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Light rate issue to cut dividend

February 02, 2005|by GREGORY T. SIMMONS

A problem with a City Light Department rate that hasn't been changed since the 1970s will lead to a reduction in the Community Betterment dividend, which is used to pay for community development projects, including mortgage payments on the Hagerstown Ice & Sports Complex.

City Light's "base rate," which represents the cost for electric transmission, reflects true costs from about 30 years ago, City Light Manager Mike Spiker said Tuesday. The actual cost is about 1.5 times the city's current base rate, which is 3.2 cents per kilowatt-hour.

The problem meant the city did not collect as much money from customers last year as the actual electricity used by city customers cost, leading to a $116,231 operating loss. The department, however, did not lose money because of cash investments, City Finance Director Alfred Martin said.

The City Council on Tuesday gave the go-ahead to a $35,000 study to determine what the new rate should be.

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