BERLIN — With a positive report from electric consultant Dwight Davis in hand, the Berlin Mayor and Council decided to continue pursuit of lowering non-residential energy rates in town. If accepted, commercial rates should fall closer in line to residential rates, which experienced a roughly 12-percent drop this fall.
To lower non-residential rates, the council will need to take its case in front of the Public Service Commission (PSC). The commission has the final authorization on whether Berlin can change rates, though after Davis’ presentation Monday, Mayor Gee Williams is confident the town will receive approval.
“It took us three years to be in a financial position where we could even make this case,” he said.
According to Davis, non-residential rate payers, which are most typically commercial businesses, should see an average savings of between 10-15 percent if the PSC approves the case. Of the 404 non-residential rate payers, 300 can expect a 10-percent savings, 100 should see 15-percent savings, while the four largest would only see a 2-3 percent drop.
Still, Williams pointed out that it was savings for everybody and explained that the four biggest rate payers received other benefits and incentives anyway.
“I can’t see how it could do anything but help,” he concluded on the potential rate change.
The process isn’t a simple request and approval, however.
“We still have a couple unresolved issues,” said Davis.
To justify lowering rates, Berlin has to prove that it can afford the loss of revenue. Otherwise, the town could find itself scrambling back to the PSC once the council finds it can’t maintain the cuts. However, after Davis’ report Williams doesn’t entertain that as a realistic worry.
“You’ve got the funds,” Davis told the council.
Davis explained that his firm, Booth and Associates, which the town hired as energy consultants in the summer of 2008, looked “at 10 years of requirements” to make sure Berlin could sustain a non-residential rate reduction in the long run.
“You need to have money available to continue to invest in operation,” said Williams.
Davis pointed out that restructuring how the town power plant operates has helped generate savings. From a peak of 300 hours of operation annually a few years ago, power plant activity has been reduced to 60-70 hours annually concentrated around the high demand summer months.
Less running time means more time for repairs, said Davis, not to mention fuel savings.
“You’re able to share the staff that’s out there,” he said.
According to town administrator Tony Carson, Berlin is “exceeding our expenses considerably.” Davis agreed and said those savings are reflected in the bills rate payers receive.
Williams stressed how careful the town needs to be in proceeding with asking for a rate reduction.
“We don’t want to move dollars from one customer to another,” he said.
The council was satisfied with Davis’ findings so far, which place Berlin on sound footing for rate-reduction request. Davis asked for a few more weeks to organize the town’s case and plans on filing with the PSC in early April. He hopes for approval in time to implement the rate reduction by July 1.
The council approved unanimously.
On the topic of energy reform, the council also voted to accept a contract with Nextera for purchase power from June 1, 2013-May 31, 2015.
According to Williams, being able to purchase power directly from the wholesale market, an option the town did not have with its previous energy contract, is another one of the reasons Berlin has been seeing savings in electric costs.