Seaford council keeps PCAC intact to avoid rate swings, votes to carry refund to 2027

The Seaford Mayor and Council voted unanimously Jan. 13 to adopt option 2 for the city’s Power Cost Adjustment Clause, keeping the PCAC unchanged for 2026 and carrying an overcollection of about $540,000 into future billing rather than issuing a full rebate this year.

Chris Simms, who addressed the council as the presenter from Smart Utility Management, told the council the city received a one-time credit in July 2025 (about $283,000) related to a reliability "must-run" requirement and that differences between forecasted and actual wholesale power costs left the city with roughly $540,000 that is eligible for refund through the PCAC. Simms described three choices: (1) reduce the PCAC to 0.01275 to refund the full amount in 2026 (about a 3.4% bill reduction this year but requiring a larger increase in 2027), (1.5) a hybrid that refunds only the DMACC credit (~$283,000) for a ~1.5% reduction, or (2) leave the PCAC unchanged and refund across 2027 to avoid whipsawing customers.

Councilman Mike Bradley said he favored predictability. "I believe in consistency," Bradley said, urging a stable bill for households that budget month to month. Councilman Quillen pressed distinguishing who benefits from a lump-sum rebate, noting higher-usage customers (often commercial or institutional accounts) would receive proportionally larger refunds under an immediate rebate. "The bulk of it's gonna go back to the higher usage people," Quillen said, arguing that a flat approach would be fairer to residential ratepayers.

After discussion and clarification from staff about how the PCAC could be adjusted in future years, Bradley moved to accept the staff recommendation for option 2; Quillen seconded. The council approved the motion by voice vote; the meeting record indicates the motion passed unanimously.

The council also adopted related fee-and-rate schedule revisions tied to the PCAC option; staff said the proposed effective date aligns with the February billing cycle (February billing for January consumption). The city manager and electric staff said all dollars accounted for through the PCAC must be used only for power-supply costs and cannot be repurposed.

Next steps: staff will publish customer-facing messaging explaining why the city chose to maintain rate stability in 2026 and how the overcollection will be handled in 2027 if wholesale costs change.