(a) The Commission may require every public utility to file with the Commission complete schedules of every classification
employed and of every individual or joint rate, fare or charge made, charged or executed by the public utility for any regulated
product or service supplied or rendered within this State. Every application for a certificate of public convenience and necessity
shall include a proposed tariff for approval by the Commission. A copy of all regulated tariffs then in effect shall be available
for inspection by customers at each public office of the utility where applications for service are received.
(b) This section shall not apply to charges made for electric supply service or for transmission or ancillary services on
and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Any person or entity in the business of a wastewater utility as of June 7, 2004, and subject to the supervision and regulation
of the Commission under this chapter shall file a schedule of its rates in effect as of June 7, 2004, by November 3, 2004,
in such form as the Commission may require. On July 6, 2004, such wastewater utility's rates will be deemed in effect pending
the outcome of an initial rate change request application filed in accordance with this title. Such application must be filed
by January 2, 2005. A wastewater utility required to make such a rate filing may seek the assistance of the Commission in
preparing its rate filing. Rates in effect on July 6, 2004, shall be deemed temporary and not subject to change, unless ordered
by the Commission. Section 306 of this title shall not apply pending the outcome of this initial rate setting case. The Commission
shall have 9 months to complete its review following the filing of the rate change application. However, to the extent possible,
the Commission shall attempt to expedite such application. For good cause shown, the Commission may waive any provision of
this subsection.
47 Del. Laws, c. 254, § 3; 26 Del. C. 1953, § 128; 59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 10, § 11; 74 Del. Laws, c. 317, § 7.;
§ 302. Determination of rate base.
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.
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 costs which are incurred by the water
utility, in the exercise of its good faith business judgment, 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.
59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 402, § 7.;
§ 303. Unjust or unreasonable rates and preferences; change in fuel adjustment rate; economic development credit for qualifying
corporations.
(a) No public utility shall make, impose or exact any unjust or unreasonable or unduly preferential or unjustly discriminatory
individual or joint rate for any product or service supplied or rendered by it within the State, or adopt, maintain or enforce
any regulation, practice or measurement which is unjust, unreasonable, unduly preferential or unjustly discriminatory or otherwise
in violation of law, or make, or give, directly or indirectly, any undue or unreasonable preference or advantage to any person
or corporation or to any particular description of traffic, in any respect whatsoever.
(b) The Commission shall require all utilities operating within its jurisdiction to produce evidence at a public hearing of
the need for a change in the fuel adjustment as a part of the rate-making procedure. Notwithstanding any other provisions
of this chapter, such fuel adjustment may include a separate component to adjust for or correct for any difference between
actual allowable fuel costs incurred by the utility and fuel costs recovered through base rates and the fuel adjustment. Notice
of such hearing shall be advertised in at least 1 newspaper in each of the 3 counties. As in other applications before the
Commission, the burden of proof that the fuel adjustment change is required shall be upon the utility. No change in the fuel
adjustment shall be authorized by the Commission except by affirmative vote of the majority of all members appointed to the
Commission. The Commission shall consider the evidence for and against the proposed change as it would all evidence in any
other ratemaking procedure. Consistent with the introduction of customer choice in the supply of electricity pursuant to Chapter
10 of this title, and subject to subsection (c) of this section below, this section shall have no application to rates in
effect on and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Notwithstanding subsection (b) of this section, the Commission shall determine the actual overrecovered or underrecovered
deferred fuel balance for each electric distribution company as of September 30, 1999, for Delmarva Power & Light Company
and March 31, 2000, for Delaware Electric Cooperative. Such overrecovery or underrecovery shall be either returned to or collected
from that electric distribution company's retail electric customers by a mechanism that is designed to provide a full credit
or charge of the actual deferred fuel balance and that the Commission shall adopt and order to be effective no later than
90 days after such dates. The Commission shall adopt either a single bill credit or charge mechanism or an alternative per
kilowatt-hour credit or charge mechanism to be in effect for up to a period of 12 months, depending upon the relative size
of the actual amount to be credited or charged to retail electric customers. No further adjustments of such amounts shall
be required.
(d)(1) The Commission shall authorize a public utility to establish an individual or joint rate for any product supplied or
service rendered within the State for the purposes of ensuring the State's current and future economic well-being and growth
where prior to authorizing such individual or joint rate the Commission finds:
a. That such rate is in the public interest;
b. That such rate prevents the loss of customers, encourages customers to expand present facilities and operations in Delaware
and/or attracts new customers where necessary or appropriate to promote economic development in Delaware. This finding shall
include, but is not limited to, a determination that the new or existing customer or the growth in an existing customer represents
at least 25 jobs and/or at least $2 million in capital expenditures;
c. That such rate shall provide recovery of at least the incremental cost (including capital cost) of providing the relevant
utility services;
d. If, how, and to what extent any discount being authorized below a relevant standard tariff rate shall be recovered; and
e. The period of time during which such rate shall remain in effect, normally up to 5 years.
(2) In addition to the above specific findings, the Commission shall also consider, among other things, the following items:
a. The utility's load and capacity situation;
b. The portion that the relevant utility service makes up of the customer's total operating expenses;
c. Viable economic alternatives to the utility service available to the customer;
d. The customer's ability to relocate, if relevant;
e. Reasonable efforts that the customer has made to secure government grants and/or other concessions; and
f. The effect, if any, on competitors located in Delaware of the customer or customers to which such rate may apply.
47 Del. Laws, c. 254, § 7; 26 Del. C. 1953, § 161; 59 Del. Laws, c. 397, § 1; 60 Del. Laws, c. 431, § 1; 65 Del. Laws, c. 17, § 1; 65 Del. Laws, c. 240, § 1; 70 Del. Laws, c. 48, § 5; 72 Del. Laws, c. 10, §§ 12, 13.;
§ 304. Rate changes; notice.
(a) Unless the Commission otherwise orders, no public utility shall make any change in any existing rate except after 60 days
notice to the Commission, which notice shall plainly state the changes proposed to be made in the rates then in force and
the time when the changes will go into effect. All proposed changes shall 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 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 public notice under such conditions as it may prescribe. All such changes
shall 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 151; 59 Del. Laws, c. 397, § 1; 70 Del. Laws, c. 48, § 6; 70 Del. Laws, c. 585, § 4.;
§ 305. Hearing on rate change.
Whenever there is filed with the Commission by any public utility any schedule stating a new rate, the Commission may, either
upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness of such
rate.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 152; 59 Del. Laws, c. 397, § 1.;
§ 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 rate
into effect under bond in accordance with subsection (b) of this section;
(2) Determine that a portion of such change shall become effective not later than 60 days after the filing of the petition
on a temporary basis pending the final decision of the Commission.
(b) Upon termination of the 7 months as set forth in paragraph (a)(1) of this section the proposed rate change 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 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 of the public utility's gross intrastate operating revenues.
(c) Notwithstanding subsections (a) and (b) of this section, 60 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 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 153; 59 Del. Laws, c. 397, § 1; 61 Del. Laws, c. 254, §§ 1-3; 70 Del. Laws, c. 48, § 7.;
§ 307. Burden of proof; speedy determination.
(a) In any proceeding upon the motion of the Commission, or upon complaint, or upon application of a public utility, involving
any proposed or existing rate of any public utility, or any proposed change in rates, the burden of proof to show that the
rate involved is just and reasonable is upon the public utility.
(b) The public utility shall have the burden of proof in justifying every accounting entry of record questioned by the Commission
which may suspend any charge or credit pending submission of satisfactory and sufficient proof in support thereof by the public
utility.
(c) The Commission shall give preference to the hearing and decision of any rate proceeding over all other proceedings and
decide the same as speedily as possible.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 11; 26 Del. C. 1953, § 157; 59 Del. Laws, c. 397, § 1.;
§ 308. Service as a factor in the Commission's regulation of a public utility.
