HB 228 Summary

• Amends Section 307(a) of Title 26, Delaware Code to require public utilities to prove rates are just and reasonable and allow recovery of only prudently incurred costs or expenses.

• Defines prudence standard as objective reasonableness of costs based on what the utility knew or reasonably should have known when costs were incurred.

• Allows the Public Service Commission to determine costs are only partially prudent and adjust rate base, operating expenses, or fuel costs accordingly.

• Amends Section 302 to allow water utilities to fully recover prudently incurred costs for constructing facilities to serve existing customers or persons reasonably anticipated to become customers within 3 years, unless the utility is under service adequacy or rate quality review.

• Removes "good faith business judgment" language and replaces it with "prudently" standard for water utility cost recovery in rate proceedings.