Chamber forming second co-op

After a successful but admittedly bumpy first run forming a Chamber-wide electricity cooperative, the Bethany-Fenwick Area Chamber of Commerce is again fighting high electricity costs — by forming another co-op.

The first of two informational meetings regarding the second cooperative effort is set for 2 p.m. on Jan. 30 at Doyle’s restaurant in Selbyville. Some 74 businesses signed contracts to participate in the first co-op, a number that exceeded at least one official’s expectations.

“That was great, because the folks from CQI (the Chamber’s aggregator/consultant) told us between 20 and 30 businesses” would be enough to secure a good rate, Chamber Executive Director Karen McGrath said.

The businesses that participated received a “bid-out” rate of 9.897 cents per kilowatt hour — below the rate of more than 10 cents per kilowatt hour that many were paying before the co-op — and many were freed of a demand charge. Electric companies such as Delmarva Power keep backup power available for businesses for emergency purposes, resulting in the additional demand charge, which can add up to 50 percent the amount of the usage charge, one official has said.

“Demand charges have always been a significant cost. It’s reserve capacity,” said Richard Anderson, a principal of CQI who secured the rate from Washington Gas and Energy Services for the last co-op, said in an earlier interview. “It’s like having a bullpen. If a guy gets hurt, you have to be able to put in another player. You have to pay for additional payroll to keep that guy on the bench.”

Officials hope to again relieve participating business of the demand charge and have them paying a new rate before summer of 2007.

Even without the rate savings, many business owners expressed interest in the first co-op strictly because of the savings available from the lost demand charge. Kevin Lynch, owner of the Selbyville Pet and Garden Center, said he registered his business to rid it of a hefty charge. Lynch said earlier that his bill dropped from $1,350 to $900 after the switch, adding that “the demand charge is what it is.

“The process was pretty much seamless for us,” Lynch said in a press release issued last Friday. “The co-op is a no-brainer. We saved $350 the first month and, when you factor in seasonal changes, I figure we’ll average a savings of 25 percent per month.”

McGrath said that some 60 businesses who did not participate in the first co-op have already contacted Chamber offices, expressing interest in the second.

The 74 businesses who participated in the initial effort signed a three-year supply contract, which fit with the Chamber’s goal of providing long-term budget stability for member businesses.

Despite success in the first co-op, though, McGrath admitted to some bumpiness along the path of lower energy prices. Administrative duties were unclear at the onset, and caused some confusion throughout the process; and predicted switch dates – when participants were supposed to switch to the new rate — were at times up to a month off.

Familiarity with the process and Delmarva Power policy should make the second lap a bit easier one, McGrath said.

“How could we have made it more efficient? How can we make it more user-friendly on the other end?” McGrath said, echoing her own questions and others’ in recent months, as the process for the first co-op came to fruition. “There’s ways to set up the databases and binders to make it more efficient on our end. Some folks were confused.”

McGrath said that interested business owners should keep an upcoming copy of an electric bill, preferably before attending the January or February interest meetings. Only Delmarva Power customers who are members of the Chamber are eligible for participation.

Home-based businesses are also not eligible to participate in the co-op.

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 rose between 47 and 117 percent because of the skyrocketing costs of fossil fuels.

McGrath announced the Chamber’s partnership with CQI — the Maryland based aggregation consultant that has worked with numerous 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.