Read the full stored bill text
Legislation Document
SPONSOR:
Rep. Wilson-Anton
HOUSE OF REPRESENTATIVES
153rd GENERAL ASSEMBLY
HOUSE BILL NO. 481
AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO THE PUBLIC SERVICE COMMISSION.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 1, Title 26 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and by redesignating accordingly:
§ 207. Access to, inspection and examination of utility’s property, records, etc.
(a)
The Commission, by or through its members or duly authorized representatives,
shall
at all times
have
has
access to and the right to inspect and examine any and all books, accounts, records, memoranda, property, plant, facilities and equipment of public utilities. Every public utility
shall
must
furnish to the Commission, within such reasonable time as the Commission may order, any information with respect to its books, accounts, records, memoranda, property, plant, facilities, equipment, service, and operations, which the Commission may require in aid of any inspection, examination, inquiry, investigation, or hearing, or in aid of any determination of the value of its property, or any portion thereof, including copies of accounts, records, books, maps, inventories, appraisals, valuations, contracts, reports of engineers, and other data, records and papers; and
shall
must
grant to all authorized agents of the Commission access to its premises, property, plant, facilities and equipment and its books, accounts, records and memoranda
when requested to.
upon request.
(b) Management audits of public utilities under the jurisdiction of the Commission.
(1) The Commission must provide for management audits of any Commission-regulated electric distribution company. The management audits must include an examination of management effectiveness and operating efficiency. Management audits must be conducted at least once every 5 years unless the Commission finds that a specific management audit is unnecessary. A summary of all management audits prepared under this subsection must be made public and a complete copy of each audit must be provided to Commission staff and the Division of the Public Advocate.
(2) The Commission may require a management audit under this subsection to be performed by 1 or more independent audit or consulting firms (“contracting firm”). In such case, the Commission, after consultation with the public utility and the Division of the Public Advocate, must select the contracting firm and require the public utility to enter into a contract with the contracting firm. The terms of the contract must include payment of the contracting firm by the public utility of all reasonable expenses directly related to the performance of the contract, as well as the contracting firm’s preparation and presentation of reports and testimony in any contested litigation that may be undertaken as a result of the audit. The contract must require the contracting firm to work under the direction of the Commission. Neither the public utility, Commission staff, the Division of the Public Advocate, nor any entity other than the contracting firm may have editorial control over or input into the contracting firm’s findings and recommendations, provided, however, that the public utility must be provided reasonable opportunity to review the findings and recommendations prior to the findings and recommendations becoming final and to comment on any material misstatements the public utility believes exist in the findings and recommendations, and is entitled to request that any trade secret, commercial or financial information, or other privileged or confidential information that would be excluded from disclosure under Delaware law or regulations, including the Delaware Freedom of Information Act, Chapter 100 of Title 29, be redacted from any public version of the findings and recommendations. Costs for management audits are not recoverable in customer rates.
§ 301. Rate schedule and rate classifications.
(e) Notwithstanding any other law, a public utility that provides telecommunications services shall not be subject to mandatory tariff or other filing requirements except with respect to switched access service.
(f) Rate transparency.
(1) Each public utility must prepare, maintain, and file with the Commission for approval, for each customer class it serves, a Rate Summary Table for each rate class showing the total effective rate and itemizing each rate element including each base rate element; each transmission and supply element; and each rider, surcharge, and adjustment mechanism, including, statutory charges, Distribution System Improvement Charges, and any other Commission approved rider or surcharge.
(2) Each component in the Rate Summary Table must be displayed numerically, using the same units in which the customer is billed. Beginning September 1, 2027, Commission regulated electric utilities must bill standard offer service customers transmission charges in the same monthly billing determinants as distribution rates.
(3) The Rate Summary Table must include a schedule that identifies the components of rates that change on a predictable schedule (for example, rates that change annually) and the cadence of such change during the calendar year.
(4) The Commission may reject or require revisions to any Rate Summary Table that it deems incomplete, inaccurate, or inconsistent with approved rates.
(5) The public utility must include the Rate Summary Table in the public utility’s tariff as a separate, clearly labeled section, post the Rate Summary Table for each customer class in an easily accessible location on its website, include the Rate Summary Table for that customer class in its customer bills, and file with the Commission and update in each of the foregoing locations an updated Rate Summary Table at least 30 days prior to the effective date of any change to any component of its rates.
§ 301A. Plain Language Standard.
