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FOR IMMEDIATE RELEASE
September 7, 2022 |
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Federal Agency Agrees With OPC That Delmarva Power Has Not Shown Lawfulness of Proposed Transmission Rate Increase of $13.9 Million
BALTIMORE – The Federal Energy Regulatory Commission last week agreed with the Office of People’s Counsel that Maryland utility Delmarva Power & Light failed to show that its proposed rate increase of approximately $13.9 million for transmission facilities is just and reasonable. FERC set for public hearing the utility’s proposal to determine if it complies with the Federal Power Act.
The ruling came after OPC protested Delmarva Power’s proposal, filed in June, to change the “depreciation” rates for its transmission facilities serving over a half million electric power customers in Maryland and Delaware. Depreciation rates are an accounting mechanism related to the time period that assets are useful for serving customers; they are the rates at which a utility recovers its investments from customers. Depreciation schedules are a major determinant of how much customers pay for their utility service.
In its filing, Delmarva presented a study showing that it needed to increase the amount it spends on depreciation by $13.9 million annually. In its protest, OPC—joined by the Delaware consumer advocate, as well as the Maryland Public Service Commission—disagreed with Delmarva’s study and presented a separate technical analysis showing that Delmarva’s proposed increase in its annual depreciation expense was overstated by at least $5.9 million.
FERC’s order last week concluded that the utility had failed to demonstrate that its proposed increase met the “just and reasonable” legal standard and that the resulting rates “may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful.” It found that there was a factual disagreement that could not be resolved without further proceedings.
“Delmarva failed to show that its proposed rate increase is consistent with laws protecting customers from paying unreasonable rates,” said Maryland People’s Counsel David S. Lapp. “We will continue our efforts in this case to ensure Maryland customers are protected from paying any unreasonable costs related to Delmarva’s transmission service.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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