The City of Milford, a community electric utility powered by the Delaware Municipal Electric Corporation (DEMEC), will be implementing a $0.00396 per kilowatt-hour (kWh) Power Cost Adjustment beginning in February. The Power Cost Adjustment (PCA) is a required pass-through of DEMEC’s wholesale power cost increase billed to all member cities effective Jan. 1 through the end of 2022. DEMEC’s power cost increase is primarily due to the global increase in natural gas prices. The $0.00396 increase will result in a 3.1 percent increase in electric bills for the average households and small business accounts in Milford.
This is the first PCA increase required in more than nine years. The City’s electric rate structure is unchanged; only the PCA component is triggered by the upcoming power cost increase. In recent years, a negative PCA has led to customers receiving credits on utility bills and in June 2021, City Council approved the use of those credits to expand the city’s Efficiency Smart program and green energy fund. Even with the upcoming PCA, residential electric rates in Milford have decreased eight percent over the last five fiscal years (chart below).
“Natural gas spiked almost 200 percent in the past few months,” Finance Director Lou Vitola said, “but DEMEC and the City of Milford have been planning effectively for adverse market events like this, so the average impact is only 3.1 percent.”
The natural gas market is impacting the city’s electric rates because Milford’s power supply is driven by almost 71 percent natural gas-fired generation. Since 2008, DEMEC has worked with Milford and its member communities to diversify its power supply portfolio with a commitment to carbon reduction.
According to DEMEC’s 2020 Annual Report, “Currently, over 85 percent of DEMEC’s power supply comes from extremely low to no carbon emission resources. That means electric customers in our member communities are already benefiting from our environmentally focused shift in energy resources, like solar and wind. While increasing renewable energy sources, DEMEC members also continue to provide the nationally recognized reliability customers know and expect with the support of dependable natural gas and other market contracts. Over the past ten years, DEMEC has reduced its carbon footprint by 50 percent through our commitment to sustainable energy sources and energy reduction programs.”
To help offset this increase, the city encourages customers to utilize Efficiency Smart (https://www.efficiencysmart.org/milford-delaware) for rebates and an electric usage monitor, insulating windows, purchasing a water heater jacket, utilizing the City’s budget plan and servicing their HVAC system.
Questions regarding utility billing or the upcoming PCA can be directed to the City’s Customer Service Department at 302-422-6616.
The City of Milford, incorporated in 1807 and located in Kent and Sussex Counties along the Mispillion River, is home to 10,000+ year-round residents, 500+ retail businesses and non-profits, local restaurants, parks, trails, small town events, major healthcare providers, an historic shipyard, and its own school district. Known throughout the state as River Town, Art Town, Home Town, the City celebrates the beauty of its natural resources, the ingenuity of its people and its commitment to quality of life.