Delmarva Power, Chesapeake Utilities file Gas Rate Hikes, Raising Bills for Customers

The rates reflect Delmarva Power's and Chesapeake's cost of purchasing natural gas and related costs, which are passed through to customers

Dover, DE - On August 28, 2025, and on September 2, 2025, Delmarva Power & Light ("Delmarva") and Chesapeake Utilities Corporation ("Chesapeake") filed, respectively, with the Delaware Public Service Commission ("Commission") applications to increase rates to recover natural gas supply costs. Delmarva filed to increase its "gas cost rate" ("GCR") by approximately 43% while Chesapeake filed to increase its annual "gas sales service rate" ("GSR") by approximately 30% for most rate classes.

Delmarva estimates that customers will see an overall increase of $11.33 per month or 13%, since the GCR is only one component of a customer's bill. Chesapeake estimates that customer bills will increase by $16.51 per month or 18.6% for a typical customer since the GSR is only one component of a customer's bill. Both Delmarva and Chesapeake requested that the respective rates become effective on November 1, 2025, subject to a final order by the Commission.

"This is a dramatic increase that will make utility bills more expensive for both Delmarva and Chesapeake customers," said Jameson Tweedie, Delaware Public Advocate. "My office will carefully review both corporations' applications to ensure customers are not overcharged, but because the GCR and GSR are pass through costs, there is limited ability to challenge these increases."

Both the GCR and the GSR allow Delmarva and Chesapeake to pass through the costs of buying natural gas to its gas customers. Specifically, the GCR and GSR are the rates that Delmarva and Chesapeake charge its customers to recover their natural gas supply costs each year, measured on a twelve-month period from November 1^st through October 31^st. Through the GCR and GSR, Delmarva and Chesapeake recover their costs for natural gas purchases, transportation, demand, storage, capacity charges, and hedging costs. Delmarva and Chesapeake do not earn a return on these costs. Refunds, if any, received by Delmarva and Chesapeake from its suppliers are credited against the GCR and GSR.

Every year, Delmarva and Chesapeake are required to make a filing of their estimated GCR and GSR costs. Both corporations are entitled to reconcile over-or-under-recoveries from the preceding year in the new GCR and GSR.

Delmarva serves approximately 140,000 natural gas customers in New Castle County. Chesapeake serves approximately 77,000 natural gas customers in Delaware.

The GCR is separate from Delmarva's gas base rates, but both the GCR and gas base rates contribute to the total bill paid by customers. In September 2024, Delmarva also filed a request seeking an increase of $42.0 million in base rates, which Delmarva estimated would increase the monthly bill of a typical residential customer using 33 ccf per month by $13.06 or 23.2%. DPA opposes Delmarva's request, which is still pending before the Commission.

The GSR is separate from Chesapeake's gas base rates, but both the GSR and gas base rates contribute to the total bill paid by customers. In August 2024, Chesapeake also filed a request seeking an increase of $12.1 million in base rates. DPA opposed this rate increase, and Chesapeake's gas base rate increase request was resolved via a settlement, approved by the Commission in June 2025, allowing an increase of only $6.1 million (approximately $6 million less than Chesapeake's original request).