Recently I was privileged to sit in on a financial review session for a business here in Delaware.  Here is how the conversation went.

Q:  Your “utilities” are out the roof.  What the hell are you doing?

A:  Our rates increased 60% last May when Delmarva Power was deregulated.

Q:  Bullshit.  Why didn’t the other Delaware units show the same increase.

A: Both of them receive power through municipal coops.  Those rates were settled by separate deals.  We deal with Delmarva directly, and have no buffer.

Q: That’s crap.  You are spending and not controlling energy costs.  This summer, your costs are almost 40% higher than than anyone else in the company.  We paid you to control this!

A. We have. Here is the proof.  These are the bills from other stores. Here is ours.  We use less kilowatt hours over each month than those other units.  We have stretched our efficiency to  as close to the theoretical, as is possible.  You can see our price is higher, much higher, we have no control over that. But even though we use less energy than any other unit, we have to pay what we have to pay.

Q:  Well if that’s the case then you need to find another $5,000 a month from somewhere else, to make up for pissing away good money.

A:  The only option I have left is to NOT pay Delmarva the amount they ask, in other words, short the bill  That option buys only 4 months until they shut us down. And then you will have to take the entire hit at one time.  I say “you”, because if that is the move you ask me to make, then I won’t be here.

Q:  You are damn right you won’t.

A:  Be forewarned, it will cost you three times as much to find a replacement willing to deal with this kind of  bullshit…….”

With that, the financial review was over.

This microcosm is currently taking place throughout every chain unit that pays Delmarva directly.  There are two takeaways that come out of these experiences.

Businesses:  if you are thinking of moving into Delaware……..don’t.  You can’t afford it.  Do not be misled by our state’s economic office.  Look at the rates and do the math and see how much of your margin you give up!  There are better places to invest than here in Delaware.

Others:  You need to get off your asses and get this wind farm started now.  The only way Delaware can remain competitive with any state, is to build the 600MW wind farm and use that 2.3 cent kilowatt hour to drive our energy prices down.

Even the tiniest amount of foot-dragging, will push this state over the edge.

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