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Electric Rate Increase Not
as Shocking as Expected

James Rada, Jr.
Thurmont Dispatch

(3/22) Electric rates in Thurmont will increase by 42 percent over the next year, beginning with a 26 percent increase next month.

David Downes with Downes Associates presented the Thurmont town commissioners with what the electric rates for town residents will be next month. He explained the increase will be a two-step process that will be phased in over a year beginning next month.

"It's a 26-percent increase now and over the next 12 months our (rate) is going to go up another 14 percent," Downes said.

He said the total increase compared to the current rate of 7.149 cents per kilowatt hour will be about 42 percent. This means this April's rate will be 8.972 cents rising to 10.152 cents by April 2007. An average monthly electric bill of 1,000 kilowatt hours will be more than $30 greater.

Commissioner Ron Terpko said, "I think 42 percent is horrible, but it's still better than the initial 70 percent we thought it was going to be."

The town has been expecting the new rates to increase because electric rates in the region have been spiking since June 2005 when Virginia joined the same power grid as Maryland.

"Virginia Power joined in May of '05 and from that point on, our prices weren't the same," Downes said. "The power world has turned upside down beginning in June '05."

The rapid increases contributed to the closure of Eastalco in Adamstown and proposals by power companies to build transmission lines across Frederick County.

Downes pointed out the town has no control of the rate increase because it is an automatic process and the rate increase is simply a pass-along cost.

"Our rate in the Town of Thurmont in terms of profit hasn't gone up one penny," Mayor Martin A. Burns said.

Despite the increases, Thurmont's electric rates will still be cheaper than other regional power suppliers.

"I think there's a good chance we may have the lowest rates in the state of Maryland," Downes said.

While Potomac Edison still has a lower rate, it will last for only two more years. Downes said when Potomac Edison prices do increase in 2008, it is expected the percentage will be much higher than Thurmont's 42 percent.

"In 2009 when those rate caps come off, those rates are going to go through the roof and we're going to be sitting pretty," Burns said.

Thurmont's new rates will also be locked in for five years.

"The agreement you have is going to have a high level of insulation for your customers for the next five years," Downes said.

The commissioners agreed to mail each town resident brochures on energy conservation to help them deal with the rate increases.

COMPARING THURMONT'S NEW ELECTRIC RATES

Below is the average monthly electric bill based on 1,000 kilowatt hours for area power suppliers. The percentages reflect announced rate increases.

  Residential Rate Increase
Potomac Edison $67.64 Locked in for 2 more years
Thurmont (current) $71.49  
Thurmont (4/06) $89.72 26%
Thurmont (by 4/07) $101.52 42%
Delmarva Power-MD $134.55 35%
PEPCO $136.41 39%
BG&E $140.15 72%

 Source: Downes Associates, Inc.

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