Capital Program Planning for Delaware Gas Utilities

by | Oct 21, 2026

Delaware · Natural Gas Utilities

Delaware's gas system is small, but every capital dollar has to work harder.

Two investor-owned LDCs serve about 218,000 customers across a compact state — replacing aging main, recovering the cost through the DSIC, and planning under a net-zero-by-2050 mandate that reshapes long-horizon throughput. When a rate case lands, a program accelerates, or a decarbonization target moves, the project list has to move with it. Invizion helps gas utilities re-sequence a capital portfolio in a click — and defend every decision.

See how Invizion helps utilities See what Delaware utilities face Download the briefing (PDF)
The bottom line: Delaware's natural gas market is small — about 218,000 customers across two investor-owned LDCs and no municipal gas — but aging main, a net-zero-by-2050 mandate, and surcharge-based recovery mean the utilities that win are the ones whose capital plans can re-sequence as fast as the rules change.
~218K1
Natural gas customers served statewide (2024) — about 203,000 residential plus commercial and industrial.1
129,0002
Delmarva Power natural gas customers in northern Delaware (New Castle County).2
$6.4M3
Delmarva Power's existing annual DSIC revenue for infrastructure replacement, rolled into its 2024 rate filing.3
$2.2B+4
Chesapeake Utilities' 2024–2028 capital plan across its footprint, funding Delaware system growth and modernization.4

The Delaware Landscape

Four forces are moving your project list at once

Delaware's gas sector is modest, but the pressures on it are the same as everywhere else — aging pipe, decarbonization, price volatility, and the need to recover it all without breaking affordability. Each one reshuffles the projects on your list.

Integrity — Aging Pipe & Safety

Replace the old main — on a regulator's clock

PHMSA's distribution integrity rules require operators to identify and reduce risk on aging distribution main, and the legacy of cast-iron and unprotected bare-steel pipe still drives replacement work across the mid-Atlantic.5

In Delaware, both Delmarva Power and Chesapeake Utilities recover accelerated main-replacement spend through the state's Distribution System Improvement Charge (DSIC) — Delmarva alone carries about $6.4 million in annual DSIC revenue. Every mile deferred is a mile that ages, and every mile accelerated competes for the same capital.3

Decarbonization — The Long Horizon

Net-zero by 2050 reshapes the throughput curve

Delaware's climate policy targets net-zero greenhouse-gas emissions by 2050, putting building electrification and long-run gas demand squarely on the table for any 20- to 30-year capital plan.6

Residential gas throughput was about 11,058 million cubic feet in 2024 — a market that is efficiency-flat, not growing, even as replacement obligations stay fixed. That is the stranded-asset arithmetic: spread rising fixed costs over volumes that may not rise with them.7

Supply — Price & Reliability

Winter peaks and a volatile commodity

Delaware's residential gas price reached about $15.97 per thousand cubic feet in 2025, up from $14.78 in 2024 — a reminder that the commodity line on the bill swings with interstate market and winter-peaking conditions the state does not control.8

Residential and commercial customers together take the bulk of design-day demand, and 78,021 million cubic feet moved through the system in 2024 — reliability on the coldest days depends on capacity and delivery decisions made years in advance.7

Capital — Recovery & Rate Cases

Recovering the spend without breaking the bill

Delmarva Power filed a roughly $42.0 million base-rate request in 2024 (Docket 24-1044), while Chesapeake Utilities' first base-rate increase in nine years settled at about $6.1 million in June 2025.39

Chesapeake's five-year capital plan across its footprint now exceeds $2.2 billion, and the DSIC lets both utilities recover replacement spend between cases — but every increase lands on the same customer bill, and the affordability tension is real.4

Who Delivers Delaware's Gas

Two investor-owned LDCs — and no municipal gas at all

Delaware's regulated natural gas market is unusually simple: two PSC-regulated investor-owned utilities serve the entire state, and there are no municipal or cooperative gas systems. Outside the mains, propane and heating oil carry much of rural Kent and Sussex.

