By Tara Fischer

Staff Writer

(Oct. 23, 2025) Consumers in the Town of Berlin should expect their electric bills to increase early next year, after the Town Council last week approved a new energy contract to secure the municipality’s power supply through the end of the decade.

Craig Kleinhenz, vice president of power supply planning from American Municipal Power (AMP), a nonprofit energy agency that buys power on behalf of more than 130 municipal electric systems, was present at the Oct. 14 mayor and Town Council meeting.

He informedthe governing body that two main electricity contracts expire at the end of 2025, requiring the town to lock in new agreements. These updated deals will result in higher costs.

To ensure that electricity continues to flow to the town’s consumers, AMP recommended that the municipality approve a new “requirements deal,” which will supply 52% of the municipality’s energy needs at a cost of 7 cents per kilowatt hour ($70 per megawatt hour), an increase from the current contract’s fee of 3.5 cents per kilowatt hour ($35 per megawatt hour). That existing agreement was purchased in 2020 and extends through the end of 2025.

Kleinhenz said that his team will have the authority to buy this updated deal through 2030, but the energy agency will commit only to 2026 and 2027 at this time. They may secure the remaining years if favorable pricing becomes available. The representative said that this plan allows the town to secure stable rates while remaining flexible if market conditions improve in the next few years.

The requirements deal guarantees that Berlin’s power needs will be provided at a fixed rate, even during peak demand. Officials maintain that while the new contract will nearly double wholesale costs, it protects the town from extreme market volatility, like spikes that may occur on hot summer days.

“The nice thing about this contract is that it will provide exactly what you need, at a fixed price,” Kleinhenz said. “So, if it’s a really hot day in the summer where the air conditioners are working really hard and the price of power is really expensive, it provides that as $70 per megawatt hour. To give you an example, this summer, we saw prices over $1,000 per megawatt hour. On a day like today, the market’s closer to $50 per megawatt hour. This contract, instead of buying from the hourly market at $50, you’re buying it at $70, but it’s providing you with that certainty that in those really expensive times, you guys have protection from that.”

AMP is also preparing to purchase power through a second contract, set to run through 2028, for around 5 cents per kilowatt hour, or $51 per megawatt hour. That agreement is expected to be underway within the next few weeks and is an increase from the current deal of 4.5 cents per kilowatt hour.

Kleinhenz added that Berlin will continue purchasing renewable energy at a fixed price from Blue Creek Wind Farm in Ohio through a contract that will expire at the end of 2029.

With the two updated contracts outlined by Kleinhenz, AMP estimates that the town’s overall wholesale power costs will increase from 6 cents to 7.7 cents per kilowatt hour. For consumers, that will translate to about a 2.5 to 3 cent per kilowatt hour rise on electric bills beginning in January 2026.

Berlin Mayor Zack Tyndall said that staff will compile information on how that will exactly shake out on residents’ statements, to be soon communicated to the community.

Officials emphasized that while customers will be hit with the price hikes, Berlin’s rates will remain below neighboring utilities such as Choptank Electric and Delmarva Power. The AMP representative attributed these rising energy costs to increasing natural gas prices, growing demand, and other factors.

“It’s good news and bad news,” Kleinhenz said. “Bad news is that there is an increase. The good news is, it’s a lot less than it could be. You guys are definitely below the surrounding areas, but that doesn’t take away from the pain of an increase.”