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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 Company (now doing business as Delmarva Power) 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 was 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 Five marketers were certified to participate in the pilot, but by November 2000 all but one had withdrawn.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 December 2008, the PSC had not received any indication that Delmarva Power (formerly known as Connectiv) would be proposing a retail choice program for residential and small commercial customers. However, Chesapeake Utilities Corporation (the other local distribution company in the State) did propose some changes to its transportation program as part of its 2007 base rate proceeding, PSC Docket No. 07-186, with a goal of exiting the merchant function over several phases. The first phase proposed in this docket would have lowered usage levels for small commercial customers, allowing them to be eligible for transportation and service by third-party suppliers. Upon review, the PSC determined that it was unable to evaluate the effect of phase one without more detail and kept usage levels unchanged. However, firm customers with multiple meters, such as an apartment complex with a single owner, will be able to aggregate the usage for each meter to meet the usage threshold, as long as the meters are contiguous in a specific geographic location.  
EIA State Data: In 2007, Delaware had 145,010 residential and 12,576 commercial customers. They consumed approximately 10 and 9 billion cubic feet of natural gas, respectively. The average prices residential and commercial customers paid for natural gas from local distribution companies were $16.21 and $14.48 per thousand cubic feet, respectively.
Legislative and Regulatory Actions on Retail Unbundling

Summary: In July 2001, the Delaware Public Service Commission (PSC) approved Connectiv Power Delivery's request to discontinue its 2-year pilot choice program for residential and small commercial customers as of November 1, 2001. The program had started on November 1, 1999, with customer enrollment held from July 1 through October 8, 1999, and marketer certification during May and June 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. Five marketers had been certified as gas suppliers for the pilot.
Regulatory and Legislative Actions

Regulatory Action 05/08 Settlement Agreement Proposed Regarding Chesapeake Utilities' Base Rate Application, PSC Docket No. 07-186. Chesapeake agreed to keep current usage thresholds for transportation service by commercial and industrial customers at 3,000 Mcf (thousand cubic feet) per year rather than eliminating usage requirements as originally proposed. Parties agreed that firm customers with multiple contiguous meters in a specific geographic location with a common owner could aggregate the usage for each meter serving the customer. Chesapeake remains committed to expanding its transportation program in the future.
  07/07 Chesapeake Utilities Applies for Rate Increase and New Service Offerings, PSC Docket No. 07-186. Chesapeake filed a base rate application that includes extensive proposed changes to its existing rate design and a depreciation study. It also includes a proposal to lower usage levels for small commercial customers, allowing them to be eligible for transportation and service by third-party suppliers. The company would eventually like to move toward exiting the merchant function.
  07/01 Connectiv Settlement Agreement Approved, PSC Docket No. 00-315, Order 5756. The settlement 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 its gas cost recovery 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.
  01/01 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).
  06/00 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.
  04/99 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.