Addressing Delaware’s Energy Costs: A Call for Common Sense Solutions

By: Jane Brady, Chair, A Better Delaware

Sometimes, when you are looking for a reason for your woes, you should look in the mirror.

That is the advice the General Assembly should take to heart.  Recently, there has been a lot of citizen anger, so there has been a lot of political concern about the cost of electricity.  As a result, politicians are trying to “do something about it.”  Several pieces of legislation have been introduced to address the issue, and hearings have been held.  Their efforts, not entirely, but for the most part, have been misguided.

First, legislators are calling for more scrutiny of the energy providers spending priorities and pricing, but not of the impact of policy decisions that affect both pricing and availability. They are proposing to put a limit on capital expenses by power companies (read bringing new and better technology online) but have not looked at the impact of their legislation on the cost of acquiring energy from out of state, rather than generating it within our own boundaries.

Why are prices up? There are several causes. One is the weather. Like it or not, the records show that the demand for power in January 2025 was levels not seen for 25 years. More usage equals higher prices.  But that was an episodic event, and there are other impacts built into our state energy policies that have even greater effect.

Most significantly, the decision to eliminate sources of energy before they are able to be replaced has an impact.  Delaware already imports more energy than it generates.   But we have taken the Indian River power plant offline (shut it down) before we have developed the capacity to replace the energy it was providing. Significant, regional shortfalls are expected over the next 10 years and are expected to increase.  Legislative policies requiring energy from renewable sources (wind, solar), in ever-increasing percentages of total energy provided by the electric companies, are going to create increased prices because renewable energy generation is not keeping pace with previous levels of energy generation prior to the retirement of sources like Indian River power plant.
We are giving up supply before we replace it.

Delaware is not alone in this regard. Many of our surrounding states are adopting the same, short-sighted policies without regard to how consumers are affected.   It only takes a little common sense to be able to understand that the less energy, the higher the cost.

Not only are we giving up sources of power before other resources become available, but we are also choosing power generation sources that are extremely more expensive and less reliable.

Although immediate costs of both onshore and offshore wind have decreased in recent estimated projects, that is because the turbines being built are larger, and farther offshore. But, as an article in the Harvard Business Review acknowledged, “the most significant cost escalation is likely to occur in decommissioning… involving the disassembly of turbines, removal of foundations and cables…” Historically, these costs and their impact on consumers have been given little attention, but as turbines age, the costs of turbine maintenances increase, and the full cost of decommissioning is identified, regulators and providers will be required to address the issue.

Legislation is also being considered that would make it easier for regulators to disallow costs requested by power companies in a rate case.  Already highly regulated, this would impose a political consideration into a business decision – a practice of which we at A Better Delaware have been consistently critical.

Delaware has access to resources to help consumers who cannot afford the increased prices pay for power. That money is part of a cap-and-trade program for energy efficiency and consumer benefits.        It is not an insignificant sum. It has been reported that in 2019, the Delaware Department of Natural Resources received $217 million from the program.  Now, some legislators have proposed that the money in that program be returned to low-income families who are struggling to meet their energy bills.

Finally, some legislators have expressed interest in changing the mandates, passed several years ago, that set increasingly strict mandates for the percentage of power that must come from renewable resources.  In that same, prior law, a cost cap protection that would have prevented excessive rate hikes was repealed, a subtle acknowledgement that the costs of renewables is greater than the cost of then-existing energy sources. Whether those steps will be taken remains to be seen.

We need to protect access to affordable energy sources until cost effective alternatives are available and allow the power companies to make decisions that will maximize their ability to meet consumer demand in a cost-effective and responsible manner. Our current policies do not allow for either. If the General Assembly wants to respond to citizens’ concerns with common sense solutions, they need to look in the mirror, identify the problem, and work to correct our policies and laws to the benefit of Delawareans.

Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.