(a)(1) In exercising the jurisdiction and power conferred upon the Commission by § 201 of this title, the Commission, upon
its own motion at any time it deems such action to be in the public interest or upon complaint duly filed with it, may take
into consideration, among other things, the efficiency, sufficiency and adequacy of the facilities and products provided and
services rendered by the public utility, the value of such services, products and facilities to the public, and the ability
of the public utility to improve such services, products and facilities. During such proceeding, the Commission may consider
any service complaints by subscribers and the public.
(2) If the Commission finds that the public utility's facilities, products or services are inefficient, insufficient or inadequate,
it may impose such penalty upon the public utility as may be necessary to restore such facilities, products or services to
a state of efficiency, sufficiency or adequacy. Upon significant improvement in such services, products or facilities, the
Commission may, after hearing, remove or reduce the penalty imposed.
(b) The power and authority herein conferred upon the Commission shall not be construed in any way to limit the general jurisdiction
and power conferred upon the Commission by § 201 of this title, it being the legislative intent that efficient, sufficient
and adequate services, products and facilities shall be provided by public utilities.
59 Del. Laws, c. 397, § 1.;
§ 309. Rate change by Commission initiative.
(a) The Commission may, after hearing, upon notice, by order in writing, fix just and reasonable individual rates, joint rates,
charges or schedules thereof, as well as commutation, mileage and other special rates, which shall be imposed, observed and
followed thereafter by any public utility whenever the Commission determines any existing individual rate, joint rate, toll,
charge or schedule thereof, or commutation, mileage, or other special rate to be unjust, unreasonable, insufficient, or unjustly
discriminatory or preferential.
(b) No order of the Commission requiring a change in rates shall become operative until at least 30 days after service thereof
except upon the written consent of the public utility affected.
59 Del. Laws, c. 397, § 1.;
§ 310. Temporary rate reduction on order of Commission.
(a) Whenever the Commission, after due consideration of pertinent facts and information, is of the opinion that any rates
of any public utility are producing a return in excess of a reasonable rate of return upon its rate base, or when appropriate,
its operating ratio, and that a proceeding to determine all of the issues involved in a final determination of such rates
will require more than 90 days, the Commission may, after reasonable notice to the public utility and opportunity to be heard
thereon, if the public interest so requires, immediately enter a temporary order fixing a temporary schedule of rates to be
charged by such public utility pending the final determination of such rate proceeding, which order shall become operative
and binding upon such public utility at the time prescribed by the Commission.
(b) The power of the Commission to order reductions in rates and charges of any public utility by means of such temporary
order shall be limited to reductions which will absorb not more than the amount found to be in excess of the amount of operating
income, as determined by the Commission, necessary to provide a reasonable rate of return on the rate base of the public utility
or when appropriate, its operating ratio.
(c) The temporary rate so prescribed shall be effective until the final determination of the rate proceeding, unless sooner
terminated or changed by the Commission.
(d) If, upon final disposition of the issues involved in such proceeding, the rates as finally determined are in excess of
the rates prescribed in such temporary order, then such public utility may amortize and recover by means of a temporary increase
over and above the rates finally determined such sum as represents the difference between the operating revenues obtained
from the rates prescribed in such temporary order and the operating revenues which would have been obtained under the rates
finally determined if applied during the period such temporary order was in effect.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 311; 26 Del. C. 1953, § 156; 59 Del. Laws, c. 397, § 1.;
§ 311. Determination of rate by Commission.
If, after hearing, the Commission finds any existing or proposed rate unjust, unreasonable or unjustly discriminatory, or
in any wise in violation of law, the Commission shall determine the just and reasonable rate to be charged or applied by the
utility for the service in question, and shall fix the same by order to be served upon the utility; and such rate shall thereafter
be observed until changed, as provided in this chapter. In determining the just and reasonable rate to be charged, the Commission
shall consider the revenue needs of the utility, its past and projected rates of return on its rate base, or, when appropriate,
its operating ratio.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 155; 59 Del. Laws, c. 397, § 1.;
§ 312. Action for refund of unauthorized rate increase.
If the public utility fails to make refund within 90 days after the final determination by the Commission or by the court
on appeal from the Commission's order that the rate is excessive, any person entitled to such refund may sue therefor in any
court of this State of competent jurisdiction and shall be entitled to recover, in addition to the amount of the refund due,
all court costs and reasonable attorney's fees, but no action may be maintained for that purpose unless instituted within
2 years after such final determination. Any number of persons entitled to such refund may join as plaintiffs and recover their
several claims in a single action, and in such action the court shall render a judgment severally for each plaintiff as his
interest may appear.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 154; 59 Del. Laws, c. 397, § 1.;
§ 313. Depreciation account.
The Commission may, after hearing, by order in writing, require every public utility to carry a reasonable and adequate depreciation
account in accordance with such rules, regulations, orders and forms of account as the Commission may prescribe. The Commission
may, from time to time, ascertain and determine, and by order fix, the proper and adequate rates of depreciation of the several
classes of property of each public utility or class of public utilities. Each public utility shall conform its depreciation
accounts to the rates so ascertained, determined and fixed.
47 Del. Laws, c. 254, § 4; 48 Del. Laws, c. 371, § 8; 26 Del. C. 1953, § 130; 59 Del. Laws, c. 397, § 1.;
§ 314. Water Utility Distribution System Improvement Charge.
(a) The following definitions shall apply in this section:
(1) As used in this section, "DSIC rate" refers to distribution system improvement charge.
(2) As used in this section, "DSIC costs" means depreciation expenses and pretax return associated with eligible distribution
system improvements.
(3) As used in this section, "DSIC revenues" means revenues produced through a DSIC exclusive of revenues from all other rates
and charges.
(4) As used in this section, "eligible distribution system improvements" means new, used and useful water utility plant projects
that:
a. Do not increase revenues by connecting the distribution system to new customers; and
b. Are in service; and
c. Were not included in the public utility's rate base in its most recent general rate case; and which
d. Replace or renew water mains, valves, services, meters and hydrants serving existing customers that have reached their
useful service life, are worn out, are in deteriorated condition, or which negatively impact the quality and reliability of
service to the customer if not replaced or renewed; or
e. Extend mains to eliminate dead ends which negatively impact the quality and reliability of service to the customer; or
f. Relocate existing facilities as a result of governmental actions that are not reimbursed, including but not limited to
relocations of mains located in highway rights of way as required by the Department of Transportation; or
g. Place in service, for the benefit of the customers of the water utility applying for the DSIC rate, water supply sources
identified as "A list projects" in the Governor's Task Force Report dated December 2, 1999, to resolve the regional water
supply concerns or subsequently added to the "A list projects" by the Delaware Water Supply Coordinating Council, all such
added projects to have been so identified by the Delaware Water Supply Coordinating Counsel by December 31, 2002; or
h. Place in service new or additional water treatment facilities, plant or equipment required to meet changes in state or
federal water quality standards, rules or regulations.
(5) As used in this section, "pretax return" means the revenues necessary to:
a. Produce net operating income equal to the public water utility's weighted cost of capital as established in the most recent
general rate proceeding for the public water utility multiplied by the net original cost of eligible distribution system improvements.
At any time the Commission, by its own motion, or by motion of the water utility, Commission staff or the Public Advocate,
may determine to revisit and, after hearing without the necessity of a general rate filing, reset a water utility's cost of
capital to reflect its current cost of capital. The DSIC rate shall be adjusted back to the date of the motion to reflect
any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the weighted cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(b) Notwithstanding other sections of this subchapter, a public utility providing water service may file with the Commission
rate schedules establishing a DSIC rate that will allow for the automatic adjustment of the public water utility's basic rates
and charges to provide recovery of DSIC costs on a semiannual basis.
(1) The public water utility shall serve the Division of the Public Advocate's office a copy of its filing at the time of
its filing with the Commission. Customers of the public water utility shall be notified of changes in the DSIC rate by including
appropriate information with the first bill they receive following any change in the rate.
(2) Publication of notice of the filing is not required.
(3) The effective date of changes in the DSIC rate shall be January 1 and July 1 every year.
