locally owned since 1854

Hearing set on bill that would stop Middletown from using electric fund to pay for other services

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 2/9/18

A public hearing on a bill that would prevent Middletown from using electric revenue to support providing municipal services will be held in the state Capitol on Tuesday, Feb. 13.

The hearing …

This item is available in full to subscribers.

Please log in to continue

Log in

Hearing set on bill that would stop Middletown from using electric fund to pay for other services

Posted

A public hearing on a bill that would prevent Middletown from using electric revenue to support providing municipal services will be held in the state Capitol on Tuesday, Feb. 13.

The hearing starts 10 a.m. in Room 140 and is to run until noon. The hearing is open to the public.

People can bring written testimony to submit but will not be allowed to ask questions or have input during the hearing, said Rep. Kate Harper, R-Montgomery County, who chairs the Local Government Committee of the state House of Representatives, where the bill is being considered.

Also a member of the committee is state Rep. Tom Mehaffie, R-Lower Swatara Township, whose district includes Middletown.

At stake is the ability of Middletown and 34 other boroughs in Pennsylvania that provide electricity to their residents and businesses to use revenue from sale of that electricity to help pay for municipal services like maintaining roads and parks.

Each year borough council transfers more than $1 million in electric revenue to the general fund to support providing these services.

In 2017 for example, council transferred $1.6 million from the electric fund to the general fund. Had this money not been available, the borough would have had to raise the property tax by 6.5 mils to continue providing the services at their current level.

Middletown has not raised the borough property tax since 2008, largely due to council being able to rely on the electric fund money year after year.

House Bill 1405, sponsored by Republican Rep. Aaron Bernstine, would end these transfers. The legislation would also impose state regulation upon Middletown and the other public power municipalities, in the same manner that private investor-owned utilities like PPL and Metropolitan-Edison are now regulated by the Pennsylvania Public Utility Commission.

Bernstine contends that in Elliott City, the public power municipality where he is from, electric rates have skyrocketed yet property taxes have still gone up by 67 percent in the past four years.

Opponents of his legislation, represented by the Pennsylvania Municipal Electric Association, say that local control works best. If borough councilors raise the electric rate too high or are otherwise abusive to residents, residents can vote them out of office, PMEA says.

The purpose of the hearing is for committee members to learn more about the bill, and its impact, by hearing from supporters and opponents of the legislation, Harper said.

House Bill 1405 is not currently scheduled for a vote by the committee, Harper said.

Bernstine will testify and is expected to bring other people with him who will also testify in support of the bill.

The committee will hear testimony opposing the legislation from PMEA, and from the Pennsylvania State Association of Boroughs.

Middletown has provided its concerns about the bill to PMEA, which will be testifying on the borough’s behalf, said Middletown Borough Manager Ken Klinepeter.

The legislation also would impact Royalton, another one of the 35 public power municipalities.