Delaware Regulators Review Utility Return on Equity
The state is investigating utility profit models, a shift that could lower electricity rates for Delaware businesses.
Updated on Oct. 21, 2026 in Utilities
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The Delaware Division of the Public Advocate has petitioned the Public Service Commission to review utility return on equity models in an effort to curb rising costs. The move seeks to potentially lower energy expenses for state residents by shifting how utilities calculate profits on infrastructure investments.
Why it matters
Return on equity currently accounts for over 10% of typical electric bills in Delaware, making it a primary target for cost-control efforts. By challenging the existing profit-taking framework, regulators aim to address affordability pressures for consumers and businesses alike.
Return on equity accounts for more than 10% of a typical customer electric bill in Delaware, matching the nearly 10% set return currently granted to Delmarva Power. The regulatory review process is now underway to determine if these profit levels remain appropriate.
The players
Delaware Division of the Public Advocate
The state agency responsible for representing the interests of utility consumers in regulatory proceedings.
Delaware Public Service Commission
The state regulatory body that oversees utility rates, service standards, and infrastructure investment policies.
Delmarva Power
The primary electric utility provider operating in the region with an existing state-set return on equity.
Governor Meyer
The chief executive of Delaware who initiated the push to review utility profit models.
The details
Utilities currently earn a return on equity based on the capital portion of their infrastructure investments, a practice the petition argues should move toward a more competitive mechanism. The Public Service Commission must now evaluate whether current profit structures remain justified or if modifications are necessary to protect ratepayers from excessive costs.
Timeline
June 2026: Governor Meyer called for the investigation into utility profit models.
October 21, 2026: The Division of the Public Advocate filed the formal petition.
December 2026: The six-month window for initial Commission action expires.
Market Landscape
This petition challenges the traditional utility return on equity rate-setting framework used to govern infrastructure investment profits. The move signals a broader shift toward tighter scrutiny of utility margins compared to past regulatory trends.
Business owners should monitor this case as a potential turning point for electricity rate volatility and long-term operating costs. Consult with your energy procurement team or professional counsel to understand how a shift to a competitive profit model could impact your future utility bills.
The takeaway
The petition highlights an administrative focus on capping utility profit-taking as a lever to manage state energy costs. Operators should track the Commission proceedings in December for potential changes to how infrastructure investments are recovered through customer rates.
What happens next
The Delaware Public Service Commission is expected to take action on the petition by December 2026.
Further reading
Learn more about local regulatory shifts in our Delaware Utilities section.
Source note: This article includes information reported by State of Delaware News.
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