(4) The public water utility shall file any request for a change in the DSIC rate and supporting data with the Commission
at least 30 days prior to its effective date.
(5) The DSIC rate shall be adjusted semiannually for eligible distribution system improvements placed in service during the
6-month period ending 2 months prior to the effective date of changes in the DSIC rate.
(6) The DSIC rate shall be expressed as a percentage carried to 2 decimal places and applied to the total amount billed to
each customer under the public water utility's otherwise applicable rates and charges.
(7) The DSIC rate applied between base rate filings shall be capped at 7.5% of the amount billed to customers under otherwise
applicable rates and charges, but the DSIC rate increase applied shall not exceed 5% within any 12-month period.
(8) The DSIC Rate shall be subject to audit at intervals determined by the Commission. It will also be subject to annual reconciliation
based on a period consisting of the 12 months ending December 31 of each year. The revenue received under the DSIC Rate for
the reconciliation period shall be compared to the public water utility's eligible costs for that period with the difference
between revenue received and eligible costs for the period recouped or refunded, as appropriate, over a 1-year period commencing
July 1 of each year. If the DSIC Revenues exceeded the DSIC eligible costs, such over-collections shall be refunded with interest.
(9) The DSIC Rate shall be reset to zero as of the effective date of new base rates that provide for the prospective recovery
of the annual costs theretofore recovered under the DSIC rate.
(10) The DSIC Rate shall also be reset to zero if, in any quarter, data filed with the Commission by the public water utility
show that the public water utility will earn a rate of return that exceeds the rate of return established in its last general
rate filing or by Commission order pursuant to paragraph (a)(5)a. of this section, if such was determined subsequent to the
final order in the water utility's last general rate filing. Further, the DSIC rate shall be reinstated when such data show
that the established rate of return is not exceeded and will not be exceeded if the DSIC rate is reinstated and reset.
(11) Any water utility filing for interim rate relief under this section must comply with all reasonable information requests
related to its filing, or any other audits or proceedings conducted pursuant to this section and must do so on an expedited
basis.
(c) The provisions of this section shall not be available to a water utility subject to a finding of the Commission that the
water utility is unable or unwilling to provide safe, adequate and reliable water service to its existing customers.
(d) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a DSIC.
73 Del. Laws, c. 138, § 2.;
§ 315. Utility facility relocation charge.
(a) The following definitions shall apply in this section:
(1) "Eligible utility facility relocations" means new, used and useful utility plant or facilities of an electric or natural
gas utility that:
a. Do not include that portion of any plant or facilities used to increase capacity of or connect to the transmission or distribution
system to serve new or additional load;
b. Are in service; and
c. Were not included in the utility's rate base in its most recent general rate case; and which
d. Relocate, as required or necessitated by Department of Transportation or other government agency projects, without reimbursement
existing facilities, including but not limited to, mains, lines and services, whether underground or aerial. For purposes
of this subparagraph (1)d. of this section, "existing facilities" and "relocate" include the physical relocation of existing
facilities and also include removal, abandonment or retirement of existing facilities and the construction of new facilities
in a relocated location.
(2) "Pretax return" means the revenues necessary to:
a. Produce net operating income equal to the electric or natural gas utility's weighted cost of capital as established in
the most recent general rate proceeding for that utility multiplied by the net original cost of eligible utility facility
relocations. At any time the Commission by its own motion, or by motion of the electric or natural gas utility, Commission
staff or the Public Advocate, may determine to revisit and, after hearing without the necessity of a general rate filing reset
the UFRC rate to reflect the affected utility's current cost of capital. The UFRC rate shall be adjusted back to the date
of the motion to reflect any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(3) "UFRC costs" means depreciation expenses and pretax return associated with eligible utility facility relocations.
(4) "UFRC rate" refers to utility facility relocation charge.
(5) "UFRC revenues" means revenues produced through a UFRC exclusive of revenues from all other rates and charges.
(b) Notwithstanding other sections of this subchapter, electric and natural gas utilities subject to the regulation of the
Public Service Commission under this title may file with the Commission rate schedules establishing a UFRC rate that will
allow for the automatic adjustment of the electric or natural gas utility's basic rates and charges to provide recovery of
UFRC costs on an annual basis.
(c) Any electric or natural gas utility that files under subsection (b) of this section will be subject to the same statutory
requirements of a public water utility seeking to implement or change a DSIC rate found under § 314(b)(1) et seq. of this
title, except that such statutory requirements will apply to the UFRC rate and that the level of increase permitted under
§ 314(b)(7) of this title is limited to the portion of the customer's charge related to the delivery or distribution of natural
gas or electricity.
(d) The UFRC rate shall not be available for application to the electric rates of Delmarva Power & Light Company or its successors
until July 1, 2006, and shall also not be available for application to the electric rates of Delaware Electric Cooperative
or its successors until July 1, 2005.
(e) This section applies only to regulated natural gas and electric utilities that file general rate cases with the Public
Service Commission. With respect to a telecommunications service provider electing to be governed under subchapter VII-A of
this chapter, upon application by such service provider, utility facility relocation costs not otherwise reimbursed under
§ 143 of Title 17 shall be considered by the Commission under § 707(c)(6) of this title.
(f) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a UFRC.
(a) The Commission may require every public utility to file with the Commission complete schedules of every classification
employed and of every individual or joint rate, fare or charge made, charged or executed by the public utility for any regulated
product or service supplied or rendered within this State. Every application for a certificate of public convenience and necessity
shall include a proposed tariff for approval by the Commission. A copy of all regulated tariffs then in effect shall be available
for inspection by customers at each public office of the utility where applications for service are received.
(b) This section shall not apply to charges made for electric supply service or for transmission or ancillary services on
and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Any person or entity in the business of a wastewater utility as of June 7, 2004, and subject to the supervision and regulation
of the Commission under this chapter shall file a schedule of its rates in effect as of June 7, 2004, by November 3, 2004,
in such form as the Commission may require. On July 6, 2004, such wastewater utility's rates will be deemed in effect pending
the outcome of an initial rate change request application filed in accordance with this title. Such application must be filed
by January 2, 2005. A wastewater utility required to make such a rate filing may seek the assistance of the Commission in
preparing its rate filing. Rates in effect on July 6, 2004, shall be deemed temporary and not subject to change, unless ordered
by the Commission. Section 306 of this title shall not apply pending the outcome of this initial rate setting case. The Commission
shall have 9 months to complete its review following the filing of the rate change application. However, to the extent possible,
the Commission shall attempt to expedite such application. For good cause shown, the Commission may waive any provision of
this subsection.
47 Del. Laws, c. 254, § 3; 26 Del. C. 1953, § 128; 59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 10, § 11; 74 Del. Laws, c. 317, § 7.;
§ 302. Determination of rate base.
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.
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 costs which are incurred by the water
utility, in the exercise of its good faith business judgment, 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.
59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 402, § 7.;
§ 303. Unjust or unreasonable rates and preferences; change in fuel adjustment rate; economic development credit for qualifying
corporations.
(a) No public utility shall make, impose or exact any unjust or unreasonable or unduly preferential or unjustly discriminatory
individual or joint rate for any product or service supplied or rendered by it within the State, or adopt, maintain or enforce
any regulation, practice or measurement which is unjust, unreasonable, unduly preferential or unjustly discriminatory or otherwise
in violation of law, or make, or give, directly or indirectly, any undue or unreasonable preference or advantage to any person
or corporation or to any particular description of traffic, in any respect whatsoever.
