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Borough Services >> Electric >> Town Hall Meeting
The Borough of Middletown operates its own electric system and bills the residents and businesses of town for this service. In recent years, the wholesale cost of electricity has risen to a point where residents are concerned. A second Town Hall Meeting was held on August 5, 2008, to attempt to inform the public of the benefits of public power.
The following is important information presented at the Town Hall Meeting:
Chart One: Electric Operating Fund
There are two lines on this chart; the top solid line represents expenditures for energy from 2001 to 2006. The second dashed line represents all other operating expenses.
As this table clearly shows, it is the cost of energy that has driven up annual expenses in the Electric Operating Fund, the Borough's account that handles our electric business. As the cost of paying for energy has risen, the Borough has adopted a fee structure which requires customers cover only the wholesale cost of electricity in any given month plus our standard overhead for operation. The fund is not requiring increasing rates for any other expense other than energy; not for cars or equipment, etc.
Chart Two: Cost of Wholesale Electricity
No one knew in 1998 when the Borough settled with Met-Ed our lawsuit for the supply of electricity that electric rates would climb as fast as they have. The table above clearly shows two things: first that electricity prices, in the wholesale marketplace, have been rising faster and faster as the cost of fuel has risen. The table also shows that the price goes up and down month to month. This is why Middletown has a variable electric rate. Our retail rate goes up and down in proportion to the wholesale cost so we only collect what we need, in proportion, to what electricity costs.
Chart Three: Our Residential Retail Rate vs. Statewide Average Electric Rate
The above table shows a comparison between Middletown's residential retail electric rate and the state-wide average residential electric rate. As opposed to comparing your bill to a friend's bill, these statistics come from the U.S. Department of Energy. You can clearly see that until October 2006, Middletown's rate was below (sometimes far below) the state average. You can also see that our rate became a variable rate in October 2006. Since then, our rate has gone up and down. Some months, our rate has still been below state-wide average. However, we now sometimes exceed the state-wide average.
As was explained in detail at the Town Hall Meeting, this is a result of the temporary artificial price caps that are holding down the state-wide average residential electric rate. These temporary caps end soon and when they do, we anticipate the cost for the average residential user will far exceed Middletown's rate. After all, our rate is based on covering only our current wholesale costs.
The Purchase Power Cost Adjustment
The PURCHASE POWER COST ADJUSTMENT (PPCA), rises and falls as the wholesale cost of electricity rises and falls. The adjustment measures the change in wholesale cost against a base month and adjusts all retail rates (residential, commercial, and industrial) by that percent difference.
The PPCA is more fair because it allows the rate to go down, if wholesale prices improve, as well as go up, if they do not. For example, in the month September 2007, the average residential customer’s monthly bill would rise from $83.60 to $102.37, but in May 2006, that same customer would have paid only $93.25 as the wholesale cost was low that month. The PPCA is more like our wholesale arrangement, where some of our electricity is purchased at a flat rate, and the balance is variable month to month.
This system addresses the monthly variation in the wholesale cost of electricity. Those of us who are aware of the up and down of gasoline prices know that these days, energy prices change up and down all the time. Now, as we attempt to buy the least expensive wholesale power for the community, our retail rates will go up and down accordingly. It is staff’s hope that this system will be fairer to more customers.
American Municipal Power of Ohio (AMP-Ohio)
Middletown is a proud member of the AMP-Ohio consortium. AMP-Ohio is the nonprofit corporation organized in Ohio in 1971 for the purpose of owning and operating electric facilities or otherwise providing for the generation, transmission and distribution of electric power and energy to its member municipal (city-owned) power systems.
Through this consortium, Middletown acquires wholesale electricity.
AMP-Ohio purchases wholesale electric power and energy, and sells it to members at rates based on the purchase price and dispatch fees plus a small service fee. The organization also develops alternate power resources to best meet members’ short- and long-term needs, and also operates an energy control center 24 hours a day, 365 days a year to serve its member communities.
As of January 2008, AMP-Ohio membership includes 81 public power communities in Ohio, 27 in Pennsylvania, seven in Michigan, five in Virginia, two in West Virginia and one in Kentucky.
www.amp-ohio.org
For specific question about the borough's electrical distribution system contact the Electric Utility Department at 717-948-3042. For more information about billing and accounts, contact the Finance Department at 717-948-3011.
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