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City electric rates up

November 03, 2004|by GREGORY T. SIMMONS

gregs@herald-mail.com

Customers of the City of Hagerstown's electric utility system will see an increase in their bills this month that will run through the end of January.

The bill for an average residential customer, who city officials say uses 700 kilowatt-hours of electricity, will increase an average of $4.39, from $44.59 to $48.98 a month, City Light Department Manager Michael Spiker said.

The portion of the customers' bills that will increase relates to the pass-through charge for the bulk power the city buys and transmits to its customers, Spiker said. The city does not generate its own electricity.

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The rate increase has already been approved by the Maryland Public Service Commission and went into effect Monday, Spiker said. The commission regulates state utilities and other industries.

Spiker said that between January and October of this year, the city undercharged customers a total of $263,740, meaning the city spent $263,740 more in bulk power than it sold to city customers. The rate increase should bring the city's costs into balance by the end of January, Spiker said.

In layman's' terms, "We took in less money than we spent in electric charges," Spiker said

Spiker also was given the go-ahead to proceed with revising the pass-through charge monthly, instead of yearly, which could create more price fluctuations for customers, although on average customers would spend the same amount. The move would improve the city's accounting, Spiker said.

At Tuesday's City Council work session, Spiker said that because of an upcoming agreement expiration with Allegheny Power, some electric costs for city services, such as water and sewer plant operations, could soon increase by 35 percent.

Spiker said the city will request bids on electricity for the city-owned operations and will present those bids to the council.

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