Rate Case Roundup: Delaware

In an electric rate docket resolved by settlement, the Delaware Public Service Commission authorized Delmarva Power & Light Company (DPL) to increase its rates by $31.5 million, predicated in part on a ROE of 9.70%. The utility's original rate filing reflected a proposal for almost twice the relief ultimately allowed, or $62.766 million. The company had advocated for a 10.60% ROE. 

In support of its rate request, DPL attested that it had been striving to improve system reliability by investing in plant upgrades, including installation of advanced metering infrastructure (AMI). To that end, the company asked that its revenue requirement be augmented to take into account those system improvements. The utility noted that its AMI projects had facilitated the introduction of various load control and dynamic pricing measures. 

In the end, the utility and the other negotiating parties crafted an agreement that recognizes those load control and dynamic pricing investments. More particularly, the settlement provides for DPL's $20.7 million regulatory asset for its direct load control program to be incorporated into the overall base rate revenue increase granted. The asset is to be amortized over a 10-year period. Similarly, the company's $7.84 million regulatory asset for its dynamic pricing program was included in the base rate increase, again subject to the same 10-year period of amortization. 

In looking at the joint stipulation, the commission found that there was enough record evidence to warrant adoption of the settlement, even though it had been presented as a "black box" agreement. According to the commission, the fact that the final increase was only about half of the company's initial request was telling in and of itself that there had been robust discussion and compromise. 

The commission conceded that it probably would not have decided each issue in the same manner as did the parties had the proceeding been fully litigated. But, it said, on balance, the results reached likely were as just and fair as the commission's own conclusions would have been. Re Delmarva Power & Light Co., PSC Docket No. 16-0649, May 23, 2017 (Del.P.S.C.).