Investor-owned gas LDCs

Rates & capital recovery regulated by the Delaware PSC

Delmarva Power & Light (Exelon) ~129,000 gas customers · New Castle County2
Chesapeake Utilities — Delaware Division Central & southern DE · Dover HQ; part of a 470,000+ distribution system10
Sandpiper Energy (Chesapeake) Propane-to-natural-gas conversion in coastal communities11

Delaware's entire regulated gas market runs through these two investor-owned LDCs — both recover accelerated infrastructure spend through the state's DSIC.3

Municipal, cooperative & delivered fuels

What fills the gaps where mains don't reach

No municipal or cooperative gas systems Delaware public power (Dover, Newark, Lewes) is electric only12
Propane (LPG) Primary heating fuel where distribution mains don't reach rural Kent & Sussex12
Heating oil & electric heat Serve much of southern Delaware's residential heating12

Because there is no municipal gas, the two IOUs carry the full weight of Delaware's decarbonization and modernization decisions.

Rate-Setting & Oversight

Every capital dollar has to be defensible

The Delaware Public Service Commission regulates gas distribution — delivery and administrative costs are set in base-rate proceedings, and the DSIC recovers replacement spend in between.

  • Delaware Public Service Commission (PSC) regulates the distribution of natural gas for Delmarva Power and Chesapeake Utilities, setting delivery rates in base-rate cases and allowing riders for extraordinary costs such as former manufactured-gas-site cleanup.3
  • Distribution System Improvement Charge (DSIC) lets Delaware gas utilities recover eligible infrastructure-replacement investment between rate cases — Delmarva carries roughly $6.4 million in annual DSIC revenue, and Chesapeake folded about $996,660 of DSIC into base rates in its latest case.313
  • Chesapeake Utilities rate case (Docket 24-0906) — its first base-rate increase in nine years settled at about $6.1 million, approved June 18, 2025, raising residential heating rates ~6% (about $5.37/month) with no increase to fixed customer charges.93
  • Delmarva Power rate case (Docket 24-1044) — a roughly $42.0 million base-rate request filed September 2024, incorporating about $6.4 million of existing DSIC revenue into base rates.3

How The Capital Gets Recovered

Surcharge-based recovery does the heavy lifting

Delaware's gas sector is small enough that little dedicated federal money flows to it; the real machinery of capital recovery is the DSIC surcharge and the rate case — which is exactly why sequencing matters.

  • DSIC surcharge recovery — the primary between-cases mechanism: Delmarva at ~$6.4 million annually and Chesapeake at ~$996,660 rolled into base rates.3
  • Chesapeake Utilities 2024–2028 capital plan > $2.2 billion across its multi-state footprint (DE, MD, FL, OH), with 2026 capital guidance of about $550–600 million funding Delaware growth and modernization.4
  • Base-rate settlements — Chesapeake's ~$6.1 million 2025 outcome (with a weather-normalization mechanism for residential and small-commercial customers) and Delmarva's pending ~$42.0 million request recover the balance of investment.93
  • PHMSA NGDISM grants (Natural Gas Distribution Infrastructure Safety & Modernization) are a competitive federal source for main replacement, but Delaware's utilities recover the bulk of modernization through surcharges and rates — making prioritization, not grant-chasing, the decisive lever.5

Where Invizion Fits

Turn Delaware's gas-system decisions into a defensible capital plan

Invizion is scenario-based capital portfolio optimization built for utilities. When a replacement mandate accelerates, throughput forecasts shift, or a decarbonization ruling lands, you don't re-plan by hand for weeks — you model it and decide with a record to stand behind.

1

Model the “what-if” before it's forced on you

A faster main-replacement schedule, a gas-line-extension ban, an RNG mandate — build the scenario and see the impact on the whole portfolio, side by side with today's plan.

2

Re-sequence 500 projects in a click

When priorities move, Invizion re-orders the portfolio automatically — accelerating, stretching, or deferring projects against the constraints you set, not weeks of spreadsheet surgery.

3

Give regulators or your board a defensible record

Every prioritization and trade-off is captured. When you're asked “why this project, why now,” the answer is documented — not reconstructed after the fact.

Delaware's Gas Sector, In Brief

Questions Delaware gas utility leaders are asking

Short, sourced answers — the same facts we dig into with utilities looking at their capital programs.

