(March 24, 2016) Recent news coming out of Berlin’s electric utility has generally been upbeat, with the department receiving national recognition and a new contract, signed last week, promising lower bills in the near future.
The picture wasn’t always so rosy, however, as the department was once something of a black eye on the town.
During the middle part of the last century, controversy surrounding the electric utility was so great that a disagreement over whether to sell it led to the entire mayor and town council resigning, and being replaced in 1962 by John Howard Burbage and citizens who supported keeping it in place.
Burbage went on to be the town’s longest-serving mayor.
More recently, Berlin electric had been seen as a weak link in the town, because of unusually high electric bills.
“In roughly 10 years, it’s gone from something the community wasn’t sure they wanted to operate or have as an asset, to now being award-winning and cutting edge for a small, nonprofit utility,” Mayor Gee Williams said during an interview last Friday.
The town has always operated the way it does now, using existing infrastructure from another provider – currently Delmarva Power – and purchasing the actual power from an outside source. Today, Berlin buys in, along with more than 100 other municipalities, through American Municipal Power Inc. (AMP).
When Williams was first elected to the office as a town councilman, he remembers town workers being “more than a little discouraged” by conditions at the utility.
“They knew they were working hard, but the community rarely had good things to say about the utility,” he said. “The rates were uncommonly high, not just for the Eastern Shore or the Mid Atlantic, but for the entire East Coast.”
The electric market had changed dramatically, moving from an intensely regulated body to becoming “as deregulated as it could be and still be a utility,” Williams said. That shift changed both the way the utility operated, and the way in which it could purchase power.
“Making that transition into a whole new world – the town wasn’t ready,” he said. “You really can’t say it’s anybody’s fault. How are you supposed to know what’s going to be happening when an industry changes like that? Certainly, nobody sends you a roadmap.”
During the early part of the 21st century, Williams said the bidding process for buying power was still extremely time-intensive and cumbersome, with new power contracts taking weeks, and sometimes months, to complete.
At the time, Berlin was soliciting contracts for power just as they would for a new capital project, sending a request for proposals and receiving bids by mail.
“The town was still doing it the way it had been done for at least the previous 20-25 years,” he said. “We had to, literally, reorganize the way we did business to catch up to the changing dynamics of the market.”
Williams became interim mayor of the town in May 2008, after former Mayor Thomas A. Cardinale passed away. By August of that year, rising electric rates had caused a near crisis.
He called a town meeting at Berlin Intermediate School, drawing several hundred people, as town officials promised to “find a way out of this.”
“The first thing to do is not punt, and some people really wanted us to sell,” Williams said. “There was a big push [to do that].”
Instead, Berlin brought on North Carolina-based consulting and engineering firm Booth & Associates Inc. Previously, a local firm had advised the town, along with the Berlin Utilities Commission (BUC), a volunteer group of citizens who, Williams said, “had not kept up with the times.”
The local firm, on the other hand, was giving the town information that, at times, seemed impenetrable.
“We had meetings with the other engineering group, and when we’d get out we’d wonder, ‘what did they just say?’ It was so technical and, to my belief, convoluted,” Williams said.
After the first meeting with Dwight Davis from Booth & Associates, Williams said he was startled by the difference in approach. The firm came up with a short and long-term plan to drastically change the way Berlin addressed its electric utility, essentially bringing it into the new century.
“I said, ‘Dwight, you’re scaring us.’ He said, ‘really? Why?’ I said, ‘because we think we understand what you’re talking about.’ That made all the difference,” Williams said. “They visited our facilities, and when they looked at the way we were running things, they realized it was just outdated.”
Booth replaced the old firm, but the BUC stayed on until March 2011, when an ongoing rift with the advisory group grew too large to manage.
“All these recommendations we were receiving [from Booth] suddenly went into a black hole,” Williams said. “This went on for about a year or so. We had this sort of a standoff between what the electric utility consulting firm was strongly recommending we do – and do as soon as possible – and the Berlin Utilities Commission saying, ‘No, we do it our way.’”
The town, Williams said, “respectfully disagreed” with the latter’s advice.
