Delaware Electric Cooperative customers will be paying slightly more for their electricity, starting in March. DEC officials announced plans last week for a 5.5 percent rate increase to begin March, which will add $5.69 to the average customer’s bill. The increase — an unavoidable one because of rising energy costs, according to company officials — will help the co-op cover a $6.4 million budget shortfall.
“We’re really looking at the markets to move up later in the year for us, unfortunately,” said Bill Andrew, the co-op’s president and CEO. “Even if it goes up another 5 percent, we’re still going be the lowest in the region.”
Andrew said he does expect rates to increase by about another 5 percent before the end of 2007, due to rising energy costs. The DEC predicted a 10 percent increase in 2006 as well, but the company’s “member-owners” only realized an 8 percent one. Those customers saved a combined $2 million last year because of the absent 2 percent, Andrew said.
The DEC serves more than 66,000 electricity customers in Kent and Sussex counties through a non-profit model. More than 30,000 of those customers voted earlier this year to remove the company from Delaware Public Service Commission oversight.
The PSC formerly regulated the company by holding hearings to approve or disapprove company policy such as rate changes and infrastructure maintenance. The company is now only regulated by its 11-member board of directors, all of whom are elected to three-year terms by DEC customers.
Some 34,322 voted for member regulation, while only 1,686 members voted against it, the company announced on Aug. 10.
“I think that our membership was well-informed,” Andrew said after the vote. “They thought it was very important to weigh in on this issue.”
Andrew dismissed some earlier concerns that the board would take advantage of its “member-owners” after being removed from governmental oversight, saying that the vote would have no negative impact on company decisions or rate policy.
Company officials instead said that member-regulation would save the co-op time and money. According to Andrew and other company officials, member regulation will save the company about $500,000 annually. About $330,000 is spent each year on a PSC assessment and the remainder is an average spent on commission hearings throughout the year.
DEC officials did not expect to initially benefit from the savings, however, because of money spent on the “Vote Yes” member-regulation campaign earlier this year. The DEC budgeted $528,000 for the campaign.