Which utilities provide natural gas in Delaware?
Two investor-owned LDCs: Delmarva Power (Exelon) serves about 129,000 customers in northern Delaware, and Chesapeake Utilities — with its Sandpiper Energy division — serves central and southern Delaware. Together they serve roughly 218,000 customers statewide.2101
How big is Delaware's natural gas market?
EIA reports about 203,443 residential and roughly 15,000 commercial gas customers in 2024, with 78,021 million cubic feet delivered across all sectors — one of the smaller state gas markets in the country.17
How do Delaware gas utilities recover main-replacement costs?
Chiefly through the Distribution System Improvement Charge (DSIC), which recovers eligible infrastructure-replacement investment between rate cases, plus periodic base-rate cases before the PSC. Delmarva carries about $6.4 million in annual DSIC revenue.3
What recent gas rate cases matter in Delaware?
Chesapeake Utilities' first base-rate increase in nine years settled at about $6.1 million (approved June 2025), and Delmarva Power filed a roughly $42.0 million base-rate request in 2024 (Docket 24-1044).93
What does decarbonization mean for Delaware's gas system?
Delaware targets net-zero greenhouse-gas emissions by 2050, which puts long-run gas throughput and building electrification into every long-horizon plan. With residential volumes already efficiency-flat (~11,058 MMcf in 2024), the challenge is recovering fixed replacement costs over demand that may not grow.67
How does Invizion help Delaware gas utilities plan capital?
Invizion is scenario-based capital portfolio optimization for utilities. It lets you model how an accelerated main-replacement program, a DSIC reset, a rate-case outcome, or a decarbonization target reshuffles your whole project list, re-sequence the portfolio automatically against your constraints, and keep a defensible record of every decision for the PSC.

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About the Author

GB

Guy Barlow

President, Invizion

Guy Barlow leads Invizion, a capital lifecycle management platform for water and wastewater utilities. He has spent two decades at the intersection of utility capital programs, funding, and analytics, helping utilities make faster, more defensible capital decisions.

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This briefing was last reviewed September 2026.

Sources

  1. U.S. Energy Information Administration — Delaware natural gas number of consumers (residential 203,443; commercial 14,815; industrial 161), 2024. www.eia.gov
  2. Delmarva Power (Wikipedia) — provides natural gas to 129,000 customers in northern Delaware; Exelon subsidiary. en.wikipedia.org
  3. Delaware Public Service Commission — Natural Gas Regulation: regulates Chesapeake and Delmarva; Chesapeake Docket 24-0906 ($12.1M request, $996,660 DSIC transfer); Delmarva Docket 24-1044 ($42.0M request, $6.4M existing DSIC). depsc.delaware.gov
  4. Chesapeake Utilities Corporation (via StockTitan) — 2024–2028 capital plan expected to exceed $2.2 billion; 2026 capital guidance ~$550–600 million. www.stocktitan.net
  5. PHMSA — Gas Distribution Annual Report Mileage / distribution integrity requirements (main replacement context). www.phmsa.dot.gov
  6. Delaware DNREC — Climate Change: “Toward Net-Zero Emissions by 2050.” dnrec.delaware.gov
  7. U.S. Energy Information Administration — Delaware natural gas deliveries by sector (residential 11,058 MMcf; total 78,021 MMcf), 2024. www.eia.gov
  8. U.S. Energy Information Administration — Delaware residential natural gas price ($15.97/Mcf in 2025; $14.78 in 2024). www.eia.gov
  9. Delaware PSC — “Chesapeake customers to face first base gas rate hike in 9 years”: ~$6.1M settlement, approved June 18, 2025, ~6% heating / ~$5.37 per month, no fixed-charge increase. depsc.delaware.gov
  10. Chesapeake Utilities — About Us: 470,000+ distribution customers, 165+ years, Dover, Delaware headquarters. www.chpk.com
  11. Chesapeake Utilities (Wikipedia) — Dover, DE headquarters; Chesapeake and Sandpiper Energy distribute natural gas on the Delmarva Peninsula. en.wikipedia.org
  12. U.S. Energy Information Administration — Delaware State Energy Profile (gas market and heating-fuel context). www.eia.gov
  13. Delaware PSC — Regulated Utility Filings / DelaFile docket system (DSIC and rate-case documents). depsc.delaware.gov