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Utility: PSC Should Extract "Concrete" Commitments From Retail Suppliers Before Embarking on Market Improvements

December 7, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Delaware should obtain, "concrete commitments," from retail electric suppliers that they will actively operate in Delaware if costs related to the numerous retail market enhancements are incurred, Delmarva said in comments on a draft report concerning customer choice enhancements

Click here for prior story on recommendations from the report from the joint PSC/DPA Staff, including recommendations for POR and a state-selected affinity retail supplier

The report had noted that rough costs for certain enhancements totaled $2.3 million. Delmarva has a customer base of about 300,000 customers in Delaware

Noting the cost, Delmarva said, "One risk of incurring the significant costs of the proposed choice related programs and changes exists that is unique to Delaware. Compared to surrounding states, very few choice suppliers actually operate in Delaware."

Delmarva alleged that, "Choice suppliers have consistently informed Delmarva Power that their reluctance to operate in Delaware is due to two main issues: (1) Delaware has a small load (i.e., a small potential market size) compared to other states. The fact that only Delmarva Power customers are able to shop in Delaware exacerbates that problem. (2) Choice suppliers have consistently reported that due to the 'Swiss cheese' shape of Delmarva Power's Delaware service territory, which is interspersed with 9 municipal utilities and the Delaware Electric Cooperative, it is difficult for door to door choice marketers to determine whose territory they are in."

"Those two unique 'Delaware challenges' to choice will not be corrected or lessened by any of the recommendations made by Staff, DPA or Delmarva Power," Delmarva said

"During the two October EAC workshops, RESA and the other choice suppliers were asked whether they would agree to market and operate in Delaware if the portfolio of programs and changes they request are implemented in Delaware. Regrettably, not a single choice supplier, or RESA itself, was willing to commit to coming to Delaware, even if Delaware customers incur the costs of implementing the many programs and changes that RESA and the choice suppliers are demanding. Accordingly, there is a significant risk that Delmarva Power's customers could be burdened with millions of dollars of additional choice-related costs out of which no benefits will materialize," Delmarva said, in recommending that suppliers be required to make commitments to actively market in Delaware prior to any market changes being undertaken [emphasis by Delmarva]

Delmarva also said that the goal of cost recovery for retail market improvements should be to collect the proposed choice-related costs through choice rates, "rather than through customers who have decided not to participate in the choice program."

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