RSS Feeds
“Perkasie First” group concerned with rise in electric rates
May 19, 2010
Photo by Andy Stettler
By Emily Morris
Managing Editor
Three years ago, a group of Perkasie Borough residents upset about the cost of the new Menlo Aquatic Center and other issues in town gathered together under the name “Perkasie Pride.”
They put up a slate of four candidates, all of whom were elected and currently sit on council. Two years later, they repeated the process with a slate of five more candidates, all of whom were elected to council in the fall of 2009. At least four of the candidates, current Councilors Marty Gahman, Rich Hendricks, Jim Purcell and Maria Slowik, had been on council in the past for varying lengths of time and at various points in time.
Now, another group of residents appears to be equally disappointed with the current council’s governance, including its signing of an electric contract that brought the borough residents a 59 percent increase in electric rates over the past two years.
That group, which calls itself “Perkasie First,” has started a slow rumble in the town that has residents gathering on a biweekly basis for its meetings at Perkasie Pizza and Pasta, a restaurant in the center of the borough. The group last met May 10, according to a flyer handed out to area residents, and generally meets on the second and fourth Mondays of the month at 7:30 p.m. at the restaurant, the Mondays when borough council does not meet.
Timeline: A History of the Perkasie Borough Electric System
(Hover mouse over dots to reveal dates. Click dots forshort description and full story options.)
Starting a movement
Former council members Harry McGonigal and Eadie Burke have both admitted helping the group out, but both say they’re just background players and not active members or leaders of the group.
“I was contacted by a resident who wanted to start a taxpayers group against the high electric rates,” Burke said in a Facebook message when asked about her link to the group. “I told him that I would help him and guide him but do not want to be in the forefront.”
“I support what they’re doing, but I’m twangin’ the guitar here,” said Harry McGonigal, who said he’s more focused on his post-political music career. McGonigal said he does attend the meetings, but that other residents have taken the lead.
Both Burke and McGonigal left council at the end of 2009 when their terms expired; neither had sought re-election at the time and both were absent regularly from meetings in the final months of their term. While on council, however, both voted against the current electric contract and the replacement of the borough electric consultant, saying they felt it was not in the best interests of the borough.
According to a flyer sent out by the Perkasie First group, its primary concern is electric rates, with the flyer claiming the borough planned to continue to increase electric rates for the next five years. Perkasie Borough Manager Dan Olpere said he’s unsure where those numbers are coming from.
“There’s no plans to raise that up,” Olpere said.
Borough Council President Marty Gahman emphasized that at council’s May 17 meeting.
“I had an e-mail suggesting the fact that council is going to raise electric rates every year between now and 2015, and that is not in our plans,” Gahman said.
Gahman said the controversial two-year extension of the borough’s current five-year electric contract with AMP-Ohio was designed to minimize future rate increases by stabilizing prices.
“We also took efforts last year in working with AMP of Ohio, and our electric consultant, to, in fact, level out the wholesale price so, in fact, we wouldn’t have to increase rates any further.”
Still, the group is unhappy with the 59 percent retail electric rate increase that came — 42 percent in late 2008 and another 17 percent in late 2009 — with the latest contract with AMP-Ohio.
Documents Concerning the Perkasie Borough’s Electric System
(Hover mouse over dots to reveal dates. Click dots and time-span markers for short description and full story options.)
Resident concerns
Wade Fulp, a borough resident who recently started attending both Perkasie First and borough council meetings, said he feels the residents are trapped by the current contract, which through a two-year extension on a five-year contract will now last through 2014.
“Well, watching my electric bill increase, a lot, certainly got me interested in the topic,” Fulp said in an e-mail to the News-Herald. “I’ve been cutting back on electric use the best I can, but my bill keeps going up due to the rate increases.”
Fulp said his current electric bill is generally between $240 to $300, but he’s heard that some residents’ and businesses’ bills have mounted as high as $500 to $800.
“Should people have to pay what is equivalent to a month’s rent, or a mortgage, for their electric?” Fulp said via e-mail. “It is out of control, and my fear is it will drive people out of Perkasie, either by choice, or due to foreclosures on their homes, leaving those who are left to pay even more to support the town.”
