City Light customers may receive rate cut

June 20, 1998


Staff Writer

Hagerstown City Light's average residential customers could see a 10 percent drop in their electric bills by the end of the year, Manager Terry Weaver said Friday.

City Council members are expected to approve a new five-year wholesale power contract with Allegheny Power on Tuesday, Weaver said.

The contract calls for rates with the city that are more than 15 percent lower than the current contract with Allegheny Power, which expires on Thursday, he said. The proposed contract would expire on June 30, 2003.

The savings will be passed on to the customers as soon as the city gets approval from the Maryland Public Service Commission to lower rates, Weaver said. That could be this summer, but at the latest on Jan. 1, he said.


For the average residential customer using 700 kilowatt hours a month, the proposed contract would cut the monthly bill $4.66 from $43.74 to $39.08, Weaver said.

Even if the drop occurs in January, the savings to customers will be retroactive to the start of the proposed contract so customers won't lose any savings, said Calvin Timmerman, director of rate research and economics with the Maryland Public Service Commission.

Because the city represents 17,000 municipal customers and shared the contract with the towns of Williamsport, Thurmont, Md., and Front Royal, Va., federal deregulation allows customers to get better rates, said Weaver and Timmerman.

The city alone is an attractive customer, making the residential and business customers look like a giant industrial user, Weaver said.

The city's peak usage is 70 megawatts without the Hagerstown Fiber Operations paper recycling plant and 80 megawatts if the plant reopens, Weaver said. With the other towns, the group's peak is around 120 megawatts.

Williamsport's 850 customers also might see rates drop, said Donna Spickler, the town's clerk and treasurer.

The Town Council is expected to discuss the proposed contract at its July 13 meeting, Spickler said. Until a new contract is approved, the current one with Allegheny Power will be extended, she said.

City officials have been negotiating a new power contract since late 1997, narrowing it down to Allegheny Power and Evantage, the marketing side of Virginia Electric Power Co.

"The one nice thing about this is we're still able to deal with Allegheny Power," Weaver said. Officials on both sides of the negotiating table were able to work through differences they've had in recent years, he said.

Allegheny Power spokeswoman Cindy Shoop said it would be inappropriate to comment on the proposed contract until it is finalized.

Hagerstown is one of Allegheny's top 10 customers, Shoop said. The company's service area includes parts of Maryland, Pennsylvania, West Virginia, Virginia and Ohio.

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