Delaware

Summary Delaware is in the process of implementing significant changes to create and provide energy efficiency programs and services in a state where such programs and services have not existed for many years. The state recently established the Delaware Sustainable Energy Utility (SEU) as the nonprofit entity that will operate programs to deliver comprehensive end-user efficiency and customer-sited renewable energy services to Delaware's households and businesses. The state chose Applied Energy Group as the lead contract administrator of the SEU. The board of the SEU met for the first time in January 2009. The SEU will be funded via special purpose bonds issued by the state. These bonds will be repaid via a number of mechanisms including shared savings generated from energy efficiency programs as well as from Delaware's existing Green Energy Fund, whichis supported by a customer charge on electricity bills. In 2009, Delaware approved Energy Efficiency Resource Standards (EERS) that set goals for consumption and peak demand for electricity and natural gas utilities. The goals are 15% electricity consumption and peak demand savings and 10% natural gas consumption savings by 2015. Beginning in 2006, Delaware law requires electricity providers to engage in integrated resource planning (IRP). The commission is currently working on establishing rules governing IRP. Utilities are required to develop and file demand-side management and energy efficiency plans with the commission. According to the Energy Information Administration, Delaware electric utilities spent $208,000 on energy efficiency in 2007, but did not report any MWh savings.

Utility-sector energy efficiency programs have not been available in Delaware since the state restructured its electric utility industry in the 1990s. Delaware has taken action to remedy this lack of programs by creating "the nation's first full-fledged sustainable energy utility (SEU)." Delaware Governor Ruth Ann Minner signed the law that created this nonprofit corporation on June 28, 2007—Senate Bill 18, Substitute Number 1 in the 144th General Assembly. The law created a nonprofit corporation under the direction of a State Energy Coordinator within the Delaware Energy Office, Department of Natural Resources and Environmental Control. This organization is directed to leverage public and private funds and utilize special purpose bond proceeds to fund its operations and programs. The state chose Applied Energy Group as the lead contract administrator of the SEU. The board of the SEU met for the first time in January 2009. 

The SEU's goals are to advance energy efficiency and affordable energy as well as promote and help achieve customer-sited renewable energy generation. The SEU is the product of a legislative task force created in 2006. The new SEU will initiate an ENERGY STAR Appliance Rebate Program in early September as the first of its portfolio of energy efficiency and renewable energy programs. This will be closely followed by a Commercial/Industrial Lighting Efficiency Program. Development of a comprehensive Residential Home Performance Program is also underway and this program will serve as a follow on to the current Pilot Home Performance with Energy Star Program. Additional SEU programs for Institutional Buildings Energy Efficiency and an expansion of the Commercial program for lighting to include additional measures such as HVAC, Pumps, Motors and other efficiency measures will begin in 2010, according to the Delaware Energy Office.

Parallel with the development of the sustainable energy utility, electric utilities are now instituting changes in their planning and operations as a result of new regulations requiring integrated resource planning and demand-side management. In 2008, Delmarva Power & Light Company submitted its third comprehensive demand-side management, advanced metering, and energy efficiency plan to the Delaware Public Service Commission (Docket No. 07-20). The plan included a portfolio of energy efficiency and demand response programs that the company will share with the SEU to assist in the SEU's program design efforts. Delaware electric utilities did not report any efficiency program savings to the Energy Information Administration in 2007.

Back to Top

The Sustainable Energy Utility is funded initially via "special purpose" bonding by the state of Delaware. Bonds are to be sold in two or more offerings to match expected expenditures. Revenue sources to pay off the bond debt and help the SEU to grow will include:

• Shared savings agreements with program participants,
• Partial proceeds from the sale of renewable energy credits in local and regional markets, and
• Green energy fund monies (a fund established by earlier statute that collects revenue from electricity sales).

Expected yearly funding for energy efficiency program spending by the SEU for the period 2008–2010 will be about $6–7 million. Atmos Energy has budgeted $565,000 for natural gas programs in 2009 and $691,000 in 2010. The company reported that this total budget exceeds state requirements by 10%. According to the Energy Information Administration, Delaware utilities spent $208,000 on energy efficiency in 2007.

Back to Top

On July 29, 2009, Governor Markell signed SB 106, which establishes Energy Efficiency Resource Standards (EERS) and sets goals for consumption and peak demand for electricity and natural gas utilities. The goals are 15% electricity consumption and peak demand savings and 10% natural gas consumption savings by 2015. Savings will be reported to the State Energy Coordinator by Affected Energy Providers on an annual basis. The bill calls for the establishment of a Workgroup that will produce a study and recommendations regarding the planning and implementation of the EERS.

Back to Top

The Delaware Public Service Commission (PSC) had established a docket for considering revenue decoupling for electric and natural gas utilities (PSC Regulation Docket No. 59, March 2007). Decoupling reduces the financial disincentive for utilities to support energy efficiency by separating utilities’ profits from their levels of sales. The PSC recently closed this docket and Docket No. 07-28, relating to energy efficiency, in Order 7240 (September 16, 2008).  The PSC approved electric and gas decoupling rate design, in concept, with a modified fixed variable rate design suggested by PSC staff .  The issue of decoupling will be evaluated on a utility-by-utility basis at upcoming base rate case proceedings.  In September 2009, the PSC entered Order 7641 (Docket No. 09-276T), examining the adoption of a modified fixed variable rate design for Delmarva Power (electric). Moreover, SB 106 (codified at Title 26, Chapter 15 of the Delaware Code) specifically mandates that decoupled rate design mechanisms be implemented no later than December 2010 for regulated natural gas and electric utilities (Sec. 1500(b)(8)).

Back to Top

None in place or proposed.

Back to Top

The Electric Utility Retail Customer Supply Act of 2006 requires electricity providers to file 10-year integrated resource plans that will address long-term supply contracts, including provisions for renewable energy and demand-side resources (26 Del. C. §1001-1012.) Additional integrated resource planning rules are under consideration. In PSC Regulation Docket Number 60, the PSC entered Order Number 7318 (Dec. 4, 2007), stating a proposed integrated resource planning regulation. Staff and interested parties have continued to revise draft regulations. The most current version includes demand-side management as an option that must be evaluated in the Integrated Resource Planning process.

SB 106 also requires utilities to first consider electricity demand response and DSM strategies for meeting base load and load growth needs.

Back to Top

• Delaware Public Service Commission
• Delaware Sustainable Energy Utility Task Force
  • Final report to the Delaware Legislature
• Delmarva Power & Light Company's Blue Print for the Future Plan for Demand Side Management, Advanced Metering and Energy Efficiency (application to the Delaware PSC)
• An Act to Amend Title 29 of the Delaware Code to Create a Sustainable Energy Utility in the State of Delaware (Senate Substitute No. 21 for Senate Bill 18, 144th General Assembly)
• Database of State Incentives for Renewables and Efficiency
• Delaware Public Service Commission, Integrated Resource Planning Regulation, Staff’s Draft Version. May 21, 2009
• Delaware SB 106

Last Updated 10/19/2009

Back to Top