Chamber forming co-op for electricity leverage

October 13, 2004|by JULIE E. GREENE

The Hagerstown-Washington County Chamber of Commerce is forming a cooperative to help local businesses leverage their buying power to purchase electricity because Allegheny Power's rate caps come off Jan. 1, the Chamber's president said Tuesday.

"You're going to pay more for electricity in the future than you pay now, period," Chamber President Brien Poffenberger said.

The cooperative would help Chamber members manage the cost increase and make informed decisions about choosing a supplier, Poffenberger said.

Maryland deregulated electricity in 2000, but rate caps were in effect in recent years that allowed a competitive supplier market to develop, Maryland Public Service Commission Executive Director Gregory Carmean said.

According to the Public Service Commission's Web site, seven electricity suppliers are actively seeking customers in Allegheny's territory in Maryland.

Allegheny's residential rate caps come off Jan. 1, 2009, but rate caps for business and commercial customers come off Jan. 1, 2005, Allegheny spokesman Guy Fletcher said.

Because Allegheny's electric supply agreement ends at the same time, the utility went through a bidding process to create a new supply agreement. Allegheny has proposed rate increases to take effect Jan. 1, pending Maryland Public Service Commission approval, Fletcher said.

For most Allegheny commercial and industrial customers, the overall proposed rate increase is approximately 18 percent, although the generation portion of the rate averages a 35 percent increase, Fletcher said.

Rate increases range from 2 percent to 59 percent based on the time of year and type of customer, Fletcher said.

Poffenberger is inviting Chamber members interested in joining the cooperative to a meeting Monday at 1 p.m. at Four Points Sheraton on Dual Highway to learn more about the cooperative.

He is looking for businesses to join the pilot, or first, group starting in January. Businesses also could join in March and September.

Chamber officials have informally agreed to hire a consultant to help with the cooperative, although the contract has not been signed with CQI Associates in Columbia, Md., Poffenberger said.

The Chamber will charge participating members a $250 application fee per location that probably will allow the Chamber to break even on the endeavor, Poffenberger said. There is a $3,000 cap on the application fee. The application deadline for the first group is Nov. 1.

The Chamber has 550 members, Poffenberger said.

Businesses in Hagerstown and Williamsport are part of those towns' cooperatives and would not be affected by the Chamber co-op, Poffenberger said.

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