DelawareSB 59153rd General Assembly (2024–2026)Senate

AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO PUBLIC UTILITIES AND UTILITY RATES.

Sponsored By: Stephanie L. Hansen (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

New ways to set utility bills

Beginning January 1, 2026, Delaware's Public Service Commission can use alternatives to its usual investment-and-return rate rules. Options include performance incentives, profit sharing, price caps, price indexing, service-based pricing groups, and different returns for different services. Alternatives, including competitive services, must support adequate service and fair, reasonable, prudent rates. The Commission can act on an application or its own initiative, but must provide notice and a hearing. It must find that departing from its usual rules serves the public interest and supports fair, reasonable, prudent rates.

Utilities must justify costs in bills

Beginning January 1, 2026, Delaware utilities must prove proposed and existing rates are fair, reasonable, and based on prudent spending. This replaces the earlier emphasis on business judgment. The Public Service Commission judges spending using what the utility knew or reasonably should have known at the time. It can reject part of a cost and adjust investments included in rates, operating expenses, or fuel-cost recovery. After notice and a hearing, it can replace rates found unfair, imprudent, insufficient, discriminatory, or unlawfully preferential. When it finds an existing or proposed rate imprudent or unlawful, it must set a fair, reasonable replacement. It considers revenue needs, past and expected investment returns, or the balance between operating costs and revenue. The Commission must prioritize faster rate hearings and decisions. Rate-change orders take effect at least 30 days after delivery unless the utility agrees in writing to an earlier date.

New cost rules for water bills

Beginning January 1, 2026, Delaware water utilities get full recovery of reasonable, prudent construction costs through customer rates. Eligible facilities serve current customers or customers reasonably expected within three years after the Commission recognizes the investment. The Commission must treat these facilities as in use, without counting revenue from customers not yet added. This rule excludes utilities under the specified state service-adequacy review or Commission rate review tied to service quality. Growth forecasts must be non-arbitrary and come from professional engineers, planners, government or regulatory officials, or the utility itself. Adding at least 75% of originally expected customers within three years prevents the Commission from counting missing customer revenue. Below 75%, the Commission may count that revenue only for the shortfall from the original forecast, limiting customer charges.

Sponsors & Cosponsors

Sponsor

Stephanie L. Hansen
Democratic • Senate

Cosponsors

Eric Buckson
Republican • Senate
Frank Burns
Democratic • House
William Bush
Democratic • House
William J. Carson
Democratic • House
Mara Gorman
Democratic • House
Krista Griffith
Democratic • House
Kerri Evelyn Harris
Democratic • House
Debra Heffernan
Democratic • House
Gerald W. Hocker
Republican • Senate
Kyra L. Hoffner
Democratic • Senate
Russell Huxtable
Democratic • Senate
Kimberly Williams
Democratic • House
Larry Lambert
Democratic • House
S. Elizabeth Lockman
Democratic • Senate
Spiros Mantzavinos
Democratic • Senate
Eric Morrison
Democratic • House
DeShanna U Neal
Democratic • House
Brian Pettyjohn
Republican • Senate
Sophie Phillips
Democratic • House
Marie Pinkney
Democratic • Senate
Ray Seigfried
Democratic • Senate
Claire Snyder-Hall
Democratic • House
David P. Sokola
Democratic • Senate
Laura V. Sturgeon
Democratic • Senate
Bryan Townsend
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 58 • No: 0

House vote • 6/26/2025

Passed (SM required)

Yes: 39 • No: 0

Senate vote • 3/20/2025