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City may change energy supplier

August 30, 2002|by SCOTT BUTKI

scottb@herald-mail.com

A consortium of four municipalities, including Hagerstown and Williamsport, are considering switching energy suppliers next year, Hagerstown Mayor William M. Breichner said Thursday.

The City of Hagerstown has been contracting with Allegheny Energy to provide electricity since 1972, when the city closed its electric power plant, Breichner said. The Hagerstown Light Department purchases electricity wholesale and distributes it to customers.

Due to deregulation, the city considered switching electricity suppliers in 1998 but decided to continue with Allegheny Energy, which offered the lowest rates, Breichner said.

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The consortium, which has existed for about 15 years, is made up of Hagers-town, Williamsport, Thurmont, Md. and Front Royal, Va., Breichner said. All four members have separate contracts with Allegheny Energy but negotiate together, which keeps costs down, he said.

A five-year contract between the four municipalities and Allegheny Energy expires June 30, 2003.

Allegheny Energy may want to charge the consortium members higher rates when it renegotiates the contracts, Breichner said.

The consortium is exploring whether other companies might sell electricity to the municipalities at lower rates than Allegheny Energy might offer, he said. Companies interesting in selling electricity to the members have been asked to submit proposals, he said.

It could turn out that getting a cheaper proposal won't be possible because if the city contracts with a company other than Allegheny Energy, that company would have to rent power lines from Allegheny Energy to deliver the electricity, Breichner said.

Meanwhile, the city has withdrawn a rate hike request that had been submitted to the Maryland Public Service Commission, Breichner said.

Under a proposal endorsed by the Hagerstown City Council in May, the rates of heavy-use industrial customers would have increased by almost 10.8 percent.

The city also was proposing raising electric rates for light industrial customers by 6 percent. The rates for commercial customers would have increased by 3 percent.

The electric rates for residential customers would not have changed under the proposal.

The city withdrew its proposal because it was based on data for calendar year 2001 and the city wants it to be based instead on more current numbers, Light Department Manager Terry Weaver said.

The city might submit a new request to the Maryland Public Service Commission later this year, possibly with revised rate increases, but that has not been decided, Weaver said.

Breichner said he wasn't sure it makes sense to seek a rate increase this year if the city might have to ask for an additional rate increase under a new contract next year.

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