‘Power’ ful gesture is unanimous

By on April 16, 2014

 Power charges surged this past winter as the region weathered through a sustained cold period unlike anything seen in recent years.


For most power customers, the problem was compounded both by increased metered usage as well as increased costs.


However, Ephrata Borough is one of only a few who purchase electrical power for resale to its residents. And, according to council member Tom Reinhold, what the borough spent on electric in January was almost double what was budgeted. In fact, that difference created a shortfall of over $600,000.


But as indicated last week, those additional costs will not be passed on to the customers.


At Monday night’s voting session, council voted unanimously to authorize an unbudgeted expenditure from the unallocated balance in the Electric Fund to the amount of $656,186.09. Additionally, this amount will be excluded from any calculation of the power cost adjustment (PCA). The vote was taken as a roll call vote, with all members voting yes.


Municipal Enterprises chair Reinhold had previously reported that the $656,000 cost overrun could be considered due to excessive transmission cost coupled with exorbitant market prices encountered when the borough had to buy power on the open market in excess of what had been pre-purchased according to plan.


Borough Manager Bob Thompson concurred.


“We maintain a fund balance in the Electric Fund for extraordinary events, such as a major hurricane or ice storm,” said Thompson. “In this case, the extraordinary event wasn’t snow, it was the prolonged period of cold temperatures.”


Thompson added that the problem was compounded by other extraordinary circumstances, including a nuclear power plant in Western Pennsylvania which had to be taken off line as well as the borough’s actual power demand exceeding what had been pre-purchased in earlier contracts. This in turn forced the borough to make up the difference with power purchased on the open market, which was at a considerably higher price due to overall conditions.


Council members have in the past explained that a key benefit of the borough owned electric utility is that the profit element of power rates stays within the borough. From those fund balances, then, the borough can fund such circumstances deemed extraordinary.


“If we were served by an investor-owned utility there would be no question that all of the shortfall would be passed through to the customer,” added Thompson. “Because we are a public power provider and the utility board (borough council) lives in the community and are rate payers themselves they can consider the economic impact on the customers and make decisions accordingly.”


Reinhold addressed the two concerns raised following last week’s story in the Ephrata Review on the topic. He credited the borough’s Tom Natarian for doing considerable research into how Ephrata power rates stack up against other providers.


“Using PPL’s cost to compare, a person using 1200 kwh pays $157.75,” stated the Natarian Report. “In Ephrata;, a person using 1200 kwh pays $159.86. For a difference of $2.11 or 1.3 percent.”


Natarian also compared Ephrata versus other fixed rates on PA Power Switch, which he noted are likely to go up in the next 6-12 months, whereas rates in Ephrata have not changed since 2009. He found that 58 companies offer a fixed rate. Of those companies, 38 (66 percent) had rates higher than Ephrata. Thirteen (22 percent) of the remaining 20 had two percent or less difference. Four of the remaining seven were offering teaser rates for six months or less. Of the remaining three, many offered one-to-three year fixed-rate options, with a $100 cancellation fee.


In all his comparison study, Natarian pointed out that none of the customers with other power companies would save more than $10 per month. He also pointed out that Ephrata boasts an impressive record of reliability.


Council member Bob Good commented on council’s move.


“From my experience living in many different communities, from big to small, I have never seen anything like this before, ever,” said Good of council’s move to absorb the cost overruns. “I felt that was pretty special.”


Tina Thompson attends council meetings somewhat regularly and is not afraid to hold members’ feet to the fire, so to speak. For her part, she was significantly impressed with the move.


“I like to give credit where credit is due,” said Thompson. “I’d like to thank the borough. Looking at the whole picture, for the 12 years I have lived in the borough, I can count perhaps only twice the power went out, briefly, and I never lost any food as a result of it. I appreciate that this is not being pushed onto us. February our bill was the highest ever, yet as a resident I say ‘thank you.’”


In other borough news, Lancaster Mayor Richard Gray was council’s guest speaker for the Municipal Moment, where he detailed his city’s efforts to develop an ordinance to deal with nuisance renters and their landlords. A similar ordinance for the borough has returned to committee for further consideration.


Mayor Ralph Mowen announced that Ephrata had been named a “Tree City USA” by the Arbor Day Foundation. In his comments in conjunction with his Arbor Day proclamation, Mowen read a press release which congratulated the borough for meeting numerous requirements for the honor. He also thanked Shade Tree Commission chair George DiIlio, who was present, for his efforts in revitalizing the Commission.


And finally, Thompson reminded the public of an important meeting this Thursday, April 17 at 6 p.m. in borough council chambers to discuss design of the new skate park planned for the area adjacent to the Ephrata Public Library. For the past several weeks, borough officials have been strongly encouraging those local youth who would use such a park to come to this meeting to provide their input into the final design.


For additional information on Ephrata Borough, visit ephrataborough.org.


Gary Klinger is a correspondent for The Ephrata Review. He welcomes your questions and comments and can be reached via email at klingerglobal@gmail or via Twitter, www.twitter.com/gpklinger.



One Comment

  1. Robert Wasneuski

    April 16, 2014 at 4:11 pm

    When will this ” mirage ” finally cease & the total truth & factual reality be written & acknowledged ? This benevolent gesture on boro councils behalf while thankful is the expected immediate solution taken to offset the 650K ” loss ” effected by speculative energy purchasing & investment with AMP Ohio & if I had my right of choice & had my power elsewhere my money would not be at stake.They are rolling dice with our money & putting us on risk as collateral & rolled ” snake eyes “…What about the next loss should we lose again ? What then should that electric fund ( surcharged rates / hidden tax ) we already paid to the boro & now depleted substantially ? Would that same ” gesture ” be the call ? I think NOT.Without debating about who is cheapest & what market tricks may be employed by various vendors the total truth & factual reality is that the boro is operating a “de facto ” monopoly which is wrong.They are suppressing our legislated right to choose our electric provider hostage & forcing us to purchase power at surcharged rates above what we could otherwise purchase ourselves & not also be paying additional “PCA” adjustment charges whenever their spending warrants more unaccountable revenue ( hidden tax ). We also would not be exposed to another missed projection or adverse overrun as they call it effected by waging & gambling with our money in the speculative future energy investment market.We lost 650K we otherwise would not have if we had our legislated right to choose.I commend the boro for their spirit & I am sure for many otherwise good intentions on our behalf however thats not what our local government should be doing.I feel I can manage my money & make life quality improvement decisions as I see fit.That should be the issue at hand…Its every citizens right to choose & the boro is supressing that right while also conducting a “de facto ” electric distribution & retail monopoly thats just lost 650K.We need to lay “all” the cards on the table so that people whose money is being wagered have the total facts & truths to make informed decisions for the future..

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