In all public facing and customer communications and any submissions to the Commission, public utilities, Commission staff, and the Division of the Public Advocate should use clear and plain language to the maximum extent possible. Technical terms, abbreviations, and other technical nomenclature should be avoided wherever possible. Where technical language is necessary for specificity, it should be used only to the minimum degree necessary and must be explained in the simplest form possible.
§ 302. Determination of rate base.
(a)
The Commission may, from time to time, ascertain and determine the rate base of any public utility whenever, in the judgment of the Commission, it is necessary so to do for the purpose of carrying out this chapter, and in making such determination the Commission may have access to and use any books, documents, or records in the possession of any department, board, commission or agency of this State or any political subdivision thereof. In ascertaining and determining the rate base, the Commission may determine every fact, matter, or thing which, in its judgment, does or may have any bearing thereon.
(b) For electric and natural gas distribution companies, the Commission shall use the average year rate base method.
(c)
If a water utility is not, pursuant to § 122(3)c. of Title 16, under review concerning its water system’s ability to provide adequate service to its customers under its present certificates of public convenience and necessity or subject to a review by the Commission of the appropriate rates to be charged by the water utility in light of the quality of service being provided to its customers, the Commission will include in the utility’s rate base, treat as used and useful utility plant, and, accordingly, allow to be fully recovered in the utility’s rates without imputation of revenues, all just and reasonable, and prudent costs which are incurred by the water utility in constructing facilities (including without limitation supply, treatment and transmission facilities) to serve the needs of existing customers or of persons who are reasonably anticipated by the water utility to be its customers within 3 years from the date used by the Commission to recognize rate base in the rate proceeding. The number of customers reasonably anticipated to be added within that 3-year period will consist of customer projections which are relied on by the utility and are generated by professional engineers or planners, governmental or regulatory agencies, officials or authorities, or the water utility itself, and which are not arbitrary and capricious. If the water utility does not, by the end of the 3-year period after the date used by the Commission to recognize rate base in the rate proceeding, reach at least 75% of the total number of customers originally anticipated to be served by the facilities, the Commission may only then require the water utility to impute revenues and then only to the extent of the number of customers it originally anticipated to be served by the facilities but who have not, as of the end of the 3-year period, been added.
§ 304. Rate changes; notice.
(a) Unless the Commission otherwise orders, no public utility
shall
may
make any change in any existing rate except after 60 days notice to the Commission, which notice
shall
must
plainly state the changes proposed to be made in the rates then in force and the time when the changes will go into
effect.
effect, and for changes to base rates, must include the test period and test year applicable for the request.
All proposed changes
shall
must
be shown by filing new schedules or
shall
be plainly indicated upon schedules filed and in force at the time and kept open to public inspection. Public notice of all proposed changes
shall
must
be given in a form and manner set by the Commission. The Commission, for good cause shown, may allow changes in rates without requiring the 60-days’ notice
and/or
or
public notice under such conditions as it may prescribe. All such changes
shall
must
be immediately indicated upon its schedules by such public utility.
(b) In prescribing conditions for rate changes, the Commission is specifically authorized and empowered to conduct proceedings in which it limits the number or type of issues it will consider in determining whether or not to permit or allow such changes. The Commission may adopt or change regulations to govern such limited issue rate proceedings.
(c) As part of any base rate change filing, a public utility may be subject to a regulatory accounting review of transactions included on the public utility’s books and records for ratemaking purposes, including transactions to and from affiliated companies to ensure transactions and other accounting entries are required only for the provision of regulated utility service. The regulatory accounting review may be conducted by staff for the Commission or such expert as selected by staff for the Commission. The regulatory accounting review may begin immediately upon the filing of the notice required by this section. The results of the regulatory accounting review must be provided to all parties in the proceeding. A public utility may not be subject to an accounting review as described in this section if there was a previous regulatory accounting review covering the same test year as proposed in the rate change filing.
§ 306. Effective date of rate change; refund bond.
(a) The Commission, upon the filing of a petition for a proposed change to any rate, may within 60 days after said filing:
(1) Suspend the operation of such rate change for a period not to exceed 7 months after said filing; provided, however, that if the Commission has not reached its decision within said 7 months after filing, the public utility may place
their
50% of the increase in the proposed new rate as compared to the existing
rate into
effect
effect, and 75% after 12 months,
under bond in accordance with subsection (b) of this
section;
section.
(2) Determine that a portion of such change
shall
may
become effective not later than
60
90
days after the filing of the petition on a temporary basis pending the final decision of the Commission.
