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Council OKs electric rate hikes for commercial users

May 15, 2002|BY DAN KULIN /Staff Writer

dank@herald-mail.com

Electric rates for Hagerstown Light Department commercial and industrial customers would increase under a proposal endorsed Tuesday by the City Council.

Heavy-use industrial customers would have their rates increase by almost 10.8 percent, Light Department Manager Terry Weaver said. In 1996, those customers had their electric rates cut by 9.9 percent, he said.

The city is also proposing raising electric rates for light industrial customers by 6 percent. The rates for commercial customers would increase 3 percent, Weaver said.

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The electric rates for residential customers would not be changed, he said.

The requested rate changes will now go to the state Public Service Commission, which must approve any rate changes, he said.

The proposed rate changes are the result of a review of city Light Department charges. Weaver has said the city typically does such a review of rates every five years.

During the Tuesday council meeting, Al Clark, the city's rate consultant, told the Mayor and council that without the proposed rate changes, the Light Department could end up with a $525,000 operating deficit.

Jan Lower, an attorney hired to assist with the rate review, said the problem is that the city's commercial and industrial customers cost more to serve than they pay for the service.

Weaver said the rate increases would be needed even if the Light Department had not been giving $400,000 a year to the city Community Betterment Fund, which is used to pay for items including debt payments on the ice rink.

The proposed rate increases are needed to balance operational costs with income, he said.

"It has nothing to do with the Community Betterment (Fund)," he said.

Weaver said the money transferred from the Light Fund to the Betterment Fund is similar to a private company paying a dividend to its stockholders.

City Light purchases electricity wholesale from Allegheny Energy and distributes it to customers. City Light customers are all within the city's 1947 boundary.

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