(b) The Commission shall require all utilities operating within its jurisdiction to produce evidence at a public hearing of
the need for a change in the fuel adjustment as a part of the rate-making procedure. Notwithstanding any other provisions
of this chapter, such fuel adjustment may include a separate component to adjust for or correct for any difference between
actual allowable fuel costs incurred by the utility and fuel costs recovered through base rates and the fuel adjustment. Notice
of such hearing shall be advertised in at least 1 newspaper in each of the 3 counties. As in other applications before the
Commission, the burden of proof that the fuel adjustment change is required shall be upon the utility. No change in the fuel
adjustment shall be authorized by the Commission except by affirmative vote of the majority of all members appointed to the
Commission. The Commission shall consider the evidence for and against the proposed change as it would all evidence in any
other ratemaking procedure. Consistent with the introduction of customer choice in the supply of electricity pursuant to Chapter
10 of this title, and subject to subsection (c) of this section below, this section shall have no application to rates in
effect on and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Notwithstanding subsection (b) of this section, the Commission shall determine the actual overrecovered or underrecovered
deferred fuel balance for each electric distribution company as of September 30, 1999, for Delmarva Power & Light Company
and March 31, 2000, for Delaware Electric Cooperative. Such overrecovery or underrecovery shall be either returned to or collected
from that electric distribution company's retail electric customers by a mechanism that is designed to provide a full credit
or charge of the actual deferred fuel balance and that the Commission shall adopt and order to be effective no later than
90 days after such dates. The Commission shall adopt either a single bill credit or charge mechanism or an alternative per
kilowatt-hour credit or charge mechanism to be in effect for up to a period of 12 months, depending upon the relative size
of the actual amount to be credited or charged to retail electric customers. No further adjustments of such amounts shall
be required.
(d)(1) The Commission shall authorize a public utility to establish an individual or joint rate for any product supplied or
service rendered within the State for the purposes of ensuring the State's current and future economic well-being and growth
where prior to authorizing such individual or joint rate the Commission finds:
a. That such rate is in the public interest;
b. That such rate prevents the loss of customers, encourages customers to expand present facilities and operations in Delaware
and/or attracts new customers where necessary or appropriate to promote economic development in Delaware. This finding shall
include, but is not limited to, a determination that the new or existing customer or the growth in an existing customer represents
at least 25 jobs and/or at least $2 million in capital expenditures;
c. That such rate shall provide recovery of at least the incremental cost (including capital cost) of providing the relevant
utility services;
d. If, how, and to what extent any discount being authorized below a relevant standard tariff rate shall be recovered; and
e. The period of time during which such rate shall remain in effect, normally up to 5 years.
(2) In addition to the above specific findings, the Commission shall also consider, among other things, the following items:
a. The utility's load and capacity situation;
b. The portion that the relevant utility service makes up of the customer's total operating expenses;
c. Viable economic alternatives to the utility service available to the customer;
d. The customer's ability to relocate, if relevant;
e. Reasonable efforts that the customer has made to secure government grants and/or other concessions; and
f. The effect, if any, on competitors located in Delaware of the customer or customers to which such rate may apply.
47 Del. Laws, c. 254, § 7; 26 Del. C. 1953, § 161; 59 Del. Laws, c. 397, § 1; 60 Del. Laws, c. 431, § 1; 65 Del. Laws, c. 17, § 1; 65 Del. Laws, c. 240, § 1; 70 Del. Laws, c. 48, § 5; 72 Del. Laws, c. 10, §§ 12, 13.;
§ 304. Rate changes; notice.
(a) Unless the Commission otherwise orders, no public utility shall make any change in any existing rate except after 60 days
notice to the Commission, which notice shall plainly state the changes proposed to be made in the rates then in force and
the time when the changes will go into effect. All proposed changes shall 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 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 public notice under such conditions as it may prescribe. All such changes
shall 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 151; 59 Del. Laws, c. 397, § 1; 70 Del. Laws, c. 48, § 6; 70 Del. Laws, c. 585, § 4.;
§ 305. Hearing on rate change.
Whenever there is filed with the Commission by any public utility any schedule stating a new rate, the Commission may, either
upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness of such
rate.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 152; 59 Del. Laws, c. 397, § 1.;
§ 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 rate
into effect under bond in accordance with subsection (b) of this section;
(2) Determine that a portion of such change shall become effective not later than 60 days after the filing of the petition
on a temporary basis pending the final decision of the Commission.
(b) Upon termination of the 7 months as set forth in paragraph (a)(1) of this section the proposed rate change 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 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 of the public utility's gross intrastate operating revenues.
(c) Notwithstanding subsections (a) and (b) of this section, 60 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 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 153; 59 Del. Laws, c. 397, § 1; 61 Del. Laws, c. 254, §§ 1-3; 70 Del. Laws, c. 48, § 7.;
§ 307. Burden of proof; speedy determination.
(a) In any proceeding upon the motion of the Commission, or upon complaint, or upon application of a public utility, involving
any proposed or existing rate of any public utility, or any proposed change in rates, the burden of proof to show that the
rate involved is just and reasonable is upon the public utility.
(b) The public utility shall have the burden of proof in justifying every accounting entry of record questioned by the Commission
which may suspend any charge or credit pending submission of satisfactory and sufficient proof in support thereof by the public
utility.
(c) The Commission shall give preference to the hearing and decision of any rate proceeding over all other proceedings and
decide the same as speedily as possible.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 11; 26 Del. C. 1953, § 157; 59 Del. Laws, c. 397, § 1.;
§ 308. Service as a factor in the Commission's regulation of a public utility.
(a)(1) In exercising the jurisdiction and power conferred upon the Commission by § 201 of this title, the Commission, upon
its own motion at any time it deems such action to be in the public interest or upon complaint duly filed with it, may take
into consideration, among other things, the efficiency, sufficiency and adequacy of the facilities and products provided and
services rendered by the public utility, the value of such services, products and facilities to the public, and the ability
of the public utility to improve such services, products and facilities. During such proceeding, the Commission may consider
any service complaints by subscribers and the public.
(2) If the Commission finds that the public utility's facilities, products or services are inefficient, insufficient or inadequate,
it may impose such penalty upon the public utility as may be necessary to restore such facilities, products or services to
a state of efficiency, sufficiency or adequacy. Upon significant improvement in such services, products or facilities, the
Commission may, after hearing, remove or reduce the penalty imposed.
(b) The power and authority herein conferred upon the Commission shall not be construed in any way to limit the general jurisdiction
and power conferred upon the Commission by § 201 of this title, it being the legislative intent that efficient, sufficient
and adequate services, products and facilities shall be provided by public utilities.
59 Del. Laws, c. 397, § 1.;
§ 309. Rate change by Commission initiative.
(a) The Commission may, after hearing, upon notice, by order in writing, fix just and reasonable individual rates, joint rates,
charges or schedules thereof, as well as commutation, mileage and other special rates, which shall be imposed, observed and
followed thereafter by any public utility whenever the Commission determines any existing individual rate, joint rate, toll,
charge or schedule thereof, or commutation, mileage, or other special rate to be unjust, unreasonable, insufficient, or unjustly
discriminatory or preferential.
(b) No order of the Commission requiring a change in rates shall become operative until at least 30 days after service thereof
except upon the written consent of the public utility affected.
59 Del. Laws, c. 397, § 1.;
§ 310. Temporary rate reduction on order of Commission.
(a) Whenever the Commission, after due consideration of pertinent facts and information, is of the opinion that any rates
of any public utility are producing a return in excess of a reasonable rate of return upon its rate base, or when appropriate,
its operating ratio, and that a proceeding to determine all of the issues involved in a final determination of such rates
will require more than 90 days, the Commission may, after reasonable notice to the public utility and opportunity to be heard
thereon, if the public interest so requires, immediately enter a temporary order fixing a temporary schedule of rates to be
charged by such public utility pending the final determination of such rate proceeding, which order shall become operative
and binding upon such public utility at the time prescribed by the Commission.
(b) The power of the Commission to order reductions in rates and charges of any public utility by means of such temporary
order shall be limited to reductions which will absorb not more than the amount found to be in excess of the amount of operating
income, as determined by the Commission, necessary to provide a reasonable rate of return on the rate base of the public utility
or when appropriate, its operating ratio.
(c) The temporary rate so prescribed shall be effective until the final determination of the rate proceeding, unless sooner
terminated or changed by the Commission.