(b)
Upon
On or after the
termination of the 7 months as set forth in paragraph (a)(1) of this section
50 % of
the proposed rate
change
change, and 75% after 12 months,
shall automatically become effective if the public utility files with the Commission a bond in a reasonable amount approved by the Commission with sureties approved by the Commission, conditioned upon the refund, in a manner to be prescribed by order of the Commission, to the persons entitled thereto of the amount of the excess, if the rate so put into effect is finally determined to be excessive; or there may be substituted for such bond other arrangements satisfactory to the Commission for the protection of the parties interested. In no event
shall
may
a public utility put a rate into effect under bond as authorized in this subsection that would constitute an increase in excess of
15 percent
15%
of the public utility’s gross intrastate operating revenues.
(c) Notwithstanding subsections (a) and (b) of this section,
60
90
days after said filing, a public utility may put a rate into effect under bond as authorized in subsection (b) of this section, provided that the increase does not constitute an increase in excess of
15 percent
15%
of the public utility’s annual gross intrastate operating revenues or $2,500,000 annually, whichever is less. This subsection shall not apply to any proposed rate change sought by a public utility under regulations adopted pursuant to § 304(b) of this title.
§ 316. Cost recovery prohibitions.
(b) A public utility shall not recover the following costs from its customers, whether as part of proposed base rate costs, a rider, or other charges:
(6) For any public utility with more than 25,000 customers, expenses related to distribution rate case proceedings for attorneys’ fees and fees to engage external expert witnesses or consultants incurred after the filing date that exceed the combined amount spent by Commission staff and the Division of the Public Advocate on attorneys’ fees and fees to engage external expert witnesses or consultants.
§ 512. Settlements are to be encouraged.
(d) All orders issued by the Commission must contain adequate support and rationale for any conclusions made by the Commission, including specific facts and factors on which the conclusions are based. This includes an explanation and a discussion of major elements of the settlement when issuing an order accepting or denying a settlement agreement.
Section 2. Amend § 1008, Title 26 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 1008. Duties of electric distribution companies.
(a) Each electric distribution company
shall
must
maintain its facilities and provide products and services which are safe, efficient, sufficient, adequate, and reliable. Each electric distribution company
shall
must
implement procedures to require all electric suppliers to deliver energy to the electric distribution company at locations and in amounts which are adequate to meet each supplier’s obligations to its customers.
A Commission-regulated electric distribution company may not recover in rates annual non-mandatory capital spending in excess of 5% of its rate base approved in its most recent base rate case. For purposes of this section, non-mandatory capital spending means all capital spending by the electric distribution company, except spending:
(1) On its vegetation management program.
(2) On its inspection and maintenance program.
(3) Related to new business and new customer requirements.
(4) On facility relocations.
(5) On required statutory and regulatory requirements.
(6) On emergency failures.
Section 3. This Act is severable. If a provision of this Act or the application of this Act to a person or circumstance is held invalid, the invalidity does not affect the provisions or applications of this Act that can be given effect without the invalid provision or application.
SYNOPSIS
This Act builds on the customer protections created in Senate Bill 60 in 2025, as follows:
1. Increases transparency in rates and communications by public utilities.
2. Requires regular management audits of certain public utilities and regulatory accounting reviews with each rate
case proceeding.
3. Provides greater consistency in the data used by public utilities in rate case proceedings.
4. Limits how much utilities can collect in interim rates before the Commission has ruled on a rate increase
request.
5. Prohibits public utilities from recovering certain expenses from ratepayers.
6. Requires the Commission to provide rationale for its decisions in accepting settlement agreements.
7. Puts limits on Delmarva Power’s infrastructure spending, which is a major driver of rate increases. Delmarva Power is operating its electric distribution system at a level far in excess of reliability standards set by the Commission. In support of its parent company’s strategic goal to increase earnings by increasing rate base, Delmarva Power’s annual capital spending leads to frequent rate increase requests to the Commission. Part of Delmarva Power’s capital spending includes “non-mandatory projects,” which by definition are projects that are not required to maintain system reliability. This bill limits the amount of non-mandatory capital expenses the company may recover from ratepayers in rates and is indexed to the company’s rate base, i.e. the value of all its capital assets. Limiting non-mandatory cost recovery will in no way impact Delmarva Power’s ability to restore service after storms nor impact its vegetation management (tree trimming) program.
This Act also makes technical changes to existing law to conform to the standards of the Delaware Legislative Drafting Manual.