BERLIN – The town’s electric consultant has agreed to give Berlin a 25 percent discount for the next year and a half following an error that cost the town $435,876.
Berlin officials reported this week that the town had reached an agreement with Booth and Associates, its electric consulting firm, following the generation mistake that cost the town $435,876 in 2015. The consultant will give the town a 25-percent discount for engineering and financial services for the next 18 months. The company will also not charge the town for work needed to explain the issue to the Maryland Public Service Commission (PSC).
According to town staff, Berlin spends an average of $140,000 a year with its electric consultant.
“It was nice that the town and Booth and Associates were able to work together to rectify the situation,” Council member Lisa Hall said. “Going forward we need to have a discussion with Booth and Associates on how we can keep this from happening again.”
In December, the town was instructed by the PSC to recover $435,876 in power costs. According to town officials, representatives from Berlin meet with the regulatory body each December to review the Berlin Electric Company’s Power Cost Adjustment (PCA). The December 2015 review revealed that the town had failed to generate during a peak period in February of that year.
The PSC said the missed peak, because it was one of five the town should have generated during 2015, meant the town would need to recover $435,876 during the next three years.
To do so, customer bills were increased by $2.50 a month and $100,000 from the town’s contingency fund was put toward the deficit.
Some council members, made aware of the missed generation and resulting recovery method after the fact, were critical of the decision. Councilman Thom Gulyas said the town’s electric department made every effort to hit the generation peak but failed to do so based on advice from Booth and Associates. It was Gulyas and Hall who pushed the town to make an effort to recoup some of the $435,876 loss from Booth and Associates.
Gulyas said this week the 25-percent discount was the best the town could hope for.
“All in all it’s the best thing for the town,” he said.
Jason Walter, a resident and member of the former Berlin Utility Commission, pointed out that it was the town’s ratepayers who saw their bills increase as a result of the generation error.
“Will we see a credit?” he said. “The ratepayers incurred a direct charge.”
Gulyas said that while the 25-percent discount was the best possible resolution to the situation, it would not eliminate the rate hike customers saw.
“Unfortunately, we bought the electricity and we used the electricity,” he said. “There’s no way around it.”
Gulyas stressed that the generation error was not caused by town staff. He applauded the efforts Tim Lawrence, the town’s electric utility director, specifically.
“We’re lucky to have him,” he said. “He did everything he was supposed to do.”
Gulyas also credited Town Administrator Laura Allen for her work in negotiating a resolution with Booth and Associates but added that it was not a situation he wanted to see the town in again.
“I hope that never happens again,” he said. “I don’t like being blindsided.”
Mayor Gee Williams praised the resolution and pointed out that the company had helped the town save nearly $4 million since 2009.
“In Berlin, it’s all about partnerships,” he said. “With everything Booth and Associates has done for this town, it’s important to keep things in perspective. They have saved millions of dollars for our customers over the last several years. We came together as partners to measurably lower electric costs to Berlin Electric customers and we expect to maintain this partnership in the future.”