(d) If, upon final disposition of the issues involved in such proceeding, the rates as finally determined are in excess of
the rates prescribed in such temporary order, then such public utility may amortize and recover by means of a temporary increase
over and above the rates finally determined such sum as represents the difference between the operating revenues obtained
from the rates prescribed in such temporary order and the operating revenues which would have been obtained under the rates
finally determined if applied during the period such temporary order was in effect.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 311; 26 Del. C. 1953, § 156; 59 Del. Laws, c. 397, § 1.;
§ 311. Determination of rate by Commission.
If, after hearing, the Commission finds any existing or proposed rate unjust, unreasonable or unjustly discriminatory, or
in any wise in violation of law, the Commission shall determine the just and reasonable rate to be charged or applied by the
utility for the service in question, and shall fix the same by order to be served upon the utility; and such rate shall thereafter
be observed until changed, as provided in this chapter. In determining the just and reasonable rate to be charged, the Commission
shall consider the revenue needs of the utility, its past and projected rates of return on its rate base, or, when appropriate,
its operating ratio.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 155; 59 Del. Laws, c. 397, § 1.;
§ 312. Action for refund of unauthorized rate increase.
If the public utility fails to make refund within 90 days after the final determination by the Commission or by the court
on appeal from the Commission's order that the rate is excessive, any person entitled to such refund may sue therefor in any
court of this State of competent jurisdiction and shall be entitled to recover, in addition to the amount of the refund due,
all court costs and reasonable attorney's fees, but no action may be maintained for that purpose unless instituted within
2 years after such final determination. Any number of persons entitled to such refund may join as plaintiffs and recover their
several claims in a single action, and in such action the court shall render a judgment severally for each plaintiff as his
interest may appear.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 154; 59 Del. Laws, c. 397, § 1.;
§ 313. Depreciation account.
The Commission may, after hearing, by order in writing, require every public utility to carry a reasonable and adequate depreciation
account in accordance with such rules, regulations, orders and forms of account as the Commission may prescribe. The Commission
may, from time to time, ascertain and determine, and by order fix, the proper and adequate rates of depreciation of the several
classes of property of each public utility or class of public utilities. Each public utility shall conform its depreciation
accounts to the rates so ascertained, determined and fixed.
47 Del. Laws, c. 254, § 4; 48 Del. Laws, c. 371, § 8; 26 Del. C. 1953, § 130; 59 Del. Laws, c. 397, § 1.;
§ 314. Water Utility Distribution System Improvement Charge.
(a) The following definitions shall apply in this section:
(1) As used in this section, "DSIC rate" refers to distribution system improvement charge.
(2) As used in this section, "DSIC costs" means depreciation expenses and pretax return associated with eligible distribution
system improvements.
(3) As used in this section, "DSIC revenues" means revenues produced through a DSIC exclusive of revenues from all other rates
and charges.
(4) As used in this section, "eligible distribution system improvements" means new, used and useful water utility plant projects
that:
a. Do not increase revenues by connecting the distribution system to new customers; and
b. Are in service; and
c. Were not included in the public utility's rate base in its most recent general rate case; and which
d. Replace or renew water mains, valves, services, meters and hydrants serving existing customers that have reached their
useful service life, are worn out, are in deteriorated condition, or which negatively impact the quality and reliability of
service to the customer if not replaced or renewed; or
e. Extend mains to eliminate dead ends which negatively impact the quality and reliability of service to the customer; or
f. Relocate existing facilities as a result of governmental actions that are not reimbursed, including but not limited to
relocations of mains located in highway rights of way as required by the Department of Transportation; or
g. Place in service, for the benefit of the customers of the water utility applying for the DSIC rate, water supply sources
identified as "A list projects" in the Governor's Task Force Report dated December 2, 1999, to resolve the regional water
supply concerns or subsequently added to the "A list projects" by the Delaware Water Supply Coordinating Council, all such
added projects to have been so identified by the Delaware Water Supply Coordinating Counsel by December 31, 2002; or
h. Place in service new or additional water treatment facilities, plant or equipment required to meet changes in state or
federal water quality standards, rules or regulations.
(5) As used in this section, "pretax return" means the revenues necessary to:
a. Produce net operating income equal to the public water utility's weighted cost of capital as established in the most recent
general rate proceeding for the public water utility multiplied by the net original cost of eligible distribution system improvements.
At any time the Commission, by its own motion, or by motion of the water utility, Commission staff or the Public Advocate,
may determine to revisit and, after hearing without the necessity of a general rate filing, reset a water utility's cost of
capital to reflect its current cost of capital. The DSIC rate shall be adjusted back to the date of the motion to reflect
any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the weighted cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(b) Notwithstanding other sections of this subchapter, a public utility providing water service may file with the Commission
rate schedules establishing a DSIC rate that will allow for the automatic adjustment of the public water utility's basic rates
and charges to provide recovery of DSIC costs on a semiannual basis.
(1) The public water utility shall serve the Division of the Public Advocate's office a copy of its filing at the time of
its filing with the Commission. Customers of the public water utility shall be notified of changes in the DSIC rate by including
appropriate information with the first bill they receive following any change in the rate.
(2) Publication of notice of the filing is not required.
(3) The effective date of changes in the DSIC rate shall be January 1 and July 1 every year.
(4) The public water utility shall file any request for a change in the DSIC rate and supporting data with the Commission
at least 30 days prior to its effective date.
(5) The DSIC rate shall be adjusted semiannually for eligible distribution system improvements placed in service during the
6-month period ending 2 months prior to the effective date of changes in the DSIC rate.
(6) The DSIC rate shall be expressed as a percentage carried to 2 decimal places and applied to the total amount billed to
each customer under the public water utility's otherwise applicable rates and charges.
(7) The DSIC rate applied between base rate filings shall be capped at 7.5% of the amount billed to customers under otherwise
applicable rates and charges, but the DSIC rate increase applied shall not exceed 5% within any 12-month period.
(8) The DSIC Rate shall be subject to audit at intervals determined by the Commission. It will also be subject to annual reconciliation
based on a period consisting of the 12 months ending December 31 of each year. The revenue received under the DSIC Rate for
the reconciliation period shall be compared to the public water utility's eligible costs for that period with the difference
between revenue received and eligible costs for the period recouped or refunded, as appropriate, over a 1-year period commencing
July 1 of each year. If the DSIC Revenues exceeded the DSIC eligible costs, such over-collections shall be refunded with interest.
(9) The DSIC Rate shall be reset to zero as of the effective date of new base rates that provide for the prospective recovery
of the annual costs theretofore recovered under the DSIC rate.
(10) The DSIC Rate shall also be reset to zero if, in any quarter, data filed with the Commission by the public water utility
show that the public water utility will earn a rate of return that exceeds the rate of return established in its last general
rate filing or by Commission order pursuant to paragraph (a)(5)a. of this section, if such was determined subsequent to the
final order in the water utility's last general rate filing. Further, the DSIC rate shall be reinstated when such data show
that the established rate of return is not exceeded and will not be exceeded if the DSIC rate is reinstated and reset.
(11) Any water utility filing for interim rate relief under this section must comply with all reasonable information requests
related to its filing, or any other audits or proceedings conducted pursuant to this section and must do so on an expedited
basis.
(c) The provisions of this section shall not be available to a water utility subject to a finding of the Commission that the
water utility is unable or unwilling to provide safe, adequate and reliable water service to its existing customers.
(d) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a DSIC.
73 Del. Laws, c. 138, § 2.;
§ 315. Utility facility relocation charge.
(a) The following definitions shall apply in this section:
(1) "Eligible utility facility relocations" means new, used and useful utility plant or facilities of an electric or natural
gas utility that:
a. Do not include that portion of any plant or facilities used to increase capacity of or connect to the transmission or distribution
system to serve new or additional load;
b. Are in service; and
c. Were not included in the utility's rate base in its most recent general rate case; and which
d. Relocate, as required or necessitated by Department of Transportation or other government agency projects, without reimbursement
existing facilities, including but not limited to, mains, lines and services, whether underground or aerial. For purposes
of this subparagraph (1)d. of this section, "existing facilities" and "relocate" include the physical relocation of existing
facilities and also include removal, abandonment or retirement of existing facilities and the construction of new facilities
in a relocated location.
