Chambersburg electric rates to increase in 2009

September 09, 2008|By DON AINES

CHAMBERSBURG, Pa. - Rising energy costs are not limited to the gas pump and the 10,500 customers of the Chambersburg Electric Department will be reaching deeper into their pockets next year to light, heat and cool their homes, Department Superintendent Richard Hamsher told the Borough Council on Monday.

Hamsher, who will retire Feb. 1 after 40 years, including 23 as superintendent, told the council that customers can expect their electric bills to rise about 20 percent over the course of 2009, but not all at once.

"It's not going to snap into place on Jan. 1," Hamsher said of the anticipated rate hikes. "It will be phased in."

Customers, including about 8,000 residential customers, have seen rates go up about 20 percent this year, as well, in four jumps, he said. Hamsher said he did not have at hand information on the average monthly residential electric bill.


"The price of energy on the grid is going up," Hamsher said of the cost of buying electricity to distribute to borough customers. Part of that is increased transmission costs, the price the borough pays for that energy to be transmitted over the power grid.

Another factor is the cost of natural gas, Hamsher said. The borough has two power plants it uses to generate electricity and the cost of production is linked to the cost of natural gas, he said.

The power plants benefit the borough by allowing it to produce electricity at periods of peak demand when it is most expensive to buy on the spot market. When the cost of buying electricity exceeds the cost of producing it, the borough fires up the plants, he said.

Since the Orchard Park Plant opened more than four years ago, the borough has saved more than $11 million by producing its own energy, Hamsher told the council.

While electric rates rose 20 percent for customers this year, Hamsher said the cost of supplying electricity rose at a higher rate. In 2007, the cost was about $9.3 million, but that is projected to hit $16.4 million this year.

However, the department operates at a surplus, part of which is set aside for capital improvements and about $825,000 will go to the borough's general fund next year to help pay for police, fire and other services, he said.

Over the next five years the department's list of possible capital improvements includes substation upgrades, expanding the Orchard Park plant, automated meter reading and converting the distribution system from 4 kilovolts to 12 kilovolts.

The borough also is looking into using landfill gas as a possible source of power. The gas would be filtered and piped from the IESI landfill in Scotland, Pa., Hamsher said.

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