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Electric shock

Residents stunned by bill increases

Residents stunned by bill increases

March 02, 2007|by TAMELA BAKER

WILLIAMSPORT - Spikes in their electric bills have caused concern for some Williamsport residents and business owners.

"Electric in this town will probably put me out of business," said Denny Lynch, owner of Byers River City Market. Lynch said the combined electric bills for two properties he rents in Williamsport can run as high as $2,500 a month.

Tina Sykes, who with her husband recently opened a restaurant called Potato Cakes, said before they opened their business, they had been told electricity in their facility - long a restaurant location in Williamsport - would run about $500 per month. Her most recent bill, however, was $1,100, she said.

So many residential customers were reeling from sticker shock when they opened their latest bills that the town has offered them a little extra time to pay a portion of their bills, Mayor James McCleaf II said.

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One Williamsport resident's electric bills totaled more than $1,100 for the past two months, Town Clerk James Castle confirmed. She and other residents who heat their homes with electricity were particularly hard hit by electric costs last month, town officials said.

There are several reasons for the spike in electric bills. In addition to the cold weather, one is that caps on electricity rates, imposed by the Maryland General Assembly when it voted to deregulate utilities, are expiring in various parts of the state.

The General Assembly voted in 1999 to deregulate electric utilities, believing the move would encourage competition and ultimately result in lower rates for customers. But that competition didn't materialize, and the cost of supplying energy soared while Maryland customers were still paying below market rates.

Williamsport - as well as Hagerstown and Thurmont, Md. - negotiated new five-year energy contracts with Allegheny Energy in 2005 that became effective last summer. While those municipalities participated in the negotiations, Castle said each has its own purchase price adjustment based on its past year performance.

Last year, Williamsport collected nearly $68,000 less from its customers than it had to pay for its electric power, Castle said. So its purchase power adjustment went up - from a shade more than .033 per kilowatt hour before the new contract to .073 now.

"We got the best rate possible," Councilman Jeff Cline said.

It's that purchase power adjustment that makes up the bulk of the bill - and is putting his business at risk, Lynch said. Lynch said he and his wife talked to town officials and to an attorney, "but they say there's nothing we can do about it."

On Thursday, Williamsport officials sent letters to residents announcing the town would waive late fees for this month and give them an additional two weeks to pay the tariff portion of the bill. That's the part that the town keeps for administrative costs like billing, Castle said.

"We've had numerous complaints," McCleaf said Thursday morning. "I'm not any happier than anyone else."

But Williamsport residents "are on top of it," he said. "They know it's not the mayor and council's fault deregulation's happening. I don't think anybody locally can do anything. I tell people to call their delegation" to the General Assembly.

"This is a very difficult thing to explain," Castle said. "It's a very complicated system."

He said town officials hope eventually to bring rates down.

Some businesses in Williamsport reported that they aren't seeing a dramatic impact. But Diane French, owner of A Touch of Country, reported her bill "probably almost doubled" with the new rates.

"I think everybody's getting hit," she said. "I don't think we're an isolated town."

Sykes said she plans to soldier on, despite the high bills.

"We're just gonna keep paying the electric bill," she said. "We're just getting started - all we can do is keep going."

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