Andrew Rumbold, another resident of the borough, said he’s been to just one Perkasie First meeting after a neighbor told him about the group.
“I just started really looking back on some of what happened,” Rumbold said. “It just doesn’t make sense to sign a contract like they did.”
Rumbold said he questions why the borough would have signed a contract in mid-2008, when it had seven months left in the year, if it could have waited to see if rates dropped.
“Either the people that negotiated and signed that contract for the borough were completely inept or there was something exchanged under the table for that,” Rumbold said. “There’s no other reason why they would have signed a contract in the height of the season when the previous consultant [Bob Romancheck] had said ‘wait, we have seven months left.’”
Rumbold said he noticed his electric bill had increased to about $200 a couple months ago, despite the fact that most of his house is run on natural gas.
“Our whole house is gas, our heat, our hot water, our dryer, our cooking, all the major electric usages in our house are gas,” Rumbold said, noting he uses fluorescent bulbs and dimmers to keep costs down as well. “I’m just trying to figure out why it costs me $200 just to keep my lights and TV on.”
Justin Stottlar, who McGonigal referred to as a leader of the group, would not comment when asked about his involvement with the group, saying he did not want to speak with the News-Herald because he felt it was biased toward the borough council and did not report issues fairly.
“We’re looking to get our story and out and get the truth out,” Stottlar said.
However, Stottlar has voiced his concerns on the News-Herald’s facebook page.
“The question I would have for the borough and more importantly the council is why do they not take responsibility for this botched electric contract,” Stottlar wrote May 12. “I have heard excuses from they were looking for stability to the price of energy was high and our previous rates were artificial. None of these excuses are gonna work.”
Stottlar, too, said the five-year contract with a two-year extension was “poor management and budgeting and I believe someone in the borough is benefiting from this bad deal.”
Stottlar called for the borough to admit its mistake and cut spending, “starting with the wages some of our employees in the borough get paid.”
The Middletown Model
McGonigal said the Perkasie First group is similar to a movement that occurred in Middletown Borough, outside Harrisburg, where a similar group formed after that borough was faced with sharp electric increases under a new contract with AMP-Ohio, the same organization contracted with Perkasie, along with other spending that some residents felt was out of control.
John Patten, a former Middletown councilman who served as the president of Middletown Citizens for Responsible Government, said that group formed approximately 18 months ago and created a formal Political Action Committee.
That group’s primary concerns were the new rates under the contract with AMP-Ohio, and also the borough manager joining the Pennsylvania Municipal Power Authority, a relatively new organization designed to help its member municipalities that own electric systems with savings on wholesale electric purchase and exploring options for other savings such as alternative energy sources.
“In Pennsylvania, municipalities cannot invest in power generating plants,” Patten said.
“By creating this authority, it was basically circumventing that,” Patten said of resident concerns about the PMPA.
Perkasie Borough looked at joining the group, but opted to instead just monitor its progress over time because of a concern about any possible financial obligation to the agency for participating in projects.
There were other issues in town, Patten said, where residents were looking for cost savings too, including a $328,000 annual cost to run a communications center that was duplicating a service that could have been covered by the county there.
Additionally, Middletown had created an “electric operating fund,” Patten said, that put $1.3 million in profits in a fund each year, which was designed to help offset the tax increases in that borough.
“The rather interesting part of it is, since we’re not doing that anymore, we still haven’t raised taxes,” Patten said. “That’s not in operation anymore and yet we haven’t raised taxes. That issue is being looked into still while we do an audit trail on all of that.”
In the end, the Middletown PAC put a slate of six candidates up for borough council, five of whom were elected, Patten said, and one of whom was appointed council president. The town also got a new manager after the borough manager resigned. The PAC has since dissolved, but could be born anew for the next election, Patten said.
“I think we’ve accomplished a good deal, we were quite satisfied with the outcome of the election and the current direction the board is taking,” Patten said.
It also got up to about 125 people interested in their local government, Patten said, many of whom have stayed involved on some level.
