Delaware and Direct Energy

Direct Energy has recently announced it has been formally named “the exclusive electric retail supplier contracted by the State of Delaware.”  This marks the first time such a designation has ever been offered and agreed upon within the United States.

Starting this past month, the offering from Direct Energy is the first of its kind, providing consumers with lengthier fixed term energy rates in addition to several benefits for both small businesses and residents of the state. It also means that for two years, Direct Energy is the only supplier in Delaware that can provide these special offers.

Electricity in the State of Delaware

Delaware is state with a deregulated electricity market. This means that as a resident or business owner, you have the option to choose or select your electricity retail supplier. When it comes to the delivery of electricity, the state offers consumers the choice between two major utilities, Delmarva Power and Delaware Electric Cooperative.

As for the supply of electricity, Delaware has over 50 suppliers, each certified by the Public Service Commission for both residential and small businesses. Electricity retail suppliers were introduced into the market to prevent utilities from raising electricity rates and limiting competition. With over 50 suppliers to choose from, these retail suppliers need to ensure that they offer the best rates, services and products in order to gain and retain their customers.

What this new designation means for electricity in Delaware is even more flexibility and fair rates for consumers. For example, working with Delmarva Power and Delaware Electric Cooperative, Direct Energy now gives almost 400,000 residential and business consumers another competitive option or tool to help them choose an electricity retail supplier.

The Selection Process

The State Legislature was actively looking for longer term contracts with their suppliers, to help consumers save money on this particular utility. Section 68 of Senate Substitute No. 1 for Senate Bill 160 of the 148th General Assembly, formed the Electricity Affordability Committee. The Committee was then given the task of evaluating all electricity retail supplier applicants in order to determine the supplier that would receive the contract.

The program’s final decision was made by vote by the Delaware Electricity Affordability Committee, with support and representation form the Department of Natural Resources and Environment, Office of Management and Budget, Office of the Controller General, Office of the Public Advocate and Public Service Commission.

Direct Energy, one of the 6 suppliers participating in the selection process, won the vote (last month). All proposals were evaluated and ranked on several criteria including the potential benefits from:

  • Multi-year fixed price per kWh hour offers
  • Consumer benefits
  • Technical and fiscal experience of the supplier
  • Value added products and services
  • Customer invoice management

Direct Energy & Delaware Agreement Details

The agreement made between the state of Delaware and Direct Energy includes several details that have an impact on energy consumers. These details include:

  • No “switching” or early cancellation fee on commodity products.
  • Customers can switch back to their original utility or select a different, more competitive electric retail supplier.
  • Utilities remain the deliverer of electricity.
  • Utilities remain responsible for providing emergency service and response to power outages.

Small businesses will see an increase in benefits based on this new agreement. For example, these types of customers will potentially save 10% – 12% on heating and 15% on cooling because Direct Energy will provide a free Nest Learning Thermostat as part of their packaged plans and services. In addition, Direct Energy is providing a special offer to consumers signed up with Direct Energy Business. These customers will receive a low fixed electricity rate that is 5% lower than Delmarva Power (a local utility company) for 24 months. This offer comes without any exit or enrollment fees as well as a free Nest Learning Thermostat.

Please note that both customers of utilities, Delmarva Power and Delaware Electric Cooperative still have the ability to select a supplier from any of the current certified state Public Service Commission suppliers currently making offers – in addition to Direct Energy. Consumers also have the option to receive the standard supply rate by remaining with their utility.