“It was becoming a crisis, in my view, so I recommended, and had unanimous support from the council, to simply disband the BUC,” he said. “They’re good people, they were good people, they’re still good people as individuals, but that advisory committee’s time had passed.”
With the town working according to Booth’s advice, electric rates started to drop within three months. Williams said. The data backs that up, with the average residential bill decreasing 2.7 percent in 2011, and continuing that trend during four of the next five years.
Overall, the average residential bill has dropped about 20 percent in Berlin, since 2011, and more than 30 percent since 2008.
During the early days of the new and improved regime at the electric utility, Williams remembers presiding over a Town Council meeting and participating in a live power auction online, a nearly revolutionary step compared to what had been occurring.
“The idea of going from several weeks to do something, to just minutes – and we got such a much better deal even in a bad market – we knew we were on the right track,” he said.
In February, the Gazette reported that an error by Booth & Associates had cost the town more than $400,000. Berlin used $100,000 in contingency funds to cover part of that, but the remainder of the deficit was estimated to cost citizens roughly $2 a month over the next three years.
With everything Booth & Associates have done for the town, Williams said it’s important to keep things in perspective.
“They have saved us millions of dollars to our customers over the last several years,” he said. “They made one apparent error in judgment, but, even since then, they and American Municipal Power have given us wonderful advice.”
Earlier this month, the American Public Power Association recognized the electric utility for it reliability, placing in the top 25 in all municipalities in the nation, with outages averaging just 17 minutes.
Berlin has signed a new agreement with AMP, which begins in 2018 and runs for three years, and will save the average Berlin electric customer $9 per month.
Williams said Booth & Associates contributed information that led to that contract, and insisted the town would continue to use both its services, and AMP, in matters related to the electric utility.
“This latest contract was part of a transition and change that began eight years ago,” Williams said. “We’ve gone from some of the highest rates in the East Coast, to now some of the lowest – certainly the lowest in this whole Mid Atlantic region. I can hardly believe it myself.”
Moreover, he said the story about Berlin and Booth is not strictly one of dollars and cents, but that it’s a story of a relationship that was built on, and will continue to operate on, trust and mutual respect.
The picture wasn’t always so rosy, however, as the department was once something of a black eye on the town.
During the middle part of the last century, controversy surrounding the electric utility was so great that a disagreement over whether to sell it led to the entire mayor and town council resigning, and being replaced in 1962 by John Howard Burbage and citizens who supported keeping it in place.
Burbage went on to be the town’s longest-serving mayor.
More recently, Berlin electric had been seen as a weak link in the town, because of unusually high electric bills.
“In roughly 10 years, it’s gone from something the community wasn’t sure they wanted to operate or have as an asset, to now being award-winning and cutting edge for a small, nonprofit utility,” Mayor Gee Williams said during an interview last Friday.
The town has always operated the way it does now, using existing infrastructure from another provider – currently Delmarva Power – and purchasing the actual power from an outside source. Today, Berlin buys in, along with more than 100 other municipalities, through American Municipal Power Inc. (AMP).
When Williams was first elected to the office as a town councilman, he remembers town workers being “more than a little discouraged” by conditions at the utility.
“They knew they were working hard, but the community rarely had good things to say about the utility,” he said. “The rates were uncommonly high, not just for the Eastern Shore or the Mid Atlantic, but for the entire East Coast.”
The electric market had changed dramatically, moving from an intensely regulated body to becoming “as deregulated as it could be and still be a utility,” Williams said. That shift changed both the way the utility operated, and the way in which it could purchase power.
“Making that transition into a whole new world – the town wasn’t ready,” he said. “You really can’t say it’s anybody’s fault. How are you supposed to know what’s going to be happening when an industry changes like that? Certainly, nobody sends you a roadmap.”
During the early part of the 21st century, Williams said the bidding process for buying power was still extremely time-intensive and cumbersome, with new power contracts taking weeks, and sometimes months, to complete.
At the time, Berlin was soliciting contracts for power just as they would for a new capital project, sending a request for proposals and receiving bids by mail.
