After receiving a rate of less than 10 cents for the Bethany-Fenwick Area Chamber of Commerce’s electric cooperative last week, Chamber Executive Director Karen McGrath jumped in her car, turned on her cell phone and started making calls.
The rate came in on Wednesday afternoon, and she and the Chamber only had until the end of the day on Thursday to secure contracts for the co-op. Some registered members stopped by the Chamber’s Fenwick office. McGrath visited others at their office, and one contract had to be faxed to a hotel in Colorado to be signed by a vacationing business owner.
But after all was done, 74 of the 76 registered members accepted the three-year contract and will receive the new electricity rate of 9.89 cents per kWh from Baltimore Gas and Energy Services, starting early next month.
“We were pleased to have so many people sign up for it the first time around and then accept the offer,” McGrath said earlier this week. “I applaud these guys for taking advantage of this member benefit … and I’m pleased we were able to deliver it for them.”
Despite rising tensions in the Middle East and hot summer weather recently, the market slowed down just enough last week to secure a good rate, according to Richard Anderson, a principal with CQI Associates, the Maryland-based aggregation company working with the Chamber.
Early this week, he added, market electricity rates jumped 2 cents and continued to rise as expected.
“We could have been in major trouble,” Anderson said, “But we got out of it. I thought it was excellent,” he added about the rate. “We were very fortunate to get that number given all the issues affecting the market.”
Kevin Lynch, the owner of Selbyville Pet and Garden, said that when McGrath called him, notifying him of the secured rate, signing the contract was a no-brainer. He and his wife — an owner of All About You salon in Ocean View — registered their businesses and raved about demand charges, which are a big part of their Delmarva Power bills but will be eliminated with the co-op registration.
“The rate is great but what is even better is the demand charge went away,” Lynch said, adding that he expects to save an average of $150 a month. “We were happy in light of everything that’s going on. They can read the market,” Lynch said of CQI Associates. “I’m happy.”
Tor Anderson, the owner of Viking Golf Theme and Water Park (and no relation to the aggregation-company representative), said signing the contract for his three locations in Fenwick was “simple economics.”
“When you see your rates go up 44 to 117 percent, I’m interested in shopping it down,” Tor Anderson said. “I’m thankful that the co-op afforded us the opportunity to shop around so we’re not bound by one supplier.”
Only two businesses turned down the Chamber’s offer last week. James Lucas, the General Manager at Harpoon Hannah’s, said the Fenwick restaurant had already secured a short-term deal and was hesitant about signing the long-term, three-year contract.
Harpoon Hannah’s officials secured a five-month rate of 8.48 cents per kWh and will look to re-bid early next year, when summer cooling costs aren’t a burden on the market.
“For us, we didn’t want to commit to a three-year term in what we feel is the height of the market,” Lucas said. “I know that they have helped out a lot of people tremendously. In the long run, it might be a wise move to lock in a long-term deal. (But) we’re willing to role the dice.”
McGrath, saying plans are in the works for another co-op next spring, added that budget stability was one of the goals of the co-op and said she was pleased with the initial effort.
“Our goal was for them to have long-term budget stability,” McGrath said, citing the unpredictable nature of the energy market. “That’s why we were interested in getting them a flat rate and to get them a longer-term contract.”
The Chamber’s board voted unanimously on May 3 to form an electric cooperative for their members, to fight rising electricity prices. On May 1, Delmarva Power commercial rates had risen anywhere from 47 to 117 percent because of the rising prices of fossil fuels. Only Delmarva Power commercial customers who were members of the co-op were allowed to join.
McGrath announced the Chamber’s partnership with CQI — which has worked with more than 15 other Chambers throughout the region on similar efforts — on May 8. Government and residential cooperative efforts have also stemmed from rising energy prices, which are not just a regional problem.