(2) "Pretax return" means the revenues necessary to:
a. Produce net operating income equal to the electric or natural gas utility's weighted cost of capital as established in
the most recent general rate proceeding for that utility multiplied by the net original cost of eligible utility facility
relocations. At any time the Commission by its own motion, or by motion of the electric or natural gas utility, Commission
staff or the Public Advocate, may determine to revisit and, after hearing without the necessity of a general rate filing reset
the UFRC rate to reflect the affected utility's current cost of capital. The UFRC rate shall be adjusted back to the date
of the motion to reflect any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(3) "UFRC costs" means depreciation expenses and pretax return associated with eligible utility facility relocations.
(4) "UFRC rate" refers to utility facility relocation charge.
(5) "UFRC revenues" means revenues produced through a UFRC exclusive of revenues from all other rates and charges.
(b) Notwithstanding other sections of this subchapter, electric and natural gas utilities subject to the regulation of the
Public Service Commission under this title may file with the Commission rate schedules establishing a UFRC rate that will
allow for the automatic adjustment of the electric or natural gas utility's basic rates and charges to provide recovery of
UFRC costs on an annual basis.
(c) Any electric or natural gas utility that files under subsection (b) of this section will be subject to the same statutory
requirements of a public water utility seeking to implement or change a DSIC rate found under § 314(b)(1) et seq. of this
title, except that such statutory requirements will apply to the UFRC rate and that the level of increase permitted under
§ 314(b)(7) of this title is limited to the portion of the customer's charge related to the delivery or distribution of natural
gas or electricity.
(d) The UFRC rate shall not be available for application to the electric rates of Delmarva Power & Light Company or its successors
until July 1, 2006, and shall also not be available for application to the electric rates of Delaware Electric Cooperative
or its successors until July 1, 2005.
(e) This section applies only to regulated natural gas and electric utilities that file general rate cases with the Public
Service Commission. With respect to a telecommunications service provider electing to be governed under subchapter VII-A of
this chapter, upon application by such service provider, utility facility relocation costs not otherwise reimbursed under
§ 143 of Title 17 shall be considered by the Commission under § 707(c)(6) of this title.
(f) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a UFRC.
(a) The Commission may require every public utility to file with the Commission complete schedules of every classification
employed and of every individual or joint rate, fare or charge made, charged or executed by the public utility for any regulated
product or service supplied or rendered within this State. Every application for a certificate of public convenience and necessity
shall include a proposed tariff for approval by the Commission. A copy of all regulated tariffs then in effect shall be available
for inspection by customers at each public office of the utility where applications for service are received.
(b) This section shall not apply to charges made for electric supply service or for transmission or ancillary services on
and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Any person or entity in the business of a wastewater utility as of June 7, 2004, and subject to the supervision and regulation
of the Commission under this chapter shall file a schedule of its rates in effect as of June 7, 2004, by November 3, 2004,
in such form as the Commission may require. On July 6, 2004, such wastewater utility's rates will be deemed in effect pending
the outcome of an initial rate change request application filed in accordance with this title. Such application must be filed
by January 2, 2005. A wastewater utility required to make such a rate filing may seek the assistance of the Commission in
preparing its rate filing. Rates in effect on July 6, 2004, shall be deemed temporary and not subject to change, unless ordered
by the Commission. Section 306 of this title shall not apply pending the outcome of this initial rate setting case. The Commission
shall have 9 months to complete its review following the filing of the rate change application. However, to the extent possible,
the Commission shall attempt to expedite such application. For good cause shown, the Commission may waive any provision of
this subsection.
47 Del. Laws, c. 254, § 3; 26 Del. C. 1953, § 128; 59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 10, § 11; 74 Del. Laws, c. 317, § 7.;
§ 302. Determination of rate base.
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.
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 costs which are incurred by the water
utility, in the exercise of its good faith business judgment, 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.
59 Del. Laws, c. 397, § 1; 72 Del. Laws, c. 402, § 7.;
§ 303. Unjust or unreasonable rates and preferences; change in fuel adjustment rate; economic development credit for qualifying
corporations.
(a) No public utility shall make, impose or exact any unjust or unreasonable or unduly preferential or unjustly discriminatory
individual or joint rate for any product or service supplied or rendered by it within the State, or adopt, maintain or enforce
any regulation, practice or measurement which is unjust, unreasonable, unduly preferential or unjustly discriminatory or otherwise
in violation of law, or make, or give, directly or indirectly, any undue or unreasonable preference or advantage to any person
or corporation or to any particular description of traffic, in any respect whatsoever.
(b) The Commission shall require all utilities operating within its jurisdiction to produce evidence at a public hearing of
the need for a change in the fuel adjustment as a part of the rate-making procedure. Notwithstanding any other provisions
of this chapter, such fuel adjustment may include a separate component to adjust for or correct for any difference between
actual allowable fuel costs incurred by the utility and fuel costs recovered through base rates and the fuel adjustment. Notice
of such hearing shall be advertised in at least 1 newspaper in each of the 3 counties. As in other applications before the
Commission, the burden of proof that the fuel adjustment change is required shall be upon the utility. No change in the fuel
adjustment shall be authorized by the Commission except by affirmative vote of the majority of all members appointed to the
Commission. The Commission shall consider the evidence for and against the proposed change as it would all evidence in any
other ratemaking procedure. Consistent with the introduction of customer choice in the supply of electricity pursuant to Chapter
10 of this title, and subject to subsection (c) of this section below, this section shall have no application to rates in
effect on and after October 1, 1999, for Delmarva Power & Light Company and April 1, 2000, for Delaware Electric Cooperative.
(c) Notwithstanding subsection (b) of this section, the Commission shall determine the actual overrecovered or underrecovered
deferred fuel balance for each electric distribution company as of September 30, 1999, for Delmarva Power & Light Company
and March 31, 2000, for Delaware Electric Cooperative. Such overrecovery or underrecovery shall be either returned to or collected
from that electric distribution company's retail electric customers by a mechanism that is designed to provide a full credit
or charge of the actual deferred fuel balance and that the Commission shall adopt and order to be effective no later than
90 days after such dates. The Commission shall adopt either a single bill credit or charge mechanism or an alternative per
kilowatt-hour credit or charge mechanism to be in effect for up to a period of 12 months, depending upon the relative size
of the actual amount to be credited or charged to retail electric customers. No further adjustments of such amounts shall
be required.
(d)(1) The Commission shall authorize a public utility to establish an individual or joint rate for any product supplied or
service rendered within the State for the purposes of ensuring the State's current and future economic well-being and growth
where prior to authorizing such individual or joint rate the Commission finds:
a. That such rate is in the public interest;
b. That such rate prevents the loss of customers, encourages customers to expand present facilities and operations in Delaware
and/or attracts new customers where necessary or appropriate to promote economic development in Delaware. This finding shall
include, but is not limited to, a determination that the new or existing customer or the growth in an existing customer represents
at least 25 jobs and/or at least $2 million in capital expenditures;
c. That such rate shall provide recovery of at least the incremental cost (including capital cost) of providing the relevant
utility services;
d. If, how, and to what extent any discount being authorized below a relevant standard tariff rate shall be recovered; and
e. The period of time during which such rate shall remain in effect, normally up to 5 years.
(2) In addition to the above specific findings, the Commission shall also consider, among other things, the following items:
a. The utility's load and capacity situation;
b. The portion that the relevant utility service makes up of the customer's total operating expenses;
c. Viable economic alternatives to the utility service available to the customer;
d. The customer's ability to relocate, if relevant;
e. Reasonable efforts that the customer has made to secure government grants and/or other concessions; and
f. The effect, if any, on competitors located in Delaware of the customer or customers to which such rate may apply.
