Delmarva to Implement Dynamic Pricing for All SOS Customers by 2014

The Delaware PSC has approved a settlement which contemplates that Delmarva Power will introduce dynamic pricing for all SOS residential customers by June 2013 (Docket 09-311).

Under the settlement, the SOS dynamic rate (Rider DP) will be a critical peak rebate.

Starting in June 2012, about 7,000 Delmarva residential SOS customers will be moved onto the critical peak rebate rate. A customer may opt out of Rider DP at any time; however, there is little incentive to do so as the Rider DP SOS price is the same as the otherwise applicable price, and Rider DP customers are not penalized if they do not reduce their load during a peak event.

SOS customers that do reduce their load during a peak event, versus a baseline, will be paid $1.25 per kW, with such amount updated annually to reflect the most recently available PJM capacity and energy market prices.

The remaining residential SOS customers are to be moved to the critical peak rebate in June 2013; however, the settlement calls for an evaluation period after the summer of 2012, which could lead to program design changes prior to June 2013.

Notably, this evaluation period will consider whether the critical peak rebate rate program should be opt-out as contemplated or opt-in.

An estimated 152 small and 87 medium non-residential customers will be placed under Rider DP in June 2013. In June 2014, the remaining small and medium Delmarva non-residential customers will be defaulted to Rider DP.

For the initial years, under-recovered costs resulting from payment of the critical peak rebate and reduced load, net of revenues from the PJM markets for such load reduction, will be carried forward as a regulatory asset to be offset by future PJM revenues.