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Will possible changes to electric rates, providers hit your wallet?: Editorial

Posted 1/17/18

If you read the Jan. 3 edition of the Press & Journal, you likely saw a pair of stories by our Dan Miller involving a lawsuit over electricity providers and potential state regulations involving …

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Will possible changes to electric rates, providers hit your wallet?: Editorial

Posted

If you read the Jan. 3 edition of the Press & Journal, you likely saw a pair of stories by our Dan Miller involving a lawsuit over electricity providers and potential state regulations involving the transfer of money from municipal electric funds.

If those topics sound boring, bear with us. Because these issues directly affect you if you live in Middletown.

The lawsuit involves Librandi Machine Shop, which straddles the Middletown-Lower Swatara Township border at Harrisburg International Airport.

The company is seeking to stop having to buy electricity from Middletown in order to begin buying power from Metropolitan-Edison. 

Librandi in its suit contends it has paid $1 million more to Middletown in “excessive fees for electricity” than it otherwise would have, had the company been buying power from Met-Ed and had Librandi been able to shop for an electric energy provider under the Electricity Choice and Competition Act of 1996.

What if Librandi wins the suit? Two things could happen. One, the rest of the Middletown customers might have to make up the loss of up to an estimated $500,000 in revenue that the borough gets each year from Librandi. And two, it might set a precedent that would allow Middletown residents to shop around for better electricity rates, which they can’t currently do because municipalities with their own electric services are exempt from the competition act.

How those two things affect your rates is yet to be seen.

The proposed state legislation also could have a big impact on Middletown.

Each year, the borough uses a big chunk of the money it gets from selling electricity to residents and businesses to help cover the cost of providing services like police, taking care of roads and parks, etc.

Doing so allows the borough to keep providing these services without having to raise the property tax. The borough has not increased that tax since 2008, although council came very close to raising the tax by 0.5 mills for 2018.

In total, council is transferring $1.6 million from the electric fund to the general fund in 2018, an amount equal to raising the property tax by 6.5 mils. This is nearly a yearly event.

A hearing is to be held in February on legislation state Rep. Aaron Bernstine has introduced, that would make it illegal for Middletown and the 34 other municipalities in Pennsylvania that sell electricity from using any of the money received from selling power to help cover the cost of providing services.

Again, how this would affect you isn’t certain, but there would be an effect. Either services would be cut or your property taxes would go up. However, if your property taxes go up because the borough needs more money, would your electric rates go down because the borough no longer can transfer money out of that fund, and they will look more closely at the rates being charged?

Would you rather pay higher property taxes or electric rates? It probably depends on what property you own.

It’s hard to say.

There are questions to be answered, and we will continue to report on both these issues to try to answer them for you.