Rep. John Kowalko opposes ripoff Demarva Power rate increases

The following press release was issued today by the Delaware House of Representatives:
Utility’s proposed rate increase up for hearing on Thursday

DOVER – Several legislators are encouraging the public to join them in opposing a proposed Delmarva Power utility rate increase that the Public Service Commission will consider on Thursday.

Newark Rep. John Kowalko is asking residents throughout the state to attend the commission’s 1pm Thursday meeting to consider nearly $50 million in rate increases for Delmarva Power customers.

The proposed increases include recovery of depreciation values by Delmarva for obsolete meters that have been replaced with “smart-meters” for Delmarva residential customers.

Rep. Kowalko has noted that the average age of the discarded meters was 22 years with a total life-expectancy of only 30 years. This amounts to more than 73 percent of the life-expectancy being consumed and should be prorated into any calculation, he said.

“I do not agree that costs incurred to purchase, install and operate more efficient upgrades that almost solely benefit the Utility should be borne by the ratepayers,” Rep. Kowalko said. “The practice of charging the ratepayers for business decisions and efficiencies whether benefiting the ratepayers or not is a persistent attitude of Delmarva and I will ask the Public Service Commissioners to reject this unfair burden being forced on the many economically stressed families in Delaware.”

Rep. Kowalko will be testifying before the Public Service Commission, which has the final say in whether Delmarva’s proposed rate increases are approved.

Legislators supporting Rep. Kowalko’s efforts and expected to attend include Reps. John Atkins, Paul Baumbach, Earl Jaques, J.J. Johnson, Ed Osienski and Charles Potter Jr.

Although the public cannot testify during the hearing, Rep. Kowalko said it is important that residents turn out to show their opposition to the proposed increase, noting that a strong public presence would remind PSC commissioners about the residents who would be directly impacted by the hike.

The Public Service Commission meets Thursday at 1pm at 861 Silver Lake Boulevard, Cannon Building, Suite 100 in Dover.
Comments of Green Delaware:

Like most such bodies, the “Delaware Public Service Commission” is essentially controlled by the utilities it is supposed to be regulating. No present member of the Commission is a strong advocate for the public. (However, I don’t consider any of the present members to be hateful, as some have been in the past.)

Far worse is the so-called-but-not-really Delaware Division of Public Advocate. The head of this office is a former Verizon official. Note the total absence of meaningful information on the “Public Advocate” website. The attorney for the so-called “Public Advocate” was extremely insulting to Rep. Kowalko during hearings on this matter.

In this “rate case” Delmarva Power wants, of course, to charge more. The company also wants further deregulation, claiming it suffers from “regulatory lag,” meaning the PSC doesn’t rubber-stamp it’s demands quickly enough. Delmarva Power wants to charge ratepayers for costs more properly born by the company owners (stockholders). Delmarva has ginned up the concept of “reliability plant” (as if all utility infrastructure isn’t about reliability) deserving special treatment. It wants full cost recovery for obsolete equipment no longer in service, such as the discarded meters, and so on.

Filings in this docket are here.

In all this Rep. John Kowalko, Chair of the House Energy Committee, has been the only real representative of the public interest. He’s tried very hard to keep Delmarva Power from ripping off the public. It is very hard to play in the regulatory arena without adequate staff support and money to hire consultants. My sense is that Kowalko so far has not had these resources and this has, unfortunately, limited what he has been able to accomplish–although this is still a lot. Hopefully the House leadership, in the upcoming session, will provide those resources.

Kowalko needs to stay as Chair of the House Energy Committee. He needs full-time staff and a budget. The key point here is that every dollar invested in more effective regulation pays many dollars in savings for the people of Delaware. Of course, this is the same reason the utilities are always trying to weaken regulation and get their people on the Commission and the staff.

Meanwhile, a settlement deal has been cut and the PSC is likely to rubber stamp it. Kowalko has stated his objections here and they are well worth reading.

Also see Kowalko’s op-ed here.

Alan Muller

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