Dave Sokola

Senate Bill No. 59 (Chapter 78, Volume 85 of the Laws of Delaware) was passed by the General Assembly on June 26, 2025, and signed by the Governor on July 16, 2025. Senate Bill No. 59 changed the standard applied by the Public Service Commission ("Commission") when deciding public utility rate cases. The standard applied before the enactment of Senate Bill No. 59 was the “business judgment rule” standard. Senate Bill No. 59 changed the standard applied by the Commission to the “prudence” standard. Forty-eight states in the United States apply the “prudence” standard when setting public utility rates, not the "business judgement rule" standard that has been applied in Delaware. Although Section 3 of Senate Bill No. 59 stated that the Act takes effect on January 1, 2026, following its enactment into law, it was the intent of the General Assembly that the Commission must apply the “prudence" standard retroactively in rate case decisions, where the public utility filed the rate case proceeding with the Commission during the period from the date of enactment of the legislation on July 16, 2025, through December 31, 2025. The “prudence” standard does not apply to any rate case proceeding filed by a public utility with the Commission before July 16, 2025.

AN ACT TO AMEND CHAPTER 78, VOLUME 85 OF THE LAWS OF DELAWARE ENTITLED “AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO PUBLIC UTILITIES AND UTILITY RATES.”