Understanding the Upcoming City of Milford Power Cost Adjustment

Terry RogersGovernment, Headlines, Milford Headline Story

The City of Milford provided a chart to explain changes in electric rates

The City of Milford, a community electric utility powered by the Delaware Municipal Electric Corporation (DEMEC), will be increasing the current Power Cost Adjustment (PCA) by $0.00804 per kilowatt-hour (kWh) for a total of $0.012 beginning in October.  Customers will see this increase on their November City of Milford utility bills.

This power cost increase is primarily due to regulations that required the Indian River Power Station in Dagsboro, DE to continue operating for reliability purposes after it filed to shut down.  The regulations impact all electric customers in Delaware and are expected to continue for 4.5 years.  The passthrough results in a 6.2 percent increase in electric bills for the average household and small business accounts in Milford. Commercial accounts in Milford can expect an increase ranging from about 5.9 to 7.9 percent depending on demand, load factor, seasonality, and time of use.

Even with this rate increase, customers are paying less than they were five years ago (see attached chart).  Additionally, the City’s overall electric rate continues to be the third lowest rate in the state of Delaware, trailing only the City of Lewes and the City of New Castle.

“DEMEC exercises every strategy at its disposal to reduce and stabilize power costs, improve power supply diversity, and mitigate the impact of ancillary costs in power markets on behalf of its members, including the City of Milford,” Finance Director Lou Vitola said, “but reliability requirements driven by grid operator PJM and supported by Federal Energy Regulatory Commission (FERC) regulations carry with them unforeseen cost impacts that are not associated with day-to-day power delivery, but which nonetheless flow to end users of electricity.”

Neither DEMEC nor the City of Milford receive any power supplied by the Dagsboro, DE coal-fired plant; however, the decision by PJM Interconnection, which coordinates the movement of electricity across the wholesale power grid in 13 states, to suspend the retirement of this coal-fired power station is impacting the City’s electric rates, as well as rates across the Delmarva Peninsula.  Since 2008, DEMEC has worked with Milford and its member communities to diversify its power supply portfolio with a commitment to carbon reduction.

According to DEMEC’s 2021 Annual Report, “Currently, 90 percent of DEMEC’s power supply comes from low to no carbon emission resources. That means electric customers in our member communities are already benefiting from our environmentally focused shift in energy resources, like solar and wind. Since 2005, DEMEC has reduced its carbon footprint by 50 percent through our commitment to sustainable energy sources and energy reduction programs.”

To help offset this increase, the City encourages customers to utilize Efficiency Smart (https://www.efficiencysmart.org/milford-delaware) for rebates and an electric usage monitor, insulating windows, purchasing a water heater jacket, utilizing the City’s budget plan and servicing their HVAC system. Reducing your household energy consumption by just 2.2 kWh per day will completely offset this rate adjustment.

Questions regarding utility billing or the upcoming PCA can be directed to the City’s Customer Service Department at 302-422-6616.

The City of Milford, incorporated in 1807 and located in Kent and Sussex Counties along the Mispillion River, is home to 11,000+ year-round residents, 500+ retail businesses and non-profits, local restaurants, parks, trails, small town events, major healthcare providers, an historic shipyard, and its own school district.  Known throughout the state as River Town, Art Town, Home Town, the City celebrates the beauty of its natural resources, the ingenuity of its people and its commitment to quality of life.

DEMEC was incorporated in 1979 as a public corporation constituted as a Joint Action Agency and a wholesale electric utility. DEMEC represents and serves the following municipal electric distribution utilities located in the State of Delaware: City of Newark, MSC of the City of New Castle, Town of Middletown, Town of Clayton, Town of Smyrna, City of Milford, Lewes Board of Public Works, and City of Seaford.

Share this Post