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Librandi gets partial victory in suit that would allow it to stop buying power from Middletown

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 2/18/20

Librandi Machine Shop has won a partial victory in its long battle to stop buying electricity from Middletown borough and to start buying from Metropolitan Edison.

Now the next big decision: Where …

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Librandi gets partial victory in suit that would allow it to stop buying power from Middletown

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Librandi Machine Shop has won a partial victory in its long battle to stop buying electricity from Middletown borough and to start buying from Metropolitan Edison.

Now the next big decision: Where is Librandi located?

Librandi’s address is 93 Airport Drive, on Harrisburg International Airport property. It contends that if part of its facilities are located within Lower Swatara Township, Librandi has the legal right to receive service from Met-Ed, according to a Feb. 11 decision by Pennsylvania Public Utility Commission Administrative Law Judge Andrew M. Calvelli.

Lower Swatara is in the Met-Ed service territory.

Librandi contends that it is paying too much for electricity from Middletown compared to Met-Ed, because, according to Librandi, the borough sets its electricity rates artificially high so that the borough can use electric revenue to subsidize the general fund budget each year in order to avoid raising taxes.

Calvelli’s ruling states that Librandi obtaining electric service from Met-Ed would not result in “impermissible competition” between Middletown borough and Met-Ed.

Calvelli also ruled that Librandi obtaining electric service from Met-Ed would not result in “the unnecessary duplication of utility facilities” between the borough and Met-Ed.

However, the PUC denied Librandi’s request for a declaration that Librandi is located within Met-Ed’s service territory.

Instead, the PUC kicked this matter back to the Dauphin County Court of Common Pleas, Calvelli saying in his ruling that “the issue of determining Librandi’s geographic location lies within the exclusive jurisdiction of” the county court.

In other words, as Calvelli put it elsewhere in his 33-page ruling: “Simply stated, the parties are in near total disagreement as to the most central issue in this case, i.e., where Librandi is actually located.”

If Librandi can go back to county court and get a court determination that Librandi is within Met-Ed’s service territory, Librandi will be permitted to file a new action with the PUC seeking relief that could lead to being able to make the switch from Middletown to Met-Ed, according to Calvelli’s ruling.

The dispute began in Dauphin County Court in 2016, when Librandi sued Middletown seeking to compel the borough to agree to the switch so Librandi could buy power from Met-Ed.

Librandi in the 2016 suit said that it has paid $1 million more to Middletown in “excessive fees for electricity” than Librandi otherwise would have, had the company been buying power from Met-Ed.

Librandi in the suit also contends it would have spent far less in electricity had Librandi been able to shop for an electric energy provider under the Pennsylvania Electricity Choice and Competition Act of 1996.

Residents and businesses in Middletown are not allowed to shop for an electric energy provider.

Middletown is one of 35 municipalities in Pennsylvania — all boroughs — that provide electricity to residents and businesses within their borders.

Middletown officials have long contended that the rates Middletown charges customers for electricity are competitive with the rates charged for electricity elsewhere in the region by private utilities such as Met-Ed and PPL.

In February 2018, the case was transferred from Dauphin County Court to the PUC, after county court said it did not have jurisdiction to decide from whom Librandi can buy power.

Calvelli in his ruling noted that Middletown argues that Librandi’s machine shop is located “entirely” within Middletown, and that the borough therefore has “the exclusive right to provide electric service to Librandi.”

But lawyers for Met-Ed argue that the PUC lacks jurisdiction to determine “the location of Librandi’s Middletown plant in relation to the borough of Middletown and Lower Swatara Township,” according to Calvelli’s ruling.

Librandi argues that the actual boundary of Middletown borough has not been “clearly established” during the dispute, and that “all witnesses” agree that Librandi “is at least partially located in Lower Swatara Township … on property owned by the Susquehanna Area Regional Airport Authority.”

According to court documents, Met-Ed provided electrical service to Librandi from March 1994, when the machine shop opened, to early 1997.

In early 1997, Middletown approached Librandi offering to sell electricity at a cost “significantly below” the rates being charged by Met-Ed. Met-Ed initially resisted the switch, contending that the airport property was Met-Ed’s exclusive territory under an agreement executed between Met-Ed and the Air Force in the 1920s or 1930s, according to lawyers for Librandi.

But Met-Ed eventually relented, and Middletown began providing service at a below market rate to Librandi for about two years, until a court settlement between the borough and Met-Ed did away with Middletown’s favorable rate.

Librandi in the lawsuit contends that Middletown officials at that point pledged that the electric rate would only go up “one cent per kWh (kilowatt hour) over the next 10 years. Instead, Middletown steadily raised its rates on its commercial customers until its rates reached levels almost two times those of Met-Ed.”

The amount of money the borough would lose in electricity revenue from Librandi each year is in the hundreds of thousands of dollars. It is unclear how that might affect how much other ratepayers in the borough pay for electricity.

Mayor James H. Curry III in October 2019 estimated electricity revenue from Librandi at about $200,000 a year. However, the borough has previously estimated the amount as as high as $500,000 a year.

Further, Curry has said that if Librandi wins, virtually every major commercial and industrial customer in Middletown will seek to choose from whom they buy power, and if the borough contests these lawsuits, it will lose.