Bucks County Herald

Quakertown signs new deal for electricity

JOE FERRY

Quakertown recently signed a new agreement with its electricity supplier that should result in about $4.4 million in savings over the next decade.

But borough officials do not expect the new deal to result in lower costs for its power customers.

Instead, said Borough Manager Scott McElree, the new contract will mitigate what likely would have been rate increases over the next few years.

“We haven’t had a rate increase since 2010,” said McElree. “But at the same time, our costs have been going up.”

Like a handful of municipalities around the state – Perkasie and Lansdale are two local examples – Quakertown purchases electricity at wholesale rates and then resells its at a profit to borough customers, both private and commercial. The excess revenue is used to fund borough operations.

It is one reason the borough has been able to maintain its unusually low property tax rate – 1.625 mills, the lowest in Bucks County – steady since 1968.

At its Sept. 6 meeting council voted 6-0 to accept a proposal from NextEra Energy Resources to extend its current through 2027. The agreement also calls for the borough to lock in a rate of $52.81 per megawatt hour starting next year, about a 10 percent decrease.

“The power market is pretty good right now,” said McElree. “It’s an advantageous time for us to make this kind of move.”

The borough currently pays $57.70 per megawatt hour for electricity under a contract with NextEra that was scheduled to run through 2022, said McElree. The new deal extends the contract through 2027 and locks in the lower rate, he said.

The borough could have opted for another proposal that called for keeping the current rate through 2022 and then receiving an even lower rate ($2.48 per megawatt hour) between 2023 and 2027. But that deal included language that would have allowed NextEra to end the contract early, eliminating the change of any savings.

“Council felt this was the safer choice,” said McElree.

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