Berlin Announces New Electricity Supply Contract

BERLIN — The Town of Berlin announced this week it has signed an additional two-year electricity supply contract with NextEra Energy Power Marketing, LLC, (NextEra Energy), stabilizing bills for the town’s electric customers starting in June 2013 and continuing through May 2015.

A recommendation to apply to the Maryland Public Service Commission for reduced municipal electric rates for non-residential customers is expected to be considered by Berlin’s Council in February and if acceptable, then forwarded for approval to the Maryland Public Service Commission.

In March 2011 the council signed the current one-year contract, which reportedly brought down customer’s rates by over 10%.

The savings are reflected in the billings customers are receiving now through lower Power Cost Adjustments (PCA). An extension of the current contract with American Electric Power Service Corporation was approved by the Mayor and Council October 2011 in a rising energy market. The impact of the one-year extension and increases in generation capacity and power delivery costs will be in monthly PCA beginning late this summer.

When the most recent contract with NextEra Energy becomes effective in June 2013, purchased energy for the town will drop significantly below the contracted rate in place at that time. The savings will be reflected in each customer’s bills through the PCA portion of monthly electric bills. The full impact of adjusted supply cost will be phased into rates through the PCA over the summer and fall of 2013.

“PCA charges represent just over one-third of the cost per kilowatt hour for residential customers, so the new two-year contract will have a measurable impact in keeping Berlin’s electric rates stable while the electric energy market continues to rise unpredictably,” said Mayor Gee Williams in a press release.

Three qualified firms competed for the two-year contract which was approved by the council Jan. 26.

“Our goal this year was to continue to be more ambitious in pursuing a timely approach in awarding purchased power contracts when the conditions are most favorable to the town.  The window of opportunity for taking advantage of this temporary dip in the market for purchased power was available due to an unusual decline in energy prices in

January,” Williams said. “I believe the town has once again taken a positive step in an unpredictable energy market by contracting another power supply agreement that will continue to reduce the cost of purchased power for Berlin electric customers. This has been the trend for the town since March 2009 when the first agreement was signed with NextEra Energy.”

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