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Berlin electric rates reduced

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.