Legislation would be ripoff for utility customers

This appeared in the Wilmington News Journal on May 22, 2017.

(http://www.delawareonline.com/story/opinion/contributors/2017/05/22/legislation-would-ripoff-utility-customers/336308001/)

The piece was slightly edited by the newspaper.  The original as submitted is below:

*************************************

Bad bill serves special interests, rips off utility ratepayers

As Delaware reaches the peak of its political season, there’s no more powerful example of the prevailing special interest chokehold than Senate Bill 80.  This bill would create a new line item charge (“distribution system improvement charge”) on Delmarva Power electric and gas bills, without meaningful opportunities for public review of the additional charges.  Total charges without a “rate case” could amount to $24 million.

SB 80 is strongly opposed by Delaware’s recently-appointed “Public Advocate,” Drew Slater, and has no objective justification.  ( Read the Public Advocates’s letter here.)  A stated reason for SB 80 is improvement in “reliability,” but Delmarva is already well within Delaware’s established electric reliability standards.  A second main excuse is that the bill grants “the same authority that has been previously granted to water utilities.”  This is misleading because water utilities are competing to expand their service areas to profit from sprawl development, and they like to make their existing customers pay for the expansions.  Delmarva’s service areas have been fixed for decades and electricity sales are increasing very little if at all.  The cost of maintaining the existing utility infrastructure is already covered in the existing rate structure.  SB 80 is simply a tool for reaching deeper into customers’ pockets.

We are told SB 80 is supported by the (so-called) Public Service Commission (PSC) staff, the Chair of the PSC, Dallas Winslow, the Delaware State Chamber of Commerce, and the International Brotherhood of Electrical Workers (who work for Delmarva and do what they are told).  It’s prime sponsor is Sen. Harris McDowell, who chairs the Senate Environmental, Natural Resources & Energy  Committee and has long represented the interests of Delmarva Power in the General Assembly.  Other sponsors of this consumer ripoff bill include Rep. Trey Paradee (Chair of the House Energy Committee) Sens. Cathy Cloutier, Gerald Hocker, and Nicole Poore; Reps. Gerald Brady, William Carson, Debra Heffernan, Debbie Hudson, Quinton Johnson, Valerie Longhurst, Steve Smyk, and Dave Wilson.  It is not clear that any of these SB 80 supporters reached out for opposing points of view before signing on.

Delmarva Power is now a part of Chicago-based Exelon Energy, the largest “regulated” utility in the US, with 2016 revenues of over $30 billion and a presence in almost every US state.  Utility mergers are seldom in the public interest for many reasons, a key one being that larger corporations can more easily concentrate political resources in any locality they wish to push around.  Thus, Exelon is reported to have 6 full-time lobbyists pushing SB 80 in the Delaware General Assembly.

It’s in the nature of utilities to amass great economic, political, and psychological power over the communities they “serve.”  They very often suborn the independence of organizations that should be fighting them.  They are usually much stronger than the regulatory commissions charged with controlling them in the public interest, such as the Delaware PSC.  It is much easier for both regulators and legislators to say “yes” than “no” to Exelon.  But legislators are supposed to represent the constituents who elected them, not Exelon.  The bad effects of not standing up for residents are well illustrated by our constantly increasing electric bills at the same time wholesale electricity prices have been trending downwards.

One legislator opposing SB 80 is Rep. John Kowalko of Newark, who used to chair the House Energy Committee but was removed from that position–that removal discrediting the House of Representatives.  Kowalko told Green Delaware:

“I agree 100% with the public advocate, Drew Slater, and am engaged with all of my caucus members to discourage any support for this horrible proposal … I hope that this ill-advised attempt to reach into the ratepayers wallets by Exelon (et-al) is rejected by my colleagues on behalf of their constituency.”

In correspondence with his fellow legislators about this bill, Kowalko said:

“Dear Colleagues,

In lieu of being afforded speaking time during today’s caucus, I would like to invite all of you to meet with me at your leisure to discuss Exelon Corporation’s proposed Distribution System Improvement Charge.

In my time working with the Public Service Commission and on the Energy Committee, I cannot recall a proposal more specifically designed to squeeze profit out of our constituents without providing any improvement in service.

To quote the Division of the Public Advocate’s memo, “Exelon is not requesting this legislation because it needs more money for reliability investment… Rather, it is requesting this legislation because DPL (Delmarva Power & Light) is not currently earning its authorized return on equity.”

We should not be in the business of guaranteeing profit to utility companies,  we should be in the business of protecting our constituency.”

SB 80 is scheduled to be taken up by the Senate Energy committee on May 17th at 1:30.   If approved by the committee (very likely, given the makeup of the committee) it will go to the floor of the Senate for a vote.  If it passes the Senate it will go to a House Energy committee and then, if approved there, to the House.  If the bill passes through both houses it could and should be vetoed by Governor John Carney.  I urge all Delmarva Power customers to contact their Senator and Representative in opposition to SB 80.  Sometimes,when sensing a strong current of public opinion, legislators do respond.  They need to hear from you — today.

Alan Muller
Green Delaware
302.299.6783

Alan Muller directs Green Delaware and has been involved in many utility regulatory matters

Leave a Reply

Your email address will not be published. Required fields are marked *