Berwick Electric adding up rates, savings

BY SARA KEDDY

Kings County Register

Berwick Electric is looking for a rate hike after the first study in three years recommended a $425,000 surplus should be kept on hand.

“Is there a guideline that $300,000 would be enough, or $600,000 would be too much?” commissioner and Berwick Councillor Don Clarke asked at the August 23 meeting.

“Can we get there too quickly?”

The study recommends a 2.55 per cent across-the-board increase. Berwick Electric has had rate increases in the past years to pass on the cost of supplier Nova Scotia Power’s increases, but nothing to cover its own fixed costs and savings.

“We’ve been trying for 10 years to get there,” said utility superintendent Don Regan of the $425,000 surplus goal for the next two years.

“It’s to handle the weather, the turnover of receivables and contingencies,” said accountant Mike MacLean. “Our accumulated surplus has not been where it should be in at least the last two rates studies.”

MacLean said a 2.55 per cent rate hike is “not a bad result.” It still leaves Berwick Electric customers with an estimated 12 per cent savings compared to Nova Scotia Power users, and it generates a six per cent rate of return for the utility (compared to Nova Scotia Power’s nine per cent, paid out to shareholders), one per cent of which is a dividend to the Town of Berwick.

Utility commissioner John Rainforth said, if the $425,000 surplus goal is achieved and any more would found to be unreasonable, the utility could then reduce rates or increase the town’s dividend.

The rate study looked at the 2007/ 2008 utility budget and goes out another fiscal year, but Regan said he expects a future rate study “could look completely different.” The utility has already started efforts to promote energy conservation among its customers, with a June energy fair and CFL lightbulb giveaway, several studies underway in partnership with the new fire hall and Apple Dome community facility construction projects and alternative energy options.”If you think about the effects of conservation, the people who embrace changes will save money; the people who don’t will be hit with a double negative bill” - a higher share of continuous fixed costs and, likely, higher costs for electricity.

“We don’t want to reduce our sales to the point we don’t cover our fixed costs,” Mayor and utility chairman John Prall said.

The rate hike request was approved by the Berwick commission and now goes on to the Nova Scotia Utility and Review Board for hearing and a decision.