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Proposed electricity rate increase in Williamsport causes confusion

November 14, 2011|By JULIE E. GREENE | julieg@herald-mail.com

WILLIAMSPORT — Confusion reigned during much of Monday night’s public hearing regarding the Town of Williamsport’s proposal to increase its retail electricity rate by 9.91 percent.

Despite the proposed increase, the town’s electric customers’ overall electric rate would decrease about 2 percent. That’s because the town received a decrease in its wholesale rate — the rate the town pays to buy power for its customers — that is larger than the town’s proposed rate increase.

The hearing at Williamsport Volunteer Fire & Emergency Medical Services’ fire hall on Brandy Drive was still going on at 8:15 p.m. Monday with about 23 people in the audience. It began after a brief monthly town meeting that started at 6:30 p.m.

David Downes, chief executive officer of Downes Associates — an engineering and management consulting firm hired by the town — presented information about the proposed rate change and then took many of the audience’s questions before Town Attorney Ed Kuczynski and Mayor James G. McCleaf II spoke up to reiterate and attempt to clarify answers for the audience.

Much of the confusion or concern focused on the power cost adjustment rate in Williamsport electric bills. That particular rate is higher for Williamsport customers than for Hagerstown or Potomac Edison customers.

McCleaf explained that electric service entities structure their bills differently and though the power cost adjustment rate is higher in Williamsport, the overall rate is lower.

The cost of 1,000 kilowatt hours for a Williamsport residential customer is $86.55, compared to $96.88 for a Hagerstown customer or $101.20 for a Potomac Edison customer, according to a document McCleaf handed out in the middle of the public hearing. Those calculations are based on November 2011 rates.

McCleaf said he does not expect the town’s request for a rate increase to be approved at 9.91 percent.

In reviewing the town’s request for a rate increase, the Maryland Public Service Commission is asking about the town’s lack of debt for its electric system, as well as why town officials waited so long to ask for a rate increase, Downes said.

It has been at least 32 years since the town increased its electric rate, Downes said.

One audience member wanted to know where the profits from the town’s electric system went.

Downes said the town’s electric system has operated at a loss for the past three years. Town officials have covered that loss with money from the town’s general fund, he said.

There is a great deal of overlap between the town’s electric customers and its taxpayers, but the group is not entirely the same, Downes said.

About 100 electric customers within town limits are served by Potomac Edison, Downes said. About 100 electric customers outside town limits are served by the town, he said.

The town needs to cover its electric costs and invest money in improvements to keep the system reliable and safe, Downes said.

The Maryland Public Service Commission will hold an evidentiary hearing on the proposed rate change at 10 a.m. on Dec. 15 in the 19th-floor hearing room at 6 St. Paul St. in Baltimore, according to the commission’s website. If needed, another evidentiary hearing will be held at 10 a.m. Dec. 16 in the same room.

The commission will hold a public hearing on the proposed rate change at 7 p.m. Dec. 20 at Williamsport Town Hall.

Downes said the earliest he expected the commission to vote on the rate proposal would be January or February. That means the rate change wouldn’t take effect, if approved, until late April or early May, he said.

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