47 Del. Laws, c. 254, § 7; 26 Del. C. 1953, § 161; 59 Del. Laws, c. 397, § 1; 60 Del. Laws, c. 431, § 1; 65 Del. Laws, c. 17, § 1; 65 Del. Laws, c. 240, § 1; 70 Del. Laws, c. 48, § 5; 72 Del. Laws, c. 10, §§ 12, 13.;
§ 304. Rate changes; notice.
(a) Unless the Commission otherwise orders, no public utility shall make any change in any existing rate except after 60 days
notice to the Commission, which notice shall plainly state the changes proposed to be made in the rates then in force and
the time when the changes will go into effect. All proposed changes shall 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 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 public notice under such conditions as it may prescribe. All such changes
shall 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 151; 59 Del. Laws, c. 397, § 1; 70 Del. Laws, c. 48, § 6; 70 Del. Laws, c. 585, § 4.;
§ 305. Hearing on rate change.
Whenever there is filed with the Commission by any public utility any schedule stating a new rate, the Commission may, either
upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness of such
rate.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 152; 59 Del. Laws, c. 397, § 1.;
§ 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 rate
into effect under bond in accordance with subsection (b) of this section;
(2) Determine that a portion of such change shall become effective not later than 60 days after the filing of the petition
on a temporary basis pending the final decision of the Commission.
(b) Upon termination of the 7 months as set forth in paragraph (a)(1) of this section the proposed rate change 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 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 of the public utility's gross intrastate operating revenues.
(c) Notwithstanding subsections (a) and (b) of this section, 60 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 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.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 153; 59 Del. Laws, c. 397, § 1; 61 Del. Laws, c. 254, §§ 1-3; 70 Del. Laws, c. 48, § 7.;
§ 307. Burden of proof; speedy determination.
(a) In any proceeding upon the motion of the Commission, or upon complaint, or upon application of a public utility, involving
any proposed or existing rate of any public utility, or any proposed change in rates, the burden of proof to show that the
rate involved is just and reasonable is upon the public utility.
(b) The public utility shall have the burden of proof in justifying every accounting entry of record questioned by the Commission
which may suspend any charge or credit pending submission of satisfactory and sufficient proof in support thereof by the public
utility.
(c) The Commission shall give preference to the hearing and decision of any rate proceeding over all other proceedings and
decide the same as speedily as possible.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 11; 26 Del. C. 1953, § 157; 59 Del. Laws, c. 397, § 1.;
§ 308. Service as a factor in the Commission's regulation of a public utility.
(a)(1) In exercising the jurisdiction and power conferred upon the Commission by § 201 of this title, the Commission, upon
its own motion at any time it deems such action to be in the public interest or upon complaint duly filed with it, may take
into consideration, among other things, the efficiency, sufficiency and adequacy of the facilities and products provided and
services rendered by the public utility, the value of such services, products and facilities to the public, and the ability
of the public utility to improve such services, products and facilities. During such proceeding, the Commission may consider
any service complaints by subscribers and the public.
(2) If the Commission finds that the public utility's facilities, products or services are inefficient, insufficient or inadequate,
it may impose such penalty upon the public utility as may be necessary to restore such facilities, products or services to
a state of efficiency, sufficiency or adequacy. Upon significant improvement in such services, products or facilities, the
Commission may, after hearing, remove or reduce the penalty imposed.
(b) The power and authority herein conferred upon the Commission shall not be construed in any way to limit the general jurisdiction
and power conferred upon the Commission by § 201 of this title, it being the legislative intent that efficient, sufficient
and adequate services, products and facilities shall be provided by public utilities.
59 Del. Laws, c. 397, § 1.;
§ 309. Rate change by Commission initiative.
(a) The Commission may, after hearing, upon notice, by order in writing, fix just and reasonable individual rates, joint rates,
charges or schedules thereof, as well as commutation, mileage and other special rates, which shall be imposed, observed and
followed thereafter by any public utility whenever the Commission determines any existing individual rate, joint rate, toll,
charge or schedule thereof, or commutation, mileage, or other special rate to be unjust, unreasonable, insufficient, or unjustly
discriminatory or preferential.
(b) No order of the Commission requiring a change in rates shall become operative until at least 30 days after service thereof
except upon the written consent of the public utility affected.
59 Del. Laws, c. 397, § 1.;
§ 310. Temporary rate reduction on order of Commission.
(a) Whenever the Commission, after due consideration of pertinent facts and information, is of the opinion that any rates
of any public utility are producing a return in excess of a reasonable rate of return upon its rate base, or when appropriate,
its operating ratio, and that a proceeding to determine all of the issues involved in a final determination of such rates
will require more than 90 days, the Commission may, after reasonable notice to the public utility and opportunity to be heard
thereon, if the public interest so requires, immediately enter a temporary order fixing a temporary schedule of rates to be
charged by such public utility pending the final determination of such rate proceeding, which order shall become operative
and binding upon such public utility at the time prescribed by the Commission.
(b) The power of the Commission to order reductions in rates and charges of any public utility by means of such temporary
order shall be limited to reductions which will absorb not more than the amount found to be in excess of the amount of operating
income, as determined by the Commission, necessary to provide a reasonable rate of return on the rate base of the public utility
or when appropriate, its operating ratio.
(c) The temporary rate so prescribed shall be effective until the final determination of the rate proceeding, unless sooner
terminated or changed by the Commission.
(d) If, upon final disposition of the issues involved in such proceeding, the rates as finally determined are in excess of
the rates prescribed in such temporary order, then such public utility may amortize and recover by means of a temporary increase
over and above the rates finally determined such sum as represents the difference between the operating revenues obtained
from the rates prescribed in such temporary order and the operating revenues which would have been obtained under the rates
finally determined if applied during the period such temporary order was in effect.
47 Del. Laws, c. 254, § 5A; 48 Del. Laws, c. 371, § 311; 26 Del. C. 1953, § 156; 59 Del. Laws, c. 397, § 1.;
§ 311. Determination of rate by Commission.
If, after hearing, the Commission finds any existing or proposed rate unjust, unreasonable or unjustly discriminatory, or
in any wise in violation of law, the Commission shall determine the just and reasonable rate to be charged or applied by the
utility for the service in question, and shall fix the same by order to be served upon the utility; and such rate shall thereafter
be observed until changed, as provided in this chapter. In determining the just and reasonable rate to be charged, the Commission
shall consider the revenue needs of the utility, its past and projected rates of return on its rate base, or, when appropriate,
its operating ratio.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 155; 59 Del. Laws, c. 397, § 1.;
§ 312. Action for refund of unauthorized rate increase.
If the public utility fails to make refund within 90 days after the final determination by the Commission or by the court
on appeal from the Commission's order that the rate is excessive, any person entitled to such refund may sue therefor in any
court of this State of competent jurisdiction and shall be entitled to recover, in addition to the amount of the refund due,
all court costs and reasonable attorney's fees, but no action may be maintained for that purpose unless instituted within
2 years after such final determination. Any number of persons entitled to such refund may join as plaintiffs and recover their
several claims in a single action, and in such action the court shall render a judgment severally for each plaintiff as his
interest may appear.
47 Del. Laws, c. 254, § 5; 48 Del. Laws, c. 371, § 10; 26 Del. C. 1953, § 154; 59 Del. Laws, c. 397, § 1.;
§ 313. Depreciation account.
The Commission may, after hearing, by order in writing, require every public utility to carry a reasonable and adequate depreciation
account in accordance with such rules, regulations, orders and forms of account as the Commission may prescribe. The Commission
may, from time to time, ascertain and determine, and by order fix, the proper and adequate rates of depreciation of the several
classes of property of each public utility or class of public utilities. Each public utility shall conform its depreciation
accounts to the rates so ascertained, determined and fixed.
47 Del. Laws, c. 254, § 4; 48 Del. Laws, c. 371, § 8; 26 Del. C. 1953, § 130; 59 Del. Laws, c. 397, § 1.;
§ 314. Water Utility Distribution System Improvement Charge.
