Feb 8 - Knight Ridder/Tribune Business News - Delaware State News, Dover

 

The impending jump in electric rates has sparked Lt. Gov. John C. Carney Jr. to ask the state Public Service Commission to consider phasing in Delmarva Power's proposed 59-percent rate hike over several years.

In a two-page letter Tuesday, Lt. Gov. Carney also asked the commission to examine deregulation and determine why no competition ever emerged.

While Lt. Gov. Carney said the proposed increases weren't a surprise, he was "shocked by the magnitude of it."

"The PSC is empanelled to look at the rate increase request," he said. "I'm asking them to consider the view of the consumer.

"With the increases in heating, gasoline and other fuel costs at the same time, this could be a double or triple whammy."

Low-income families, Lt. Gov. Carney said, would not be able to absorb the rising costs if they are implemented all at once.

"We didn't get in this situation overnight, so we shouldn't try to get out of it overnight," he said.

"If we phase in the increase over several years, it enables families to better adjust to the increases over time."

Public Service Commission chairwoman Arnetta McRae said the PSC would take the lieutenant governor's letter into consideration.

She said the commission would further investigate what can be done to make the high increase easier for consumers to handle.

"We will work with all the parties to pursue all reasonable avenues," Ms. McRae said.

The commission, she said, would aggressively reach out to customers about energy conservation to help them reduce costs.

Delmarva Power spokesman Timothy Brown said Lt. Gov. Carney's letter gave the electric supplier some food for thought.

"We would say that's an option that has to be explored, but has to be explored carefully with consideration of the consequences, including increased costs," Mr. Brown said.

As part of his request, Lt. Gov. Carney also asked the commission to review deregulation to determine why the expected competition never materialized.

According to the Delaware Municipal Electric Corp., which supplies electricity to seven towns in the state, only eight of Delmarva Power's 292,000 customers have sought a third-party supplier through the competitive process.

All eight are industrial companies, said Patrick McCullar, the company's president.

"In Delaware, we have not seen competition as expected," Lt. Gov. Carney said.

"Given that reality, the logical question is, 'What should we do going forward?' "

The anticipated effect of deregulation, he said, was that competition would spur lower electric rates.

But with a dearth of competition, electric providers such as Delmarva Power and Delaware Electric Cooperative, which serves 64,000 Kent and Sussex county residences, are the only game in town.

"We need to evaluate what happened and why and where do we go from here," Lt. Gov. Carney said.

Mr. Brown agreed that deregulation did not produce the desired result.

"Competition certainly has the potential to reduce rates for some customers and it also has the potential to offer new products and services, especially to business customers," he said.

 

By Kate House-Layton and Drew Volturo