Light Department head says customers won't see change

June 18, 2003|by SCOTT BUTKI

The Hagerstown Light Department's 17,149 customers should not see any change in their electricity on July 1, the first day in 31 years that Allegheny Energy Supply will not be the city's wholesale supplier, Light Director Mike Spiker said Monday.

"The consumers of the City of Hagerstown will see absolutely no switch," he said.

In November 2002, the Hagerstown City Council approved a three-year contract making Dominion Energy Marketing Inc., of Richmond, Va., its new supplier. The Hagerstown Light Department purchases electricity wholesale and distributes it to its customers.

The change is effective July 1, the first day of the next fiscal year.

Allegheny Energy Supply is the energy trading subsidiary of Allegheny Energy, a company with headquarters along Downsville Pike.

The City of Hagerstown has contracted with Allegheny Energy for electricity since 1972, when the city closed its electric power plant, Mayor William Breichner has said.


There will be no dramatic moment on June 30 or July 1, Spiker said. The switch will consist of a billing and administrative change as Dominion, instead of Allegheny Energy, bills the city, he said.

City officials have said one reason they chose Dominion to be its energy supplier is that Allegheny Energy said it could not agree to a city requirement to put up a performance bond.

A performance bond is a letter of credit from a financial institution stating the company promises to pay a set amount if it cannot provide electricity to the city under the agreement's terms.

Dominion Energy also offered a lower price, officials have said.

In March, Hagerstown residents received an 18 percent increase in electric rates and commercial users faced an increase of about 17 percent.

The rates rose because the city faced a 38.8 percent increase in bulk power costs from Dominion Energy Management Inc. on July 1.

The cost of power purchased by the city will increase from about $11.4 million in fiscal year 2002-03 to about $14.6 million in fiscal year 2003-04, according to city documents.

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