Delmarva Power cites generation costs behind higher customer bills

DELMARVA — High temperatures are here to stay for a while, and with them, higher energy bills.

Delmarva Power said the nation is facing an energy affordability challenge because there are not enough power plants to meet current demand. As technology, artificial intelligence and data centers continue to expand, consumers are seeing higher electricity costs.

Delmarva Power Regional President Marcus Beal said electricity prices are determined by power producers in the PJM marketplace.

“That price has increased over the past few years, from about $28 per megawatt-hour to about $333 per megawatt-day, so that percentage increase is massive,” Beal said. “That is what is driving the increased supply costs that folks are seeing on their bills, making every kilowatt our customers use more expensive.”

Delmarva Power said the average customer’s summer electric bill has increased by about $28 per month over the past three years.

“About 30% is the actual delivery component of your bill,” Beal said. “That’s all of the infrastructure investments that we have to make to maintain, upgrade and build out the grid. If you broke it down roughly, about 60% of your bill is tied to generation.”

Beal said additional surcharges and taxes also appear on customers’ bills but are costs the company does not profit from.

“But it does appear on our bill with our logo, so we try our best to explain why folks are seeing the increase,” Beal said. “The side that we control, about 30% to 33% of your bill, is the delivery charge. That name is very confusing for a lot of folks.”

Beal said the delivery charge covers the cost of maintaining and expanding the electric grid, including poles, wires, substations and transformers that deliver electricity from power plants to homes and businesses.

“If you looked at the poles, the wires, the substations, the transformers — all of the equipment that is required to get electricity from a power plant to your home — we have to maintain that and build it out when a new home, neighborhood or business is built,” he said. “That is the portion that we are responsible for, about a third of your bill.”