Some Williamsport residents face electricity price increase

March 13, 2002|BY ANDREA ROWLAND

About 850 electric customers in Williamsport will soon pay more for electricity as a result of a federal order aimed at streamlining the management of electrical transmission systems.

The Federal Energy Regulatory Commission's order is indirectly linked to the complex issue of state-directed electric deregulation, FERC Spokeswoman Barbara Connors said Tuesday.

It's been theorized that deregulation will result in more choice and lower costs for electric customers.

Wholesale electric consumers nationwide are buying electricity over greater distances, Connors said. Requiring energy providers to join regional electricity transmission organizations that oversee the flow of power across high-voltage wires will create a more efficient system, ultimately giving bulk power consumers easier access to more energy providers in what's expected to be an increasingly competitive market, Connors said.

The Williamsport Town Council on Monday night grudgingly approved spending $6,500 to join PJM West, the regional electricity transmission organization that Allegheny Energy has chosen to handle its transmission operation.

Williamsport has to sign on with PJM because the town is under contract with Allegheny through June 2003, Town Councilman James McCleaf said Monday.

"We don't have a choice," said Town Clerk Donna K. Spickler.

FERC in 2000 ordered Allegheny Energy and other utilities to simplify the management of their transmission systems by joining regional companies that handle day-to-day transmissions operations, Allegheny Energy spokesman Allen Staggers said Tuesday.

Allegheny Energy chose PJM Interconnection - of which PJM West is a branch - in part because Allegheny's service area borders PJM's service area and because PJM is an established company in a sea of start-up regional transmission organizations, Staggers said.

"It was the best option for Allegheny to join PJM Interconnection," he said.

Williamsport does not have a choice about its transmission provider because Allegheny Energy owns the power lines that feed energy to Williamsport, and PJM will manage those lines, Staggers said.

PJM charges a $1,500 application fee and a $5,000 annual membership fee, McCleaf said. And under PJM, Williamsport's electricity costs will increase by about $3,000 a year, he said.

Those costs will be funneled to Williamsport's electric customers, who will start in June paying about $40 more each year for electricity, McCleaf said.

The electricity rate quoted to Williamsport officials could change after FERC approves the final rate later this year, Staggers said.

Williamsport must sign on with PJM by April 1, McCleaf said, and the regional provider has refused to pro-rate the membership fee.

"We've been backed into a corner. I don't like it," said Assistant Mayor Walter W. Tracy Jr., who voted against the measure. "Why are we required to become a customer of PJM and pay higher rates? That's not deregulation."

Staggers said FERC's "Order 2000" was not done in the name of deregulation.

Four other Town Council members voted in favor of entering into the agreement with PJM after a discussion in which they learned they had no choice. Councilman Tim Ammons abstained from voting because he works for Allegheny Energy as an operator at the Williamsport-based power station.

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