Retail Unbundling - Delaware

Status: The state's one pilot choice program was discontinued as of October 31, 2001.

Overview: In November 2000, Connectiv Power Delivery (formerly Delmarva Power and Light Company) withdrew its earlier request to extend and revise its customer choice pilot program beyond October 31, 2001. The program had been in existence since 1999, but the surge in natural gas prices in 2000 meant that marketer prices were higher than gas costs under the utility's sales service, which reduced program participation. The company had 609 cancellations from October 1999 to April 2000. By the start of the 2000-2001 heating season, only 432 customers were enrolled. The company's gas cost rate is designed to provide an annual levelized rate to moderate gas price changes, while marketers rely on more market responsive pricing. Five marketers were certified to participate in the pilot, but by November 2000 all but one had withdrawn.

The Delaware Public Service Commission (PSC) had directed Connectiv to consider establishing a new program, but after a series of quarterly meetings the company decided that another pilot was not advisable at the time. As of January 2003, the PSC has not received any indication that either Connectiv or Chesapeake Utilities (the other LDC in the state) will be proposing a retail choice program for residential and small commercial customers in Delaware.

EIA State Data: In 2001, Delaware had 122,829 residential and 11,075 commercial natural gas customers. They consumed 9 and 6 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from local distribution companies by residential and commercial customers were $9.06 and $10.27 per thousand cubic feet, respectively. The average city gate price in Delaware was $5.16 per thousand cubic feet.

Delaware: Legislative and Regulatory Actions on Retail Unbundling

Summary: In November 2000, Connectiv Power withdrew its earlier request to extend and revise its customer choice pilot program beyond October 31, 2001. The program has been in existence since 1999. In April 1999, the Delaware Public Service Commission (PSC) approved a 2-year pilot choice program for residential and small commercial customers of Connectiv Power Delivery starting November 1, 1999, with customer enrollment from July 1 through September 15 and marketer certification during May and June 1999. The enrollment deadline was subsequently extended to October 8, 1999. Up to 15,000 residential and 1,500 small commercial customers (about 15 percent of its small retail customers) could enroll in the program on a first-come, first-served basis. As of August 1999, five marketers had been certified as gas suppliers for the pilot.

Regulatory and Legislative Actions
Regulatory Action 7/01 Connectiv Settlement Agreement Approved, PSC Docket No. 00-315, Order 5756. Includes four main provisions: (1) ends pilot program, (2) establishes process for filing a new application for a pilot, (3) sets new application requirements, which include changes in the billing system, third-party supplier rules, ongoing enrollment provisions, and possible changes to GCR mechanism (such as monthly or quarterly adjustments), and (4) requires "interim reports" on progress updates on 9-1-01, 12-01-01, and 3-01-02.
1/01 Connectiv Decides Not to Extend Pilot Program After October 31, 2001. Company withdrew its earlier testimony and request to extend pilot program. The examiner suspended the hearing schedule. Parties will work on reaching a settlement agreement. Issues are still outstanding in a related docket (No. 00-108) regarding conversion of the company's billing system (filed 2/00).
6/00 Request by Connectiv to Extend and Revise Customer Choice Pilot Program, PSC Docket No. 00-315. Request suspended pending review. At issue are concerns about billing and metering services.
4/99 PSC Approval of Customer Choice Pilot Program, PSC Docket No. 98-524, Order No. 5070, Connectiv Delivery Tariffs effective 5/1/99. The PSC approved a 2-year pilot choice program starting 11/1/99 for 15 percent of Connectiv's small retail customers. Delmarva Power & Light (now doing business as Connectiv Power Delivery) had first filed its proposal on December 1, 1998, but the application was suspended (Order 4979) until completion of evidentiary hearings. Five parties (Delaware Association of Alternative Energy Providers, UGI Energy Services, Connectiv Energy, Chesapeake Utilities Corp. and the Division of the Public Advocate) intervened in the proceedings. A negotiated settlement was reached in March and is reflected in the approved tariff. Customer enrollment is to occur from July through September 15 and marketer certification during May and June 1999. Connectiv Power Delivery will continue to provide metering and billing services and will be the supplier of last resort. Marketers are subject to a PSC application fee, LDC bonding requirements, and a PSC assessment if gross revenues exceed $10,000. The tariff specifies a marketer code of conduct that includes bill dispute procedures, contract specifications, and customer protection measures.

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File last modified: 01/31/2003