WILLIAMSPORT — Electricity bills are on the verge of dropping in Williamsport, Mayor James G. McCleaf II said Monday night.
The cost of purchasing electricity from FirstEnergy, formerly Allegheny Energy Supply, will drop about 12 percent, a savings passed to town customers, McCleaf said.
The Maryland Public Service Commission must approve the new wholesale rate plan. A hearing is scheduled for Thursday in Baltimore.
A "talking points" sheet from which Councilman James C. Kalbfleisch read Monday said the town would have the lowest electric rates in Maryland — 9 percent less than Potomac Edison customers, 36 percent less than Baltimore Gas and Electric Co., and 38 percent less than Pepco.
However, the town also plans to raise its own base retail rate, which officials said hasn't been adjusted in about 30 years. The increase would pay for higher operating expenses and system repairs. The town has been upgrading its distribution system.
The retail rate increase — $174,000, or 9.9 percent, according to a resolution approved Monday — would take effect early next year if the PSC approves it, McCleaf said.
The net effect for customers — after the wholesale rate decrease and the retail rate increase — would be a drop in electricity bills of about 2.5 percent, McCleaf said.
During a town council meeting Monday night, Kalbfleisch, who oversees the town's electricity service, said Williamsport negotiated a two-year contract extension with FirstEnergy. It started June 1.
The cost of electricity to the town dropped $149,000, according to the resolution.
Todd Meyers, a spokesman for FirstEnergy, which acquired Allegheny Energy, said Tuesday that the economy is affecting electricity prices.
"Demand is soft because of the recession," he said.
Meyers said in a subsequent voice mail that he couldn't discuss specifics of a contract because it's confidential, although the town may reveal it.
FirstEnergy has asked Williamsport about an additional one-year extension from 2013 through 2014 that's expected to reduce costs further, according to Kalbfleisch's talking point sheet.