Delaware Electric Co-op plans rate restructuring

Delaware Electric Cooperative has announced a comprehensive rate restructuring plan. According to DEC, the overwhelming majority of members will see a rate decrease if the plan is approved.

The DEC board of directors will vote on the proposal at a special virtual hearing set for 5 p.m., Wednesday, March 20. If approved, rate changes will take effect, Monday, April 1.

“This is the first extensive rate restructuring process the co-op has undertaken in decades,” DEC said in its Delaware Living newsletter. “The changes proposed by DEC leaders are meant to ensure the cooperative is covering the fixed costs associated with providing basic electric service to members and to ensure our various rate classes are not subsidizing others. In other words, we want to make sure rates are fair to all members. The rate decrease for most members comes as other electric companies serving Delaware have announced significant rate increases.”

On average, DEC members pay $500 less per year in energy costs than those served by the other Delaware utilities. 

“Our rates are some of the lowest in the region,” DEC said in its newsletter. “As a not-for-profit utility, our goal is to provide you with affordable and reliable power.”

Under the plan, a majority of residential members will see a 3% to 5% decrease in their monthly electric bill, resulting in savings of $60 to $95 per year. The average member on DEC’s residential rate using 1,000 kWh will see a little more than a 3% decrease in their monthly bill. Members served by DEC’s residential space heating rate who use 1,000 kWh per month will see a 5% decrease as DEC transitions everyone in the space heating rate class to the general residential rate. The space heating rate class is being eliminated. 

The delivery portion of an electric bill that covers the cost to distribute energy and reflects DEC’s fixed costs to provide basic electrical service will increase. Delivery charges per kWh that account for the cost to distribute power to member homes will decrease slightly, and the service charge (formerly known as the customer charge) will increase. 

Overall delivery charges are being adjusted because of the dramatic rise in the cost of materials used to maintain DEC’s system over the past few years. The service charge will increase from $16 to $28 per month to accurately reflect the true fixed cost to provide basic electrical service to each member.

Members served under the general service rate will see an increase in monthly energy costs. The average member on the general service rate using 1,000 kWh per month would see a 6% increase in their monthly bill. The supply charges for this rate are currently among the lowest of all DEC members. Supply charges help DEC pay for the general cost of generating or purchasing electricity for homes and businesses. To ensure members in other rate classes aren’t paying for the infrastructure used to power general service members, supply charges for this rate are being raised to levels consistent with other DEC rates. While this is fair to other members, this rate class is one of the few that will pay more under the restructured rates. 

Nonresidential rate classes are also being restructured. Rate classification is listed on monthly electric bills. While these changes impact far fewer members, some rate classes will see a drop in energy costs, while others will see an increase in their monthly energy costs. 

DEC is also notifying members of several changes that will impact those with net-meters. Net-metered billing cycles will change beginning in March. Adjusting the billing cycle will allow members with solar power systems to better utilize their banked excess kWh credits, which can now only be accumulated by members during a one-year annualized billing period as a result of legislation passed in 2022. The legislation requires all electric utilities in Delaware to eliminate banked kilowatt hours on an annual basis. Moving the billing cycles for net-metered accounts to the end of the month will allow members to apply the most possible banked kilowatt hours to their bills, especially when those banks are zeroed out at the end of the March billing cycle. March is typically when net-metered members have the lowest amount of kilowatt hours in their banks, with many being empty already. This is due to the fact that solar generation is lowest during the winter months, but electric consumption is relatively high due to cold weather.

DEC will also be revamping its monthly bills starting in May. Members with renewable energy systems will be able to see how much energy their home used from the electric grid, as well as the energy their solar arrays sent back to the grid. 

For more information or to make a comment, email rates@delaware.coop or call 855-332-9090.