate review request to be submitted to the PSC in March – its first rate increase request since 2017. As part of the preparation for that review, Delmarva identified the 5,000 medium-sized and 200 large-sized businesses that would qualify for reclassification to a lower service level.
Snedden said that Delmarva is working through the logistics of how to reclassify such a large number of customers in the short term, including whether meters would need to be replaced or whether a software update could accomplish the task, and hopes to present its plan on how to proceed in April. Currently, electric meters would have to be manually changed by a technician to reclassify, Snedden said.
Delmarva hopes to reclassify those eligible for a lower level by October 2020. In an analysis of its customer base, Snedden said Delmarva identified about 5,000 customers out of its 14,000 medium-level customers who would be eligible to move to small-level, and about 200 large-level that could move to medium-level.
“We understand from our analysis that our commercial customers rarely take advantage of the option to transfer service classifications and there is more we can do to help them understand their options,” he said.
He noted that Delmarva is exploring long-term solutions to the regulatory framework that would aid customer service. The utility also plans to institute a new practice of annually reviewing customer accounts in the medium and large service levels to identify those eligible for lower levels and proactively advising them of the option.
Snedden stopped short of saying the company would automatically reclassify eligible customers, however, saying, “Our customers best understand their expected energy usage and have the responsibility to make the choice of which service classification option will best fit their future energy needs.”
To check your energy account with Delmarva, call 1-800-375-7117.
By Jacob Owens
