Berlin Says New Power Contract Will Reduce Utility Bills

BERLIN -- Berlin officials are hoping a new power contract will reduce resident energy bills by about 12 percent this summer.

That decrease will be shown in the Price Cost Adjustment (PCA) section of resident electric bills and will be phased in over a three month period beginning in August.

“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.

With Berlin’s current contract expiring this year, an effort began months ago to locate a new energy provider. After an Internet reverse-auction on the World Energy Exchange Wednesday, Berlin has decided to enter a one-year power purchase agreement with American Electric Power Service Corporation (AEP).

“Our goal this year was to be more ambitious by using World Energy’s Internet auction approach,” said Williams, “in order to produce the lowest possible purchase power contract by attracting multiple qualified bidders to compete with each other in real time.”

The last time Berlin attempted to have a similar, albeit more traditional, request for proposals in 2009, there was only one qualified bid. This year, however, there were three qualified national firms competing for the town’s business. All three companies made bids in real time over the Internet. Those bids were visible both to the town and to all companies, encouraging each firm to underbid its competition.

“I believe the town has taken a positive step in an unpredictable energy market by contracting a power supply agreement that will reduce the cost of purchased power over the next year compared to what we have been paying,” said Williams.

Town officials were advised during the auction by a pair of consultation firms, Booth and Associates, Inc and Customized Energy Solutions. Berlin has had previous experience with both entities.

One group missing from the process was the Berlin Utilities Commission (BUC), a coalition of residents who, for the past 14 years, have advised the town council on utility related issues. However, the BUC was disbanded Monday, less than 48 hours before the bidding process.