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Berlin council approves multi‑year energy procurement authority; AMP warns higher wholesale costs and January bill impacts
Summary
Council approved Resolution 2025‑07 to authorize multi‑year purchases of a requirements power contract after hearing from American Municipal Power that wholesale energy and capacity costs have risen; staff said residents should expect rate impacts beginning in January and council asked for proactive customer messaging.
The Berlin Mayor and Council voted unanimously to approve Resolution 2025‑07, giving town officials authority to enter multi‑year wholesale power purchases to replace contracts that expire at the end of the year.
Craig Kleinmans, assistant vice president of power supply for American Municipal Power, told the council the town's portfolio includes a wind power purchase agreement and a separate "requirements" contract that currently covers the town's balance of needs. He said two contract positions are expiring and that replacing the requirements portion will likely cost more than the deals purchased earlier in the decade.
"We bought that back in 2020...we almost hit the bottom of the market perfectly," Kleinmans said, explaining why earlier contracts were cheaper. He told the council the market has tightened and that AMP's pricing indications put the requirements piece around "7¢ a kilowatt hour," while a Blue Creek wind contract is roughly $51 per megawatt hour (about 5¢/kWh).
Staff and AMP officials explained these wholesale changes, plus higher transmission and capacity charges, will increase Berlin's wholesale energy cost. Kleinmans projected the town's wholesale energy component could move from about 6¢/kWh toward 7.7¢/kWh when transmission and capacity impacts are included. He urged buying multi‑year blocks to hedge price volatility and said the town could authorize purchases through 2030 while likely buying in shorter two‑year blocks.
Councilors asked about downstream effects for customers. AMP offered a simple example: on a household bill of about $150/month, the combined wholesale increases could translate to roughly $25 more per month depending on usage and final decisions. "It is a significant increase," Kleinmans said, but he emphasized Berlin's rates would remain below surrounding investor‑owned utilities such as Delmarva Power.
The presentation also covered renewable energy credits (RECs), compliance choices and the town's local generation. AMP noted that in some years it is cheaper to pay penalties than buy some types of RECs, and that the Blue Creek PPA will supply some renewable attributes but that additional RECs would have to be procured separately for compliance.
The council approved the resolution by voice vote after a motion by Council member Nichols; the record shows a unanimous vote with all council members present. Staff and AMP agreed to prepare consumer communication about upcoming bill changes; the council requested proactive outreach to customers before January billing cycles reflect the new wholesale purchases.
Council members also discussed longer‑term options including replacing aging diesel generators with more efficient natural‑gas units and exploring battery storage grants. AMP cautioned that selling excess generation back into the regional PJM market changes how transmission and capacity obligations are calculated.
