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Chamber cooperative to fight power price surge

July 30, 2005|By DANIEL J. SERNOVITZ

daniels@herald-mail.com

The Hagerstown-Washington County Chamber of Commerce will form its second electricity-buying cooperative in the fall to help members combat soaring rate increases.

"What we're really talking about is: Is it going to go up a lot, or a whole lot?" said Chamber President Brien Poffenberger. "Instead of being little players, we're actually one big player."

In an effort to create a more competitive electricity marketplace, the state adopted the Electric Customer Choice and Competition Act in 1999. Locally, Allegheny Energy was forced to operate under rate caps that went into place in 1999 as part of the act.

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On Jan. 1, the state lifted the cap and, at the same time, allowed customers of the Greensburg, Pa.-based energy supplier to seek more competitive prices from other suppliers.

Knowing Allegheny was projecting rate increases of between 23 percent and 51 percent on Jan. 1, when the state lifted its rate cap, the Chamber formed its first cooperative of 14 of its members as a pilot program in the fall of 2003 to begin researching its options.

Working through CQI Associates, a Columbia, Md.-based consulting firm, the Chamber secured a three-year contract with Select Energy in mid-April. While only three suppliers participated in the process, CQI Managing Partner Richard Anderson said he expects more will take part in future cooperative efforts.

"We would hope that each time we do this we will see a larger number of suppliers, especially as they become more comfortable working in Allegheny's service area," he said.

Poffenberger said eight of the 14 cooperative members entered into contracts with Select Energy, saving between 4 percent and 15 percent in the first year of the contract, compared to Allegheny rate increases. That savings increased to between 16 percent and 27 percent by the third year.

"The price that we negotiated was advantageous for the larger players," Poffenberger said. "Some people fell into this sort of netherworld where they thought they were going to get a better deal. If you're not a big user, this probably isn't the solution."

Interested Chamber members can apply to join the cooperative, for a $250 charge, through Sept. 28, and nonmembers may apply if they join the Chamber before the deadline.

The Chamber will hold a series of information sessions on the program later this month and in September and will hold a larger presentation on deregulation during its Sept. 14 Eggs and Issues breakfast meeting. Anderson and a representative from Allegheny are scheduled to speak at the session, to be held at 7:30 a.m. at the Plaza Hotel in Hagerstown.

More information can be obtained by contacting the Chamber at 301-739-2105 or visit its Web site at www.hagerstown.org.

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