Law Authorizes State To Conduct Opt-In Affinity Program; State Would Endorse, Market Service From Retail Electric Supplier

Delaware's enacted 2016 bond bill contains a provision allowing the Secretary of State to establish an opt-in retail electric affinity program, under which the State would endorse, and potentially market, service from a chosen supplier (Senate Substitute No. 1 For Senate Bill 160).

Specifically, Section 68 of the bill provides that the Secretary of State shall chair a Committee, which shall include representatives of the Office of Management and Budget, the Department of Natural Resources and Environmental Control, the Office of the Controller General, and the Public Service Commission (PSC), charged with evaluating an opt-in electricity affordability program for residential and small business customers.

"The committee shall evaluate this program based on the potential benefits derived from a combination of a multi-year fixed price per kWh offer, value added products and services to help customers better manage their overall energy bills, and other potential consumer benefits," the law provides.

"If the committee determines that a program will offer these benefits to residential and small business customers, the Secretary, as Chairman, shall have the authority to select and contract with a PSC-certified energy provider with sufficient fiscal and technical experience, to implement the program by October 31, 2015," the law provides.

"Additionally, the Secretary, as chair of the committee, shall direct the Public Service Commission to coordinate the implementation of the program including appropriate customer awareness and marketing activities. Any program shall provide customers who already contract with a third-party supplier or do not wish to participate in this program, the ability to decline participation," the law provides

Direct Energy has already made a proposal to the Committee to supply such a program.

Specifically, according to a presentation made to the Committee, Direct proposed several offers for the residential affordability program

The first would be an exclusive, discounted 24-month fixed energy rate of $0.0859/kWh for Delmarva Power Delaware customers. Direct noted this reflects up to 10% savings versus the Delmarva Price to Compare. There would not be any early termination fee

The second would be a 24-month fixed energy rate of $0.0879/kWh plus a 6-Month Heating & Cooling Repair Essentials Plan for homeowners at no cost. There would not be any early termination fee

The third would be a 24-month fixed energy rate of $0.0919/kWh, plus a free nest thermostat, plus a 6-Month Heating & Cooling Repair Essentials Plan for homeowners at no cost. Direct said that there would not be any early termination fee, but there would be a "device recovery fee" of $200 if the customer leaves prior to the end of the term.

Direct noted that Delmarva’s posted residential Price to Compare of $0.1052/kWh is effective through May 31, 2016. Direct Energy’s calculation of the customer’s "realistic" PTC is $0.09507/kWh.

For small business customers, Direct proposed a 24-month fixed rate of $0.0842/kWh

"With this never before offered innovative bundle of low cost (priced significantly below Delmarva’s current PTC), stable priced electricity, and value added services including the innovative NEST Learning Thermostat to help customers better manage their energy usage, Direct Energy would like to be selected by Delaware to offer this program to Delmarva customers, at our own cost, by stating in our marketing materials that Delaware has 'Endorsed,' 'Certified,' or 'Supports' these offerings," Direct proposed

According to draft minutes of the Committee's meeting, NRG Energy requested that the Committee allow other suppliers to provide proposals prior to any selection by the Secretary.

Per the draft minutes, the Secretary and Senator Colin Bonini agreed that the completion date of October 31, 2015 was not a hard and fast date for Committee action.