“The town was still doing it the way it had been done for at least the previous 20-25 years,” he said. “We had to, literally, reorganize the way we did business to catch up to the changing dynamics of the market.”
Williams became interim mayor of the town in May 2008, after former Mayor Thomas A. Cardinale passed away. By August of that year, rising electric rates had caused a near crisis.
He called a town meeting at Berlin Intermediate School, drawing several hundred people, as town officials promised to “find a way out of this.”
“The first thing to do is not punt, and some people really wanted us to sell,” Williams said. “There was a big push [to do that].”
Instead, Berlin brought on North Carolina-based consulting and engineering firm Booth & Associates Inc. Previously, a local firm had advised the town, along with the Berlin Utilities Commission (BUC), a volunteer group of citizens who, Williams said, “had not kept up with the times.”
The local firm, on the other hand, was giving the town information that, at times, seemed impenetrable.
“We had meetings with the other engineering group, and when we’d get out we’d wonder, ‘what did they just say?’ It was so technical and, to my belief, convoluted,” Williams said.
After the first meeting with Dwight Davis from Booth & Associates, Williams said he was startled by the difference in approach. The firm came up with a short and long-term plan to drastically change the way Berlin addressed its electric utility, essentially bringing it into the new century.
“I said, ‘Dwight, you’re scaring us.’ He said, ‘really? Why?’ I said, ‘because we think we understand what you’re talking about.’ That made all the difference,” Williams said. “They visited our facilities, and when they looked at the way we were running things, they realized it was just outdated.”
Booth replaced the old firm, but the BUC stayed on until March 2011, when an ongoing rift with the advisory group grew too large to manage.
“All these recommendations we were receiving [from Booth] suddenly went into a black hole,” Williams said. “This went on for about a year or so. We had this sort of a standoff between what the electric utility consulting firm was strongly recommending we do – and do as soon as possible – and the Berlin Utilities Commission saying, ‘No, we do it our way.’”
The town, Williams said, “respectfully disagreed” with the latter’s advice.
“It was becoming a crisis, in my view, so I recommended, and had unanimous support from the council, to simply disband the BUC,” he said. “They’re good people, they were good people, they’re still good people as individuals, but that advisory committee’s time had passed.”
With the town working according to Booth’s advice, electric rates started to drop within three months. Williams said. The data backs that up, with the average residential bill decreasing 2.7 percent in 2011, and continuing that trend during four of the next five years.
Overall, the average residential bill has dropped about 20 percent in Berlin, since 2011, and more than 30 percent since 2008.
During the early days of the new and improved regime at the electric utility, Williams remembers presiding over a Town Council meeting and participating in a live power auction online, a nearly revolutionary step compared to what had been occurring.
“The idea of going from several weeks to do something, to just minutes – and we got such a much better deal even in a bad market – we knew we were on the right track,” he said.
In February, the Gazette reported that an error by Booth & Associates had cost the town more than $400,000. Berlin used $100,000 in contingency funds to cover part of that, but the remainder of the deficit was estimated to cost citizens roughly $2 a month over the next three years.
With everything Booth & Associates have done for the town, Williams said it’s important to keep things in perspective.
“They have saved us millions of dollars to our customers over the last several years,” he said. “They made one apparent error in judgment, but, even since then, they and American Municipal Power have given us wonderful advice.”
Earlier this month, the American Public Power Association recognized the electric utility for it reliability, placing in the top 25 in all municipalities in the nation, with outages averaging just 17 minutes.
Berlin has signed a new agreement with AMP, which begins in 2018 and runs for three years, and will save the average Berlin electric customer $9 per month.
Williams said Booth & Associates contributed information that led to that contract, and insisted the town would continue to use both its services, and AMP, in matters related to the electric utility.
“This latest contract was part of a transition and change that began eight years ago,” Williams said. “We’ve gone from some of the highest rates in the East Coast, to now some of the lowest – certainly the lowest in this whole Mid Atlantic region. I can hardly believe it myself.”
Moreover, he said the story about Berlin and Booth is not strictly one of dollars and cents, but that it’s a story of a relationship that was built on, and will continue to operate on, trust and mutual respect.