DlG—Lancaster Farming, Saturday, March 14,1981
d. agriculture to oppose power firm rate clause
M
ANNAPOLIS, Md - The
Maryland Department of
Agriculture and a band of
agricultural interests will make its
stand against Delmarva Power &
Light Company’s proposed
“ratchet clause” rate revolution
before the Public Service Com
mission later this month.
A simple explanation of the
proposed ratchet clause in DP &
L’s rate request filing is as follows.
In the “demand charge” portion of
the company’s proposed rate
structure, the highest one-hour
power consumption rate in any
summer (J une-September) month
would be used as the demand rate
for the following eight “winter
months” regardless of how much
less demand the customer placed
upon the system.
Agriculture’s alarm can be seen
from this hypothetical example, a
sweet corn vegetable processing
plant only works during July and
August: at some point in time at
peak volume it triples its demand
for electricity, that triple demand
factor is billed against the plant
each month until the next summer
season despite the fact that the
plant could be closed down for 10
months.
This alarm is shared by
Agriculture Secretary, Wayne A
Cawley, Jr. who has ordered his
department to take an active role
on behalf of agriculture
MDA, which has for months
been teaming up with food
processors, poultrymen and gram
handlers, says the proposal could
“seriously endanger the future of
the vegetable processing industry
on the Eastern Shore at a time
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when retention of this industry is
vital to the welfare of consumers
and farmers ”
DP & L has proposed a
revolutionary change in the way it
makes it rates for energy, saying it
is attempting to devise a system
that will force energy conservation
through price penalties
Agriculture’s response to this
proposal is that the food processing
industry, and to a lesser extent
other agricultural operations,
cannot shift heavy power demands
to less peak electricity usage
times
“When the tomatoes or sweet
corn are ready to be processed,
you can’t wait,” say food
processors. “The vegetable
processing industry must clean,
cut, cook and can while the
vegetables are fresh trom the field.
You can’t have a truck of tomatoes
sitting out in the hot sun waiting
until the discount electricity times
in the dead of night. Food
processing is a business tuned to
the minute for the sake of flavor
and even safety.”
For many months now, Cawley
and Ernest Shea, Executive
Secretary of the Maryland
Agricultural Commission, have
met with lawyers, farmers and, on
some occasions, representatives of
DP & L m an attempt to work out a
fair solution to the problems posed
by the “ratchet clause” concept
embodied m the rate case now
pending before the PSC.
"We have not been able to get
DP & L to recognize the unique
nature of seasonal agricultural
industries, and their inability to
shift tune of use patterns and,
therefore, will present our case
before the PSC at 'its hearings
March 12 and 13 in Salisbury. We
have filed testimony in written
form with the PSC earlier and had
hoped, until the past several days,
that some concession would be
offered by the utility, but to no
avail,' said Shea.
Last Friday, Shea appeared
oetore the Eastern Shore
delegation to the Maryland
General Assembly to brief them on
the problem and the history of
agriculture’s attempt to work out a
fair compromise.
DP & L has been successful in
neighboring Delaware in getting
approval of its new rate designs
which incorporate the ratchet
clause. However, in Delaware the
utility did agree, after con
siderable public outcry, to a
discount percentage on the ratchet
rate to be applied
Electricity rates, as outlined in
the utility’s proposal, are made as
a combination of two major fac
tors. The first is the actual amount
of electricity and the time of its use,
m a given period The second
consideration, and where the
ratchet clause comes into play, is
in the so-called “demand charge”
factor of the rate formula.
The “demand charge” covers
the costs the utility says it incurs in
gearing up to supply peak power
demands. More simply put, it
covers costs of the complex
electricity generating and
OPERATING
EXPENSES
EQUAL HOUSING
LENDER
FARM CREDIT SERVICE
distribution system to provide
capacity to meet any projected
customer demand
A simple way of envisioning this
is the gasoline tank in your car.
"Use" charges would cover the
amount of gasoline you put into the
tank in gallons and the rate at
which you use it. The “demand”
charge would cover the cost of the
tank, installing it in the car, the
fuel line, the fuel pump, the car
buerator, ignition system and
spark plugs.
In the case of electrical rate
making, the utility says it is
necessary to pay for some of the
tank and distribution system every
time you get a fill up.
According to Secretary Cawley,
the threat contained in the ratchet
clause concept to seasonal food
processor could not have come at a -
worse time.
“Here we are trying to preserve
agricultural land in Maryland and
telling people that one of the great
advantages of doing so is in the
fact that we can grow and process
much of four food close at home
Dairy Goat Club to meet
OXFORD - The Del-Mar-Penn
Dairy Goat Club will hold its
regular monthly meeting on March
15 at 2 p.m. in the meeting room of
the Chester County Federal Sav
ings and Loan Building, 124 South
Third Street, Oxford.
Anne Miller will speak on
seed,
* herbicides,
pesticides, fuel,
fertilizer, labor, repairs,
upkeep it’s the lan
guage of operating
expenses And you ve
got to speak it to
succeed
in--"
spoken here.
Joint Land Bank
and
PCA Services
Contact Your Local
We speak
Operating Expenses
We make all
kinds of short term
loans to fanners for
equipment purchases,
family needs, what
ever you need to keep
your cash flow green
and, thus, save consumers money
on transportation charges. We tell
them that we could produce and
process much more food than we
now do because the capacity is
there.
“If our present, and hard
pressed, food processors are put
out of business because of penalty
power rates, we will have lost a
major agricultural resource that
we’ll need in the future more than
we do now,” Cawley concluded.
Among those who have joined
with MDA in formal opposition to
the DP & L rate design proposal
are Gerald T. Bunting of the
Eastern Shore Gram & Feed
Dealers Association; James R,
Fnel, Jr., of S.E W. Fnel, Inc.,
Queenstown,-Md., John C Miller
of the Maryland Farm Bureau, A.
Orrell Saulsbury, Jr., of Saulsbury
Brothers and the Mid-Atlantic
Food Processors Association, W.
Drew Stabler of the Maryland
Grain Producers Association, and
William R. Stephens of the
Delmarva Poultry Industry, Inc.
classification and the ideal goat.
Anyone who is interested in raising
dairy goats is welcome to attend.
Due to the holidays in April, our
meeting will be held on April 5,
same place and time.
For more information
Cheryl Barton at 215/932-3828.
We’re fanner owned
and farmer controlled
We know what you’re
up against
Call or come
by today
FARMING
spoken here
call