Senate passes cap on Delmarva capital spending and narrows utility cost recoveries; prudence standard debated

The Delaware State Senate on March 20 passed legislation that restricts what regulated utilities can pass on to customers and caps Delmarva Power’s annual capital expense recovery for a limited period.

Senators approved Senate Bill 60 as amended, which (1) bars recovery from ratepayers of certain indirect costs such as lobbying, political contributions and specified advertising and public relations activities (with a narrow exception for technical membership dues not used for lobbying), and (2) creates a $125,000,000 per-year cap on Delmarva Power’s capital expenditures recoverable from ratepayers for 2026 through 2028, subject to emergency exceptions and prior authorization rules.

The measure follows an extended floor discussion that began with Senate Bill 59, a companion bill that would change the legal standard the Public Service Commission uses to review utility expense recovery from Delaware’s current business-judgment rule to the prudence standard used in most other states. Senator Hansen, the sponsor, framed the two bills as complementary: “Senate bill 60 and senate bill 59 that we just did are really bookends of the same process,” she said, adding that SB59 would require expenses to be reviewed for whether they were “prudently incurred.”

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