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Berlin electric rates reduced

11/15/12 | By Nathan Brunet, Staff Writer

BERLIN – The Mayor and Council of Berlin received an order this week from Maryland Public Service Commission (MPSC) Public Utility Law Judge to allow an 11.48 percent decrease in the town’s non-residential rates effective Nov. 27, unless someone appeals the lowering of the rates 15 days from the state’s approval.

Terry J. Romine, chief public utility law judge for the MPSC, ruled Nov. 8, that the state finds Berlin, even with the proposed decrease in non-residential rates, is able to fund the 10-year capital plans projects and base rate revenues will not result in a decline of service reliability or service quality.

Assuming no one formally appeals the electric rate reduction, non-residential customers will begin benefiting from the lower rates in their December 2012 billing. 

“The Town of Berlin is extremely pleased that the Public Service Commission, after an extensive review of our financial condition and service of reliability, has granted this important electric rate reduction,” said Mayor Williams.

Berlin’s Council approved a recommendation to apply to the MPSC to reduce municipal electric rates for non-residential customers in February. In Maryland, rates, including reductions in rates, must be approved by the MPSC. The Council’s action directed the town’s electric utility consultant and an attorney specializing in electric utility issues in Maryland to prepare the extensive application for the rate case for consideration by the MPSC.

The reduced electric rates for commercial customers would lower revenue by about $270,593 to the Berlin Electric Utility. The application to the MPSC showed the rate decrease could be accomplished while continuing to improve the financial condition of Berlin’s Electric Utility. The PSC held an evidentiary hearing in Berlin’s Town Hall where both written and oral testimony was given regarding the proposed rate decrease.

An agreement was reached between Berlin and the Maryland Public Service Commission that the town will continue its Energy Audit Assistance Fund at $15,000 per year and will increase its Electric Assistance Fund annually.  If the Electric Assistance Fund accumulates to a level of $20,000 or more, the Town shall credit those funds to all of Berlin’s electric residential rate payers.

Historically, Berlin’s commercial electric customers have paid more per kilowatt-hour for their service, in some cases up to 20 percent higher than residential customers, said Mayor Gee Williams. 

“This approach was necessary in years past when there were a very limited number of non-residential customers in town.  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,” the mayor said.

Since electric utilities were deregulated in Maryland, the MPSC has used its ratemaking authority over electric utilities to gradually move rates toward parity to avoid rate shock among any classes of customers. Although, rates for now of non-residential customers will continue to be somewhat greater than for residential customers, Berlin’s customers will be paying a more equitable share of the cost of providing electricity to town electric customers if the rate reduction application is approved, the mayor added.

All Berlin electric customers, residential and commercial, have benefited from contracting multiple purchase power agreements that were approved by the Mayor and Council between June 2011 and February 2012. 

“The net effect of the electric contracts has been to first reduce and then help stabilize bills for the town’s electric customers through May 2015,” the mayor said.

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