Supply Deal Should Help Customers

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Optimism is difficult to come by for many folks these days, but that’s exactly what Berlin residents should have today because a major step was taken this week toward lower electric rates for town households.

A major water cooler conversation over the last year in Berlin has been electric rates. Many people can’t afford to pay their bill, relying instead on partial payments to avoid shutoffs as long as possible. Those who can make their payments in full do so reluctantly and with a lot of spite as research shows Berliners have to shell out much more coin than similar size households in other areas. In one case reported last summer, a Berlin resident’s electric bill exceeded $600, while the exact same house manufactured by the same company in Ocean City paid $245. There are many similar examples.

The dirtiest acronym to Berlin homeowners currently is the “PCA” (Power Cost Adjustment). According to the town’s bill, it “is a calculated dollar amount per kWh to be added or deducted from the customer’s billing each month, reflecting that increase or decrease in the fuel cost of generating or purchasing power that must be passed on to the customer.”

This week’s power purchase supply accord is expected to go a long way toward addressing this extra charge. The immediate reaction to this news is understandable. Everyone wants to know how much it will save them and when. Unfortunately, it’s a little too early to tell exactly how much relief will come ratepayers’ way, but the comfort can be found in the fact they will be paying less in the coming months than they did during the same time period last year, assuming usage is on par. That will be particularly good news in the summer months.

The major change with this power purchase agreement is Berlin customers will face stable rates for power over the next two years. Here’s how this new supply agreement works: the contract sets an initial price for two months followed by a guaranteed rate for the next year (June 2009-May 2010) and another set rate for the year after (June 2010-May 2011).

What this accord will immediately address is noteworthy. It ensures there will be no “dramatic swings in their PCA Charge on their monthly utility bills as they have experienced during the past year” and “fluctations in Berlin electric bills … will be tied primarily to energy use and will not be subject to marketplace changes in the cost of power that customers have no influence to control,” Mayor Gee Williams said this week.

This good news comes at an opportune time. Expenses for most homeowners and renters are going through the roof, and any kind of stabilization should come as welcome news. Berlin customers may still continue to pay more than their colleagues in other municipalities, but at least we know have reason to be optimistic there will not be fits of sticker shock when the bills arrive in the near future.

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