Patten said two members of his group did meet with people in Perkasie when the group was active in the past, but that he was not a part of the meeting. Other than that, he said he’s unfamiliar with Perkasie’s situation.
No member of Perkasie First has indicated plans to run for office, but Burke did say in a Facebook message the group planned to file to become a Political Action Committee.
Borough Businesses
Another issue raised regularly by residents is the concern that the electric rates may cause businesses to leave the borough and result in increased rates for the businesses and residents remaining.
Scott Linaberry, whose wife owns Stardust Ceramics on Fourth Street in Perkasie, said he has found the rates not to be fair compared to other electric providers.
“We’re going to close if something doesn’t happen,” Linaberry said.
“The point is if businesses can’t afford their electric, they’re gonna leave,” said Rumbold, who said businesses were among those concerned at the one Perkasie First meeting he attended. “Where does it end? Is the borough trying to force businesses out?”
Linaberry said his wife’s business pays approximately 22 cents per kilowatt hour. While she operates a kiln to fire the ceramics, he said that using a device that measures electric watt usage, he found that the heat in his wife’s store is causing the biggest issue, not the kiln. In particular, it drives the demand price — an extra charge placed on commercial customers of the borough’s electric company — above the 3 kilowatts allowed before the demand charge goes into effect.
“I think it’s just running businesses out of town,” Linaberry said.
Linaberry also runs an auto shop in Chalfont, where he said he generally pays close to 12 cents per kilowatt hour to PECO.
Borough officials explained to Linaberry that the borough’s electric contract is not subject to the same rate caps and controls put in place by the Pennsylvania Public Utility Commission, which put caps on electric rates for utilities it controlled after opening the generation of electric to competition and leaving the transmission and distribution component unregulated.
However, those rate caps have started to come off now, as they were only to last a set period of years depending upon utility. While the rate caps were never mandated in Perkasie because it is not controlled by the PUC, it ultimately affected the borough, which buys power in the same market as the other utlities.
“The same market forces that will lift the rates for PUC controlled utilities are already in effect in Perkasie,” states a section of the borough’s website dedicated to explaining the rate caps. “Experts in the field tell us this is due primarily to nationwide increased demand and no new generating capacity becoming available. In short, supply and demand is driving up costs.”
Linaberry said he talked to PECO to see what its expected rate increase might be after the rate caps come off for that company and was told the company expected it to increase between 11 percent and 15 percent.
Borough Manager Dan Olpere said only one business owner told him the business was closing because of high electric rates, and that he was aware of other financial issues in that instance.
Linaberry said he has spoken with business owners who were considering leaving due to the increase, however.
Olpere said the borough is constantly working to encourage business within the community, including, for electric concerns, the borough electric department offering a program to help businesses measure their electric use more carefully — monitoring demand very closely throughout the day over a 30-day period to see if the business can take steps to reduce demand and thus its overall bill.
Linaberry said he had requested the service at his wife’s business, but had not yet had the borough install the special load-profiling meter that allows it to track more detailed usage and prepare a report for the business owner.
Think we missed something? Comment below or e-mail our reporter at emorris@montgomerynews.com and we’ll continue to report on this issue over time.
5 Responses to this article
Leave a Reply
E-mail Newsletter Signup
Get our news delivered to your inbox.
[...] “Perkasie First” group concerned with rise in electric rates [...]
[...] The Q-and-A session of the meeting served as a news meeting where residents requested stories on the local electric rates and the community’s pay-as-you-throw trash collection system. Reporters and editors still did [...]
[...] to videos, digital journalists looking to create sleek multimedia story packages may also have a timeline and a couple of local documents to supplement a story. Embedr is just one of the free tools [...]
[...] The Q-and-A session of the meeting served as a news meeting where residents requested stories on the local electric rates and the community’s pay-as-you-throw trash collection system. Reporters and editors still did the [...]
[...] The Q-and-A session of the meeting served as a news meeting where residents requested stories on the local electric rates and the community’s pay-as-you-throw trash collection system. Reporters and editors still did the [...]