Some towns still run power systems Municipal utilities often offer savings

September 24, 1991|By Thom Loverro

While cities and towns across the country are trying to find ways to cut services, five Maryland communities qualify for endangered-species designation -- they still operate their own power companies.

Large public utilities have gobbled up nearly all the small municipal power companies that used to provide electricity independently. But Easton and Berlin on the Eastern Shore and Hagerstown, Thurmont and Williamsport in Western Maryland all provide electricity for their residents.

Easton and Berlin still generate their own power. Hagerstown, Thurmont and Williamsport, while no longer operating their own power plants, continue to maintain electrical distribution systems and bill users monthly.

Municipal officials say that the benefits to customers are quicker maintenance and stable rates.

Easton is the most unusual among the five communities. Nearly all its utilities -- electricity, natural gas, water, sewer and cable television -- are publicly owned.

Power is supplied to about 7,100 customers by the Easton Utilities Commission, which can either use power from its two operating plants or purchase it from Delmarva Power & Light Co., based on which rate is cheaper at any given hour, city spokeswoman Nancy Brinson said.

"It's a very unique setup here," she said.

Easton's electric utility, with $11.2 million in annual operating costs and about 40 employees, is the only one that turns a profit, last year's being nearly $500,000. That money is put back into the city coffers to pay other expenses or purchase new equipment to upgrade the system, Ms. Brinson said.

"I think our people are very satisfied with the system," Mayor George Murphy said. "Our billings are much lower than the large companies, and our service is excellent. Most of our workers are on a first-name basis with many of our customers. Problems can be handled quickly here."

Terrence Best, mayor of Thurmont, said that because of the town's location in rural northern Frederick County, Potomac Edison Co., the region's major power source, often finds it difficult to correct power problems quickly.

"We are known to have good service and can often have power restored quicker than Potomac Edison customers because of the magnitude of Potomac Edison's area to cover," he said. "We've had situations where one person who was a Thurmont Municipal Light Co. customer had his power restored within two hours, while his neighbor, a Potomac Edison customer, was without power for a day."

Hagerstown's is the largest of the municipal power operations, with about 40 workers in a city light department serving about 12,000 customers. City workers are responsible for installing and maintaining utility poles, power lines and other hardware and also the paperwork that comes with the billing.

Hagerstown recently had its first rate increase since 1984 in its attempt to balance a $15 million annual operating budget.

Thurmont power users -- about 1,900 residential, commercial and industrial customers -- have nothad a rate increase since 1981, although the town is considering one now to upgrade parts of its distribution system, which costs about $2.3 million annually to operate.

The Western Maryland communities have been able to maintain rates, despite increased cost of power bought from Potomac Edison, through a surcharge passed on to consumers. Users pay more when power charges go up, but the actual rates are lower than those of Potomac Edison because of lower maintenance costs and employee expenses, said Rick May, Thurmont town clerk.

Potomac Edison President Alan J. Noia said that the rate differences between Western Maryland's municipal power companies and his company are negligible. He also disputed claims that service is better. "We have operations offices at every major location, and we have an excellent service response time," he said. He also said Potomac Edison can offer services xTC that the municipal utilities cannot, such as energy audits.

The municipal electrical companies, like other public utilities in Maryland, come under the control of the state Public Service Commission.

Municipal operations have become rarer because of the rising costs of energy, said Frank Fulton, commission spokesman. "These systems are more expensive to operate today," he said. "The costs are high to expand and improve."

But the five communities still provide "safe, dependable and reliable service at reasonable costs," he acknowledged. "We get very few consumer complaints about these power companies," he said.

Potomac Edison has a 9.75 percent rate increase request pending before the commission, the company's first since 1985. Delmarva Power also has a request before the commission -- for a 7.1 percent rate increase. Delmarva's last rate increase in Maryland was in 1984; in 1986 the company was ordered to cut its rates by 3.2 percent to reflect savings from the federal tax reform act, Mr. Fulton said.

"We have a good power company, but some council members have a philosophical question of whether the government should be in a business it doesn't have to be in," said Hagerstown Councilman John L. Schnebly.

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