MILFORD — The City of Milford, a community electric utility powered by the Delaware Municipal Electric Corporation, will be implementing a $0.00396 per kilowatt-hour power cost adjustment beginning in February.

The power cost adjustment is a required pass-through of DEMEC’s wholesale power cost increase billed to all member cities effective Jan. 1 through the end of 2022. DEMEC’s power cost increase is primarily due to the global increase in natural gas prices. The $0.00396 increase will result in a 3.1% increase in electric bills for average households and small business accounts in Milford.

The PCA increase is the first required in more than nine years. The city’s electric rate structure is unchanged; only the PCA component is triggered by the upcoming power cost increase.

In recent years, a negative PCA has led to customers receiving credits on utility bills and, in June 2021, City Council approved the use of those credits to expand the city’s Efficiency Smart program and green energy fund. Even with the upcoming PCA, residential electric rates in Milford have decreased 8% over the last five fiscal years.

“Natural gas spiked almost 200% in the past few months. DEMEC and the City of Milford have been planning effectively for adverse market events like this, so the average impact is only 3.1%,” Finance Director Lou Vitola said.

The natural gas market is impacting the city’s electric rates because Milford’s power supply is driven by almost 71% natural gas-fired generation. Since 2008, DEMEC has worked with Milford and its member communities to diversify its power supply portfolio with a commitment to carbon reduction.

According to DEMEC’s 2020 Annual Report, “Currently, over 85 percent of DEMEC’s power supply comes from extremely low to no carbon emission resources.”

To help offset the increase, the city encourages customers to utilize Efficiency Smart (efficiencysmart.org/milford-delaware) for rebates and an electric usage monitor, insulate windows, purchase a water heater jacket, utilize the city’s budget plan and service their HVAC system.

Questions regarding utility billing or the upcoming PCA can be directed to the city’s Customer Service Department at 302-422-6616.