Delmarva Power customers in Delaware pay 19% extra on electric bills for renewable energy

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Delmarva Power customers in Delaware have been paying 19% more on their electric bills due to legislation that was passed in 2010 that mandated utility companies purchase a greater percentage of their power from renewable sources such as wind and solar.

Over the course of the span of the utility contracts since the law was passed, Delawareans have paid well over a billion dollars in extra costs due to the mandate, according to State Representative Rich Collins who helped bring the issue to light and explained how the extra cost actually violates the law that brought it to fruition.

In an interview with WGMD’s Duke Brooks, Rep. Rich Collins explains…

“If you’re on Delmarva Power folks, if you have a Delmarva Power bill, this affects you,” Rep. Collins said. “It was finally revealed after a demand from the Public Service Commission (PSC) that we are paying over 19% extra on our bills when the law limits it to 3%, and we are being forced to pay almost 20%.”

The Renewable Portfolio Standard (RPS), a regulation that requires the increased production of energy from renewable energy sources, was amended in 2010 when state lawmakers voted in favor of legislation that mandated utility companies, such as Delmarva Power, purchase a greater percentage of their power from renewable sources such as wind and solar.

Knowing that the law would make electricity bills more expensive for their constituents, lawmakers at the time put a cap on the amount to 3%. If the amount exceeded a freeze on buying more renewable power would go in place for one year, according to the Caesar Rodney Institute’s Center for Energy & Environment who helped bring the issue to the forefront.

The law started a long battle for transparency to allow electric customers to see how much they were paying. This sparked conflict between the Delaware Office of the Public Advocate and Caesar Rodney Institute who were called on transparency from DNREC’s Energy & Climate Division.

“The overriding goal of the Public Advocate is to protect the electric consumer, while the primary goal of the Energy & Climate Division is to promote the use of renewable sources such as wind and solar power,” David Stevenson, Director of the Caesar Rodney Institute’s Center for Energy & Environment, explained in a newly released report. “Ultimately, the freeze decision rested with the PSC.

Pressured by DNREC’s Energy & Climate Division and new legislation, such as the Fuel Cell Act (Bloom Energy), Delmarva Power signed on to expensive fifteen and twenty year leases between 2010 and 2011 to comply with the law, according to Stevenson’s report. Contracts were signed for Bloom fuel cells, the Dover Sun Park, three Pennsylvania wind projects, and the first Solar Renewable Energy Credit auction.

Meanwhile, Delaware Electric Cooperative and municipal power companies across the state who aren’t regulated by the PSC are able to make their own decisions on how they meet the standards without exceeding the 3% cost cap. Delmarva Power on the other hand is regulated by the PSC.

WGMD News reached out to Delmarva Power who said the 19% extra on utility bills is a result of the company complying with state law and that they do not profit from it.

“We fully comply with the existing Renewable Portfolio Standard regulations, which dictate the renewable energy we must buy and when we must buy it,” a Delmarva Power spokesman said. “This includes a ‘mix’ of energy from solar and wind, as well as fuel cell resources produced by Bloom Energy’s Qualified Fuel Cell Provider project in Delaware. The cost of procuring this energy is a pass-through, meaning Delmarva Power receives no profit. “

All costs incurred by Delmarva Power related to meeting the RPS and the Qualified Fuel Cell Provider project are subject to review and approval by the PSC. The responsibility for cost cap calculations, per State law, falls with DNREC and the PSC.

“We have historically provided DNREC with our cost data, as required, and recently provided the PSC with that data as well,” the Delaware Power spokesman continued. “Delmarva Power will continue to comply with any decisions the PSC makes based on the cost cap calculations, including any forthcoming order which might require a freeze of certain renewable energy purchases.”

For years the PSC let DNREC determine if the cost cap was met, according to Stevenson’s report with the Caesar Rodney Institute.

“DNREC stalled for five years in finalizing a cost cap calculation regulation, and then manipulated the calculations to be much lower than it actually was. Successful lawsuits moved the responsibility for the cost cap calculation regulation to the PSC,” Stevenson wrote. “The lawsuits and re-writing the regulation ate up more time, and the first honest calculation was just completed over DNREC resistance in refusing to send required information to the PSC.”

This year the legislature is expected to consider killing the cost cap, and increasing the renewable mandate from 25-percent by 2025 to 40-percent by 2035.