Summary#
HB 481, An Act To Amend Title 26 Of The Delaware Code Relating To The Public Service Commission, would amend Delaware law governing the Public Service Commission and public utilities. Its stated goal is to strengthen rate transparency and customer protections; that is a goal, not a guaranteed result. The bill is listed as in progress, so it is not law.
- It would require management audits of Commission-regulated electric distribution companies at least once every five years, unless the Commission finds a particular audit unnecessary. Audit summaries would be public; full audits would go to Commission staff and the Division of the Public Advocate.
- It would require public utilities to prepare rate summaries for each customer class, show the rate components in the same units customers are billed in, and put the summaries in tariffs, on websites, and on bills. The Commission could reject or require changes to a summary.
- It would require rate-change filings to include the test period and test year for proposed base-rate changes. A utility’s accounting records, including transactions with affiliated companies, may also be reviewed in a base-rate proceeding.
- It would limit how much of a proposed rate increase utilities could collect before a final Commission decision, subject to a bond and stated caps. It would also restrict recovery from customers of certain rate-case expenses and non-mandatory electric-system capital spending.
- It would require Commission orders accepting or rejecting settlements to explain their reasoning, including the major parts of a settlement.
What it means for you#
- Utility customers: You would get rate summaries in your bill, on the utility’s website, and in its tariff. For Commission-regulated electric utilities, starting September 1, 2027, transmission charges for standard-offer customers would use the same monthly billing determinants as distribution rates.
- Customers affected by a rate increase: A utility could collect part of a proposed increase before the Commission’s final decision, under bond. The bill sets out partial increases after specified periods and a limit for some increases put into effect after 90 days. Any excess could have to be refunded if the final rate is lower.
- Customers of larger utilities: A utility with more than 25,000 customers could not pass on certain post-filing rate-case legal and expert costs above the combined amount spent by Commission staff and the Public Advocate on those costs.
- Customers of electric distribution companies: The bill would limit recovery in rates of annual non-mandatory capital spending to 5% of the rate base approved in the utility’s last base-rate case. The limit excludes spending on vegetation management, inspection and maintenance, new customers, facility relocations, legal requirements, and emergency failures. It limits rate recovery, not the spending itself.
- Public utilities: Utilities would have to provide required records and access for Commission inspections. If the Commission hires an independent firm for a management audit, the utility would have to pay its reasonable direct costs, but could not recover audit costs in customer rates.
- Commission, staff and Public Advocate: They would have new audit, review, rate-summary, and explanation duties or powers. Public-facing communications and submissions should use plain language; when technical language is necessary, the bill says it must be explained simply.
- Telecommunications utilities: The supplied text says they are exempt from mandatory tariff or other filing requirements except for switched access service. I cannot verify whether this is a change or existing law.
Money#
No cost estimate is available in the supplied material.
- A utility would pay an independent audit firm’s reasonable direct expenses if the Commission requires an outside audit; those costs could not be recovered in customer rates.
- The bill would limit recovery of some rate-case expenses and non-mandatory electric capital spending from customers. It does not estimate the effect on bills or utility finances.
- The bill sets no overall public spending amount or staffing budget.
What is unclear#
- The supplied bill text does not include the parent Act, and its strikeout and insertion marks are not clear. I cannot verify which reproduced provisions are current law and which are new.
- The bill does not set out detailed audit standards, or criteria for when the Commission may decide an audit is unnecessary.
- It does not state when the Act would take effect.
- The Commission’s rules for calculating partial interim rate increases and refunds would affect how the limits work in practice.
- The bill does not estimate whether limits on rate recovery would change utility investment, service, or customer bills.
Case for#
- Requiring recurring audits could give the Commission a regular way to examine electric distributors’ management effectiveness and operating efficiency.
- Rate summaries could make it easier for customers to see the parts that make up their bills and when some rates are scheduled to change.
- Limits on interim rate increases and certain recoverable costs could reduce what customers pay before a rate case is decided or for specified utility expenses.
- Requiring explanations for settlement decisions could make the Commission’s reasoning clearer to the public.
Case against#
- Audits, rate summaries, and accounting reviews would add work and expense for utilities and the Commission; the bill provides no estimate of those costs.
- The audit requirement has an exception, but the bill does not state the criteria the Commission must use to decide an audit is unnecessary.
- Limits on recovering certain spending and expenses could make cost recovery less predictable for utilities. The bill does not assess how that might affect investment or service.
- The utility would pay an outside auditor, while the Commission directs the work. The bill bars the utility and others from controlling findings, but it does not explain how disputes about the auditor’s work would be handled.