TO SELL OR NOT TO SELL
After attending the Town's presentation on the sale of the power plant and its infrastructure last Tuesday, I'm more confused then ever. Some questions:
1) Why all the secrecy for the last couple years? Why wasn't this hearing made before negotiations with potential buyers began?
2)The electric industry was deregulated (partially) a few years ago, yet state lawmakers prohibited rates from rising until now. Rates will go up for the next couple years, presumably because costs have risen for the power companies. If the Berlin plant's costs are relatively stable, would not Berlin make even more money in the future on the sale of electricity?
3) And #2 begs the question: What is the percentage of Berlin's generation cost that is related to the cost of fuel?
4) An insurance settlement for the failed Mitsubishi was mentioned. How much money does the Town anticipate from this insurance?
5) California just voted to place severe restrictions on power generation that contributes to global warming. Maryland is contemplating this also. The major cost of this effort is borne by coal-fired plants, such as those that provide most of the power for Old Dominion, which sells its power to Choptank. If Maryland passes such a law, electric rates will again rise dramatically. Berlin, however, has the ability to switch fuels. Soy biodiesel has much lower CO2 emmissions. If Berlin made this switch, at least partially, would not it be in an even better competitive postion?
6) I listened to Mr. Gee Williams read his wish list for the Town, projects that he said could be funded if the bond debt for the power plant were retired. First on his list was an expansion of the sewer plant. So I suppose the town will replace the utility debt with sewer debt. Mmmmm. The utility at least generates money. But from everything I know, a large increase in sewer will lead to a large increase in development, and more development, especially in suburban sprawl, always leads to higher taxes, simply because all those newcomers require more services. A small increase in sewer capacity may be appropriate, to allow completion of projects already in the pipeline, but do the people of Berlin really want to be surrounded by more Decatur Farms?
1) Why all the secrecy for the last couple years? Why wasn't this hearing made before negotiations with potential buyers began?
2)The electric industry was deregulated (partially) a few years ago, yet state lawmakers prohibited rates from rising until now. Rates will go up for the next couple years, presumably because costs have risen for the power companies. If the Berlin plant's costs are relatively stable, would not Berlin make even more money in the future on the sale of electricity?
3) And #2 begs the question: What is the percentage of Berlin's generation cost that is related to the cost of fuel?
4) An insurance settlement for the failed Mitsubishi was mentioned. How much money does the Town anticipate from this insurance?
5) California just voted to place severe restrictions on power generation that contributes to global warming. Maryland is contemplating this also. The major cost of this effort is borne by coal-fired plants, such as those that provide most of the power for Old Dominion, which sells its power to Choptank. If Maryland passes such a law, electric rates will again rise dramatically. Berlin, however, has the ability to switch fuels. Soy biodiesel has much lower CO2 emmissions. If Berlin made this switch, at least partially, would not it be in an even better competitive postion?
6) I listened to Mr. Gee Williams read his wish list for the Town, projects that he said could be funded if the bond debt for the power plant were retired. First on his list was an expansion of the sewer plant. So I suppose the town will replace the utility debt with sewer debt. Mmmmm. The utility at least generates money. But from everything I know, a large increase in sewer will lead to a large increase in development, and more development, especially in suburban sprawl, always leads to higher taxes, simply because all those newcomers require more services. A small increase in sewer capacity may be appropriate, to allow completion of projects already in the pipeline, but do the people of Berlin really want to be surrounded by more Decatur Farms?
posted by spencer at 12:21:00 PM
0 comments
