Delmarva Power & Light Co. filed rate hike requests totaling almost $65 million in Delaware and Maryland, saying its revenues have not kept pace with growing capital spending.
Delmarva asked for a $42 million annual increase in its electric distribution rates in Delaware, where it serves 300,000 customers, and $22.7 million in Maryland, where it serves 200,000.
Delaware Filing
Delmarva’s March 22 filing with the Delaware Public Service Commission said its current return on equity is only 6.6%, below the 9.75% ROE approved by the commission in its 2011 rate case, which boosted revenues by $22 million annually. The company is seeking a 10.25% ROE and a 7.38% increase in total revenue.
The company said the biggest driver in its rising costs is its capital spending. It expects to spend about $397 million on capital projects in 2013 through 2017, much of it for reliability upgrades. “Delmarva is not realizing sufficient growth in the number of customers and load served to offset this pace of investment,” the company said. It requested new rates take effect May 21. DE PSC Docket No. 13-115
Maryland Filing
In its March 29 filing with the Maryland Public Service Commission, the company requested a 10.25% ROE, saying it was currently earning only 7%.
The company said it spent almost $54 million on reliability improvements in 2012, with plans for an additional $115 million in 2013 and 2014. The spending helped reduced the frequency of outages by 9% and their duration by 17% since 2010, the company said.
The requested base rate increase would boost the monthly bill for a residential customer using 1,000 kWh by $7.74.
Resiliency Surcharge
In addition, Delmarva asked Maryland regulators for a three-year “grid resiliency” surcharge that would add another $1.06 to the typical customer’s bill in 2014 and allow the company to accelerate its infrastructure spending. The proposed surcharge would provide the company incentives for reaching reliability benchmarks and penalties if it failed to do so, as recommended by a September 2012 task force report prepared for Gov. Martin O’Malley. MD PSC Case # 9317
Delmarva is a subsidiary of Pepco Holdings Inc., which is also seeking a $60 million rate increase in Maryland and a $52.1 million boost in Washington, D.C. and. (See story “Pepco Goes Back to the Well“.)
