Some power bills to rise

November 21, 2002|by JULIE E. GREENE

HAGERSTOWN - City of Hagerstown and Williamsport electricity customers can expect a rate increase due to the cities' new electric supply contracts, but Allegheny Energy Supply customers won't see a rate increase as a result of the utility losing the contracts.

Allegheny Energy Supply lost the chance to renew a contract with the city after City Council members voted unanimously Tuesday night to approve a three-year contract with Dominion Energy Marketing Inc., of Richmond, Va.

While the purchase power contract price increased 30 percent, Hagerstown Light Department Manager Terry Weaver said the rates for the city's customers won't increase 30 percent because the bill takes into account more than just the purchase power price.


Weaver said it was too soon to say how much the rate would increase for the city's 17,000 customers. Light Department officials must work out related issues before they can set the new rate.

The current rate for the average customer who uses 700 kilowatt hours per month is $36.58, Weaver said. Of that amount, approximately $21 is attributable to the purchase power agreement with Allegheny Energy that expires June 30, 2003, he said.

Not all city residents are city electric customers. Some residents are direct Allegheny Energy customers.

Williamsport customers also can expect a rate increase, but town officials don't know how much it will be yet, said Town Clerk and Treasurer Bonnie Errico.

Town officials were guessing the rate increase could be around 20 percent to 25 percent, but don't know for sure, Errico said. She did not know how much the average town customer pays per month.

Rates for Allegheny Energy Supply customers won't be affected because the utility didn't get the contract, spokeswoman Janice Lantz said. Under deregulation, rates for Maryland residential customers are capped until 2008, she said.

The average Allegheny Energy customer in Maryland pays $70.10 a month for 1,000 kwh, Lantz said.

Under the contract with Dominion, the city will pay 4.43 cents per kwh compared with the 3.2 cents per kwh the city now pays under the Allegheny Energy contract, Weaver has said.

Before the current five-year contract, the city paid Allegheny 4.1 cents per kwh, Weaver said.

"It boils down to our customers have had a real nice ride on a really good rate," Weaver said.

When the city negotiated the last contract the market was at rock bottom, Weaver said.

Now the market price is higher because of the uncertain economy and the threat of war, Weaver said. That threat has pushed gas futures up, which affects electricity prices since much electricity is generated with gas, he said.

"The rate that we got is a very good rate for the state of the market as it is today," Weaver said.

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