(a) The following definitions shall apply in this section:
(1) As used in this section, "DSIC rate" refers to distribution system improvement charge.
(2) As used in this section, "DSIC costs" means depreciation expenses and pretax return associated with eligible distribution
system improvements.
(3) As used in this section, "DSIC revenues" means revenues produced through a DSIC exclusive of revenues from all other rates
and charges.
(4) As used in this section, "eligible distribution system improvements" means new, used and useful water utility plant projects
that:
a. Do not increase revenues by connecting the distribution system to new customers; and
b. Are in service; and
c. Were not included in the public utility's rate base in its most recent general rate case; and which
d. Replace or renew water mains, valves, services, meters and hydrants serving existing customers that have reached their
useful service life, are worn out, are in deteriorated condition, or which negatively impact the quality and reliability of
service to the customer if not replaced or renewed; or
e. Extend mains to eliminate dead ends which negatively impact the quality and reliability of service to the customer; or
f. Relocate existing facilities as a result of governmental actions that are not reimbursed, including but not limited to
relocations of mains located in highway rights of way as required by the Department of Transportation; or
g. Place in service, for the benefit of the customers of the water utility applying for the DSIC rate, water supply sources
identified as "A list projects" in the Governor's Task Force Report dated December 2, 1999, to resolve the regional water
supply concerns or subsequently added to the "A list projects" by the Delaware Water Supply Coordinating Council, all such
added projects to have been so identified by the Delaware Water Supply Coordinating Counsel by December 31, 2002; or
h. Place in service new or additional water treatment facilities, plant or equipment required to meet changes in state or
federal water quality standards, rules or regulations.
(5) As used in this section, "pretax return" means the revenues necessary to:
a. Produce net operating income equal to the public water utility's weighted cost of capital as established in the most recent
general rate proceeding for the public water utility multiplied by the net original cost of eligible distribution system improvements.
At any time the Commission, by its own motion, or by motion of the water utility, Commission staff or the Public Advocate,
may determine to revisit and, after hearing without the necessity of a general rate filing, reset a water utility's cost of
capital to reflect its current cost of capital. The DSIC rate shall be adjusted back to the date of the motion to reflect
any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the weighted cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(b) Notwithstanding other sections of this subchapter, a public utility providing water service may file with the Commission
rate schedules establishing a DSIC rate that will allow for the automatic adjustment of the public water utility's basic rates
and charges to provide recovery of DSIC costs on a semiannual basis.
(1) The public water utility shall serve the Division of the Public Advocate's office a copy of its filing at the time of
its filing with the Commission. Customers of the public water utility shall be notified of changes in the DSIC rate by including
appropriate information with the first bill they receive following any change in the rate.
(2) Publication of notice of the filing is not required.
(3) The effective date of changes in the DSIC rate shall be January 1 and July 1 every year.
(4) The public water utility shall file any request for a change in the DSIC rate and supporting data with the Commission
at least 30 days prior to its effective date.
(5) The DSIC rate shall be adjusted semiannually for eligible distribution system improvements placed in service during the
6-month period ending 2 months prior to the effective date of changes in the DSIC rate.
(6) The DSIC rate shall be expressed as a percentage carried to 2 decimal places and applied to the total amount billed to
each customer under the public water utility's otherwise applicable rates and charges.
(7) The DSIC rate applied between base rate filings shall be capped at 7.5% of the amount billed to customers under otherwise
applicable rates and charges, but the DSIC rate increase applied shall not exceed 5% within any 12-month period.
(8) The DSIC Rate shall be subject to audit at intervals determined by the Commission. It will also be subject to annual reconciliation
based on a period consisting of the 12 months ending December 31 of each year. The revenue received under the DSIC Rate for
the reconciliation period shall be compared to the public water utility's eligible costs for that period with the difference
between revenue received and eligible costs for the period recouped or refunded, as appropriate, over a 1-year period commencing
July 1 of each year. If the DSIC Revenues exceeded the DSIC eligible costs, such over-collections shall be refunded with interest.
(9) The DSIC Rate shall be reset to zero as of the effective date of new base rates that provide for the prospective recovery
of the annual costs theretofore recovered under the DSIC rate.
(10) The DSIC Rate shall also be reset to zero if, in any quarter, data filed with the Commission by the public water utility
show that the public water utility will earn a rate of return that exceeds the rate of return established in its last general
rate filing or by Commission order pursuant to paragraph (a)(5)a. of this section, if such was determined subsequent to the
final order in the water utility's last general rate filing. Further, the DSIC rate shall be reinstated when such data show
that the established rate of return is not exceeded and will not be exceeded if the DSIC rate is reinstated and reset.
(11) Any water utility filing for interim rate relief under this section must comply with all reasonable information requests
related to its filing, or any other audits or proceedings conducted pursuant to this section and must do so on an expedited
basis.
(c) The provisions of this section shall not be available to a water utility subject to a finding of the Commission that the
water utility is unable or unwilling to provide safe, adequate and reliable water service to its existing customers.
(d) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a DSIC.
73 Del. Laws, c. 138, § 2.;
§ 315. Utility facility relocation charge.
(a) The following definitions shall apply in this section:
(1) "Eligible utility facility relocations" means new, used and useful utility plant or facilities of an electric or natural
gas utility that:
a. Do not include that portion of any plant or facilities used to increase capacity of or connect to the transmission or distribution
system to serve new or additional load;
b. Are in service; and
c. Were not included in the utility's rate base in its most recent general rate case; and which
d. Relocate, as required or necessitated by Department of Transportation or other government agency projects, without reimbursement
existing facilities, including but not limited to, mains, lines and services, whether underground or aerial. For purposes
of this subparagraph (1)d. of this section, "existing facilities" and "relocate" include the physical relocation of existing
facilities and also include removal, abandonment or retirement of existing facilities and the construction of new facilities
in a relocated location.
(2) "Pretax return" means the revenues necessary to:
a. Produce net operating income equal to the electric or natural gas utility's weighted cost of capital as established in
the most recent general rate proceeding for that utility multiplied by the net original cost of eligible utility facility
relocations. At any time the Commission by its own motion, or by motion of the electric or natural gas utility, Commission
staff or the Public Advocate, may determine to revisit and, after hearing without the necessity of a general rate filing reset
the UFRC rate to reflect the affected utility's current cost of capital. The UFRC rate shall be adjusted back to the date
of the motion to reflect any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(3) "UFRC costs" means depreciation expenses and pretax return associated with eligible utility facility relocations.
(4) "UFRC rate" refers to utility facility relocation charge.
(5) "UFRC revenues" means revenues produced through a UFRC exclusive of revenues from all other rates and charges.
(b) Notwithstanding other sections of this subchapter, electric and natural gas utilities subject to the regulation of the
Public Service Commission under this title may file with the Commission rate schedules establishing a UFRC rate that will
allow for the automatic adjustment of the electric or natural gas utility's basic rates and charges to provide recovery of
UFRC costs on an annual basis.
(c) Any electric or natural gas utility that files under subsection (b) of this section will be subject to the same statutory
requirements of a public water utility seeking to implement or change a DSIC rate found under § 314(b)(1) et seq. of this
title, except that such statutory requirements will apply to the UFRC rate and that the level of increase permitted under
§ 314(b)(7) of this title is limited to the portion of the customer's charge related to the delivery or distribution of natural
gas or electricity.
(d) The UFRC rate shall not be available for application to the electric rates of Delmarva Power & Light Company or its successors
until July 1, 2006, and shall also not be available for application to the electric rates of Delaware Electric Cooperative
or its successors until July 1, 2005.
(e) This section applies only to regulated natural gas and electric utilities that file general rate cases with the Public
Service Commission. With respect to a telecommunications service provider electing to be governed under subchapter VII-A of
this chapter, upon application by such service provider, utility facility relocation costs not otherwise reimbursed under
§ 143 of Title 17 shall be considered by the Commission under § 707(c)(6) of this title.
(f) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable
or necessary to administer a UFRC.
