Berlin Filing To Lower Business Electric Rates
BERLIN -- As part of a long-running strategy to attract business to Berlin, the Mayor and Council voted Monday to fund a rate case with the goal of lowering commercial electricity rates.
“If we can get them in line … I think it would just be another major incentive for people to establish businesses in Berlin,” said Mayor Gee Williams of commercial electric rates.
Currently, there’s anywhere from a 15 to 20 percent disparity between residential rates and different levels of non-residential or “commercial” rates. Williams explained that the town hopes to eventually lower commercial rates until they are even with the current 14 cents per kilowatt hour residential.
“It will be a continuing challenge to make sure power costs stay competitive,” said Dwight Davis, Vice President of Financial and Strategic Services at Booth and Associates Inc.
Davis told the council that the town would need serious funds to be able to decrease commercial rates without inflating residential rates.
Berlin will have to prove to the Public Service Commission (PSC), which regulates rates, that the town can handle the adjustment. To do so, a rate case will need to be conducted, and Davis told the council it would be relatively expensive. He estimated that the whole endeavor, including substantial legal fees, would be approximately $135,000.
“That’s a huge commitment,” said Davis.
The $135,000 would be used to determine if the town would be able to afford running lower commercial rates and would give the PSC the data to prove it.
“We need to put some hard figures to that,” said Williams.
Even after expending the resources, there’s no guarantee that the study will verify that Berlin can handle a commercial rate reduction. However, Davis was confident that the case would only reaffirm what his company was predicting.
“You’ve got the money to reduce those rates,” he told the council.
Williams added his own assurance.
“If we thought it was a longshot, it wouldn’t be on the agenda,” he said.
Putting the majority of the town at the standard $.14 kwh rate should go far toward attracting business, according to Economic Development Director Mike Day.
“It [the high commercial rate] is one of the biggest complaints by small businesses in town,” he said, calling the rates “a deterrent.”
Williams also felt the need for bringing in business.
“We need more retail,” he asserted.
The mayor did add, though, that even with the goal of expanding Berlin’s business appeal, the town did not want to lose its historic charm and become over-commercialized.“We’re perfect for some businesses, absolutely inappropriate for others,” he said.
The council voted to take the $135,000 out of its utility contingency fund.
While there was concern over tapping into the fund, Williams pointed out that it had been built up over the last few years to the over $500,000 balance it is this year. He also said that the rate case wouldn’t drain the reserve and hopefully, any money lost would be made up for in the future by attracting new business.