Delaware Residents Benefit from Electricity Deregulation
Since 1999, some electricity consumers in Delaware have had the flexibility to choose a retail supplier or continue with a standard offer from their local utility. This system was put in place to increase competition in the Delaware electricity market in the hopes of generating lower rates for consumers.
In order to ease the population, and the market, into the new system, Delaware also had rate caps in place until March 2005. Today there are multiple suppliers operating in both of the service areas presenting options to all sorts of electricity consumers from families to large companies.
Choosing a new supplier
If you live in or are otherwise a customer of one of these electricity utilities, you have the opportunity to shop around for your supply of electricity:
- Delaware Electric Cooperative
- Delmarva Power
Make the Most of Delaware Electric Choice
With the ability to choose among electricity plans, Delaware residents can take control of their energy costs. The rates charged by utilities are regulated by the government, whereas the rates charged by retail suppliers are specifically designed to present consumers with competitive alternatives. Thanks in part to ardent competition in the Delaware electricity market, shopping for a retail supplier can lead to better prices or plan options.
Unfortunately, not all Delaware consumers have the option of selecting a retail supplier. Those who receive electricity directly from their municipalities or aren’t within the service areas of Delaware Electric Cooperative or Delmarva Power are not eligible to choose a provider at this time.
Electricity choice in Delaware is made possible by legislation which effectively separated the electricity industry into three distinct parts:
Electricity is generated by power plants, using a variety of fuel sources, and is fed to the grid. Under deregulation, power plants operate independently of suppliers and utilities.
Next, retail electric suppliers purchase energy wholesale from generation companies. In order to attract customers, these companies then create plans with various prices and options, each attempting to offer the best deal on electricity.
Utilities are still responsible for the distribution of your electricity. Delaware Electric Cooperative or Delmarva Power still owns the power lines that transport electricity to your home or business. The delivery fees on your bill will go to your utility to help offset the cost of maintaining the distribution infrastructure and resolving power outages.
Delaware Doesn’t Support Natural Gas Choice
The model Delaware has embraced for its electricity market has not been adopted for the state’s other energy markets. Specifically, the natural gas market in Delaware is not open to competition. In 1999, the state introduced a pilot program which allowed a limited number of small businesses and residential customers to choose a retail gas supplier.
Five retail suppliers were approved to participate in the program and 7,000 customers shopped among them. Unfortunately, the test program was short lived. Due to high natural gas prices at the time and the withdrawal of several of the eligible suppliers, the program was terminated in 2001. As of October 2013, no new proposals for natural gas deregulation were pending in the Delaware legislature.
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