Berlin Wants To Reduce Electric Rates For Businesses By 11%

BERLIN — Berlin business owners may see a nearly 12 percent drop in their electric rates if a recent application by the town to the Maryland Public Service Commission (MPSC) gets the green light.

“We are entering unchartered territory by requesting an electric rate reduction, but the town is prepared to provide any information or other documentation necessary for the MPSC to make a thoughtful and timely decision on our rate reduction request,” said Mayor Gee Williams.

Plans to go before MPSC asking for a non-residential rate reduction surfaced this winter, when positive reports by the town’s utility consultants, Booth and Associates, painted a picture favorable to change.

Councilman Troy Purnell explained that it has been Berlin’s goal for several years to push for a commercial rate drop so that fees can better fall in line with competitor rates.

Additionally, dropping commercial rates would bring them more in line with the town’s residential rates, which saw a reduction last March of about 10 percent due to a new town contract for energy.

“We’re going to end up comparable, is what the plan is,” said Purnell. “Basically, it’s the efficiency of the electric plant.”

Purnell gave Utility Director Tim Lawrence special kudos for the work he has done since coming to Berlin, but stressed that many people have played a role in getting the town to where it is today.

Councilwoman Lisa Hall also placed much of the credit at Lawrence’s feet and the electric department at large.

“A lot of emphasis has been placed on electric utilities and great strides have been made,” she said. “A lot of repairs have been made to equipment and to the building.”

Hall stressed that there is no crystal ball and the town can’t guarantee that the MPSC will accept the application. However, she did agree that, if the commission is satisfied with Berlin’s presentation, offering a commercial rate reduction would be good for Berlin.

“Hopefully, all of this action after being reviewed by this commission will enable them to approve this reduction,” she said.

Berlin hopes that the MPSC will approve an 11.48-percent non-residential rate reduction. Dropping fees should serve to give current town businesses a little breathing room while also attracting new entrepreneurs, said Williams.

“This approach was necessary in years past when there were a very limited number of non-residential customers in town,” he said. “But as one of many initiatives to increase businesses and jobs in Berlin, the current rate application will gradually reduce the disparity between residential and non-residential customers.”

When the idea was first floated last winter, the council was told that, of the 404 non-residential rate payers on the grid at that time, 300 could expect a 10-percent savings, 100 should see a 15-percent savings, while the four largest commercial electricity users should see about a 2 or 3 percent drop. Though the town has gained a few new businesses since then, the numbers should still be close to that original projection.

If rates do drop, the town will be losing about $270,000 that would have gone to the Berlin Electric Utility. But barring a major accident or market turnaround, the town is confident that the Electric Department can weather the hit and maintain the same level of service. Whether the MSPC feels the same won’t likely be known for at least a few months while members review the case.

2 thoughts on “Berlin Wants To Reduce Electric Rates For Businesses By 11%

  1. Didn’t the commercial accounts also get a 10 percent drop? Or, do they have a different town contract? Wouldn’t that give the commercial accounts a 22% drop?
    I don’t know what the competition’s rates are, but I can’t believe they don’t have commercial rates. Commercial rates are more because commercial units use more electric than residential units. This equates to more use of the infrastructure. You reduce the commercial accounts and the residential accounts are subsidizing the commercial usage of the plant and its equipment.
    As to the 10% drop, that only begins to make up for the inflated rates the electric customers were paying prior to this contract. No one mentioned the reason the town was paying so much before. No contract was sought because some members of this council wanted to sell the electric plant, and couldn’t enter into any long term contract. So we all paid very high rates while they attempted to sell this plant(which they couldn’t do.) Now in just a few years it has gone from something we needed to get rid of because of the aging equipment, to a plant that doesn’t need the $270,000 they are prepared to give up. If something goes wrong at the plant and this money is no longer available, repairs will come from the general fund or from increased rates for everyone. I am all for helping small business, but not at the expense of the residential taxpayer.

  2. $270,000 is an awful lot of money to be losing when other towns are facing bankruptcy. I feel as though this “break” is actually just setting the electric plant up for failure. You give kudos and then say… “oh by the way, we’re cutting you’re income.” This makes as much sense as changing the lighting in the town… again. Let’s build up the funds and then re-group. Once again, it appears that we’re biting the hand that feeds us. Small business knew what their bills would be, if they planned properly. They can survive as is, but could they afford a hike if this plan backfires? Probably not.

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