Hagerstown staff outline proposed retail rate increase and options for wholesale power contract

City of Hagerstown electric department staff and consultant Francesca Winter of GDS Associates briefed the Mayor and City Council on Oct. 21 on two linked issues: a planned filing with the Maryland Public Service Commission (PSC) to recover an approved rate of return and options the city is considering to secure wholesale power for the utility’s supply contract expiring Dec. 31, 2026.

Francesca Winter and Nathan Bridal said audited fiscal year 2024 results show the Hagerstown Light Department (HLD) is not earning the 4.26% rate of return approved in the 2024 rate case. Staff and the consultant plan a “make‑whole” filing with the PSC in November to update revenue requirements using FY2024 audited financials; the filing would aim to produce about $735,000 in additional revenue (roughly a 1.9% increase on total bills, described as about a 10% increase on base retail components outside purchase‑power costs). If approved, the increase could be implemented in a schedule similar to the prior case (staff estimated implementation around February 2026, but PSC review timing is not guaranteed).

On retail rate design, the staff proposal includes small increases to the residential customer charge (from $5.00 to $5.50) and to per‑kWh distribution energy components — changes that staff said would raise the residential bill for a 1,000 kWh customer from about $124.68 to $127.12 (a 2.44% dollar increase, 2% on the total bill). Staff emphasized the purchase‑power cost adjustment (PPCA) is a separate pass‑through and not part of the make‑whole filing.

On the wholesale power contract, staff reported responses to the summer RFP that produced range of pricing for “all energy delivered” offers (roughly $57–$69/MWh in some bids) and lower fixed load‑shape bids (approximately $52–$55.50/MWh for the fixed blocks). Staff said a load‑following fixed price is likely to be recommended to lock energy costs and reduce market‑price exposure, while noting that block purchases shift risk differently. Staff have time through calendar 2026 to lock supply prices but indicated they are monitoring market trends and may recommend securing a price soon if market movement dictates.

Council members asked about budget impacts, communication to customers and the long gap since prior retail adjustments; staff said the city deferred capital and staffing investments for many years and that full recovery would require continued investment. Staff described outreach plans similar to the prior rate case (bill inserts, social media, PSC public process) and said the city will provide customer‑friendly dollar examples rather than only percentages. No formal council vote was taken on rates or contract terms during the meeting; staff said they plan to file with the PSC in November and will return with updates.