HAGERSTOWN – Starting Aug. 1, residents who receive electricity through the City of Hagerstown can expect a noticeable increase in their utility bills due to a sharp rise in regional electricity capacity costs.
At the July 8 City Council meeting, Utilities Director Nancy Hausrath informed council members that the city’s daily cost for power capacity, what utilities pay to reserve sufficient energy to meet demand, has increased from approximately $2,300 to more than $16,000 per day. The result is a projected $5 million annual increase to the city’s electric operating costs.
This cost will be passed on to customers through the Purchase Power Cost Adjustment, a rate that changes monthly based on market conditions. According to Hausrath, the average residential customer using 1,000 kilowatt-hours per month will see a $16.40 monthly increase, or approximately $111.50 annually.
“This isn’t unique to Hagerstown,” Hausrath said. “This is being felt across the PJM grid,” referring to the Pennsylvania-New Jersey-Maryland Interconnection organization serving much of the Mid-Atlantic.
The hike is tied to rising demand in the power market, driven by the growth of data centers, manufacturing facilities and state-mandated energy transitions away from fossil fuels, combined with a slowdown in new power plant development. Together, these trends have contributed to the capacity shortfall and resulting price spike.
To help residents prepare, the city has already posted a Frequently Asked Questions flyer on its website and included alerts in recent utility bills. The city’s website also links to energy-saving tips from the Maryland Department of Energy, and payment assistance options remain available.
Council members expressed concern about how the increase would impact lower-income households. Several urged city staff to better highlight flexible payment plans and emergency assistance programs already in place.
“There are resources available,” said City Administrator Scott Nicewarner. “But we want residents to reach out before their accounts fall too far behind. Our staff is trained to help customers create manageable payment plans and connect with partner agencies.”
To manage future rate volatility, city staff are exploring battery energy storage systems as a way to reduce Hagerstown’s demand during peak hours. While solar energy was mentioned, limited space within the city makes battery storage a more viable option.
“This is an issue we’ll be dealing with for some time,” Hausrath said. “The market has shifted, and we need to explore smarter ways to reduce our load and protect our customers.”
Hagerstown Electric customers can expect to see the new rate changes on their August bills. Anyone with questions or concerns about payment is encouraged to contact the city’s customer service department.
