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Hancock businesses can get fixed electric rate

September 18, 2007|By JOSHUA BOWMAN

HANCOCK - Hancock officials signed an agreement Monday with an energy company that will allow some businesses in town to lock in electricity rates for several years.

While the agreement might not result in lower electricity costs, it will provide stability for small- and medium-sized businesses trying to navigate Maryland's chaotic energy market, said John Berg, commercial manager for Direct Energy.

"What this program provides is budget certainty. We hope, in addition to that, it will provide some savings as well," Berg said.

The agreement allows businesses belonging to the Hancock Chamber of Commerce to sign multi-year, fixed-rate contracts with Direct Energy for electricity service. Businesses can sign contracts for as long as 58 months, compared to 12-month contracts offered by Allegheny Power.

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During a presentation before the Hancock Chamber of Commerce at Weaver's Restaurant, Berg said Monday that he could not guarantee that Direct Energy's rates would be lower than Allegheny Power's rates.

He estimated that rates would fall between 9 cents and 10 cents per kilowatt/hour, on the low end of what he said was the national average of 9 cents to 14 cents per kilowatt/hour.

Berg said the benefit of the program lies in the fixed rate, which would last for the duration of the contract.

"If you look at the rates over the past years, it goes like this," said Direct Energy Account Manager Jeff Hammer, holding his arm at an upward angle. "They've just skyrocketed."

Several business owners at Monday's meeting said they were intrigued by the idea of paying a fixed rate for electricity, though they wondered whether they would save money with the program.

"This is kind of like playing the lottery, huh?" joked Penny Pittman, president of the Hancock Chamber of Commerce.

"That's true," answered Hammer. "You have to ask yourself, 'What's the probability in your mind that prices will go down?'"

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