Berlin Enters Power Agreement



Taking advantage of a temporary drop in the volatile electric power market, the Town of Berlin has signed an additional two-year electricity supply contract with NextEra Energy Power Marketing LLC (“NextEra Energy”) that will help to stabilize bills for the town’s electric customers starting in June 2013 and continuing through May 2015.

A recommendation to apply to the Maryland Public Service Commission for reduced Electric rates for non-residential customers is expected to be considered by the Berlin officials in February and if acceptable, then forwarded for approval to the Maryland Public Service Commission.

In March 2011 the Berlin Mayor and Council signed the current one-year contract which brought down customer’s rates by over 10%. The savings are reflected in the billings customers are receiving now through lower Power Cost Adjustments. An extension of the current contract with American Electric Power Service Corporation was approved by the Mayor and Council in October 2011 in a rising energy market. The impact of the one year extension and increases in

generation capacity and power delivery costs will be in monthly Power Cost Adjustments beginning late this summer.

When the most recent contract with NextEra Energy becomes effective in June 2012, Purchased energy for the town will drop significantly below the contracted rate in place at that time. The savings will be reflected in each customer’s bills through the Power Cost Adjustment (PCA) portion of monthly electric bills. The full impact of adjusted supply cost will be phased into rates through the PCA over the summer and fall of 2013.

“PCA charges represent just over one-third of the cost per kilowatt hour for residential customers, so the savings provided through the new contract will have a measurable impact for Berlin electric customers,” said Mayor Gee Williams.

Three qualified firms competed for the two-year contract which was approved by the Town Council January 26th. “Our goal this year was to continue to be more ambitious in pursuing a timely approach to awarding purchased power contracts when the conditions are most favorable to the town. The window of opportunity for taking advantage of this temporary dip in the market for purchased power was available due to an unusual decline in energy prices in January,” Williams added.

“The town has set up provisions over the past year which enabled the Mayor and Council to respond quickly to this opportunity,” the Mayor noted. “This most recent contract continues the town’s goal of doing everything possible to stabilize energy bills for Berlin electric customers in a volatile and rising electric power market.”

“I believe the town has once again taken a positive step in an unpredictable energy market by contracting another power supply agreement that will continue to reduce the cost of purchased power for Berlin electric customers that has been the trend since March 2009 when the first agreement was signed with NextEra Energy,” Williams said.

Berlin officials were guided and advised through the last three electric supply contracts by the electrical engineering consulting firm of Booth and Associates, Inc. of Raleigh, N.C. who was first hired by the town in August 2008.

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