The energy choice Delaware residents enjoy today was not always available to consumers in the Diamond State. Just 20 years ago, in fact, Delaware’s energy market was regulated, as much of the country still is today, and consumers were left no choice but to purchase their energy services from the local utility in their region. This utility was then responsible for handling the generation, transmission and distribution of power to its consumers.
The old Delaware electricity market changed forever in the mid-90s. As energy prices skyrocketed across the entire Northeast, several states, including Delaware, New York, New Jersey and Massachusetts, sought ways to curb price inflation. For lawmakers, the goal was not only to create some price stability, but also to maintain the energy services their citizens expected and depended upon. The answer to each of these goals came in the form of deregulation.
Delaware’s General Assembly deregulated the state’s electricity market on March 31, 1999, by passing “The Electric Utility Restructuring Act of 1999” and restructuring the existing electricity industry. The legislation called for a breakup of the utility’s energy monopoly, the deregulation of electricity generation and the entrance of third-party electricity providers. Power distribution services would remain the responsibility of the investor-owned utilities, Delmarva Power and Delaware Tariff, and these utilities would continue to be under the regulatory control of the Delaware Public Service Commission. Prices for the utilities’ electric transmission would be regulated by the Federal Energy Regulatory Commission.
The law took effect and retail competition for the state’s largest customers was phased in October 1, 1999. Shortly thereafter, the state’s medium-sized customers were added to the market January 15, 2000. Finally, residential customers were allowed to take part in the open market beginning Oct. 1, 2000, and all customers were entered into the market by 2001. The legislation also included a rate freeze for all co-op customers and additional funding for public benefits programs. The deregulated market, as it stands today, was taking its first steps.
For residential and commercial consumers, the market change meant they had been awarded a choice. They could continue to do business with their local utility as their default provider, or they could contract with a Certified Electric Supplier and sign a contract based on the price, rate offerings, benefits and promotions that appealed to them. Each of the third-party electric suppliers had been previously certified by the commission in order to do business and sell electricity in the state of Delaware, allowing the state to protect consumers in its newly deregulated industry.
Today, nearly 20 years later, consumers in Delaware are still enjoying energy choice and the power to select the plan that’s right for them. And as consumers make their choices they dictate the future of the market, pushing companies to work harder to earn consumers trust while creating new innovations to attract consumers. Each improvement strengthens the market for its energy customers now and in the years ahead.