New Power Supply contract accepted

Danielle Ryan

(11/22) During the November 1st Thurmont Town meeting, the Council discussed the new recommended power supply contract. The Town’s current power supply contract, held with Allegheny Energy Supply and First Energy Solutions (FES) will be expiring May 31, 2017. The current providers informed the town that they would not be able to decrease their rate or continue the existing rate due to the restructuring of the operating market. As a result of hearing this information, the town needed to find another provider.

The city of Hagerstown, the town of Thurmont, and the town of Williamsport met to discuss a new wholesale power supply contract. This decision needed to be completed before the end of November 2016. These towns have worked together successfully for years, and this time they grouped together to find the most cost effective power supply service available to provide the residents with the lowest purchase power cost.

After receiving interest from thirteen different providers, the towns narrowed the list down to a final five and then a final three: FES, Washington Gas and Light (WGL), and Public Service Enterprise Group (PSEG). These three service companies were reviewed and then the towns requested these companies provide them with pricing for a five year contract term.

After this request was sent, FES and PSEG brought contracts with relatively similar prices to the towns. WGL was deemed non-responsive to the price request. FES, however, left a separate offer on the table: they would utilize the existing contract and remove all future risk of market fluxuations for the five years they would be in contract. By utilizing the existing contract, the town would not have to spend extra time and money on the logistics of formulating brand new language for a similar contract. The price FES presented was $51.60 per megawatt-hour, and PSEG priced their contract at $52.42 per megawatt-hour. The current contract is costing customers $51.65 per megawatt-hour.

The contract will be able to be renewed, or be requested to be renewed after the five year contract terminates.

After reviewing the information provided, it was recommended that the Council choose to accept the contract with FES. The newly accepted contract will go into effect on June 1, 2017.