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Delaware Adopts Retail-Choice Legislation

Delaware Adopts Retail-Choice Legislation

The Delaware General Assembly passed legislation last week that will bring retail choice to the majority of the state's electricity customers by October 2000 and to all of its power customers by April 2001. The bill is expected to be signed into law by Gov. Thomas R. Carper next week.

Under the "Electric Utility Restructuring Act of 1999," residential customers and small-medium commercial and industrial users of Conectiv - the state's largest utility - and Delaware Electric Cooperative (DEC) will be able to choose their own suppliers in 18 months and 24 months, respectively, after the legislation is enacted. The kick-off date for this class of Conectiv customers would be Oct. 1, 2000, while the starting date for DEC customers would be April 1, 2001.

Larger commercial and industrial customers of Conectiv and DEC would be eligible for retail choice a year earlier - Oct. 1, 1999 and April 1, 2000, respectively. Establishments such as office complexes and other medium-to-large commercial and industrial users of Conectiv and DEC would be eligible Jan. 15, 2000 and July 1, 2000, respectively.

The measure also would give Conectiv's residential users a 7.5% rate cut beginning Oct. 1999, which would be frozen for a four-year period. Other Conectiv customers would get a three-year rate freeze effective the same date. Rates for DEC customers are expected to be cut by about 4% effective May 1, 1999, pending approval of the Delaware Public Service Commission, and then frozen for a five-year period starting April 1, 2000.

With this legislation, Delaware joins other states in the region, such as Pennsylvania, Virginia and New Jersey, that have either begun implementing customer choice or have already passed restructuring laws. Delaware has been "basically surrounded" by states moving towards retail choice, said Conectiv spokesman Ted Caddell. This bill will enable the state to stay at the "forefront of regional competition" in the electricity market, noted Conectiv Chairman and CEO Howard E. Cosgrove.

Conectiv, which was formed last year by a merger of Delmarva Power &amp Light and Atlantic Energy, serves 350,000 electric customers in Delaware, while DEC provides service to about 56,000 users. There are nine municipal providers in the state, but they will not be subject to the deadlines for choice outlined in the legislation.

Susan Parker

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