A deeply divided Perkasie Borough Council will decide on May 18 whether to continue a rate reduction it gave electricity customers for a month as a way to cope with the COVID-19 pandemic.
During an often tense meeting conducted via Zoom on May 4, some council members said they favor giving residents and business owners another break on their electricity bills as the region continues to struggle with high unemployment and widespread business slowdowns.
Others, however, said the local economy is gradually coming back to life and that extending the rate reduction would jeopardize the long-term financial health of the borough, which depends heavily on profits from the sale of electricity to pay for essential services.
The March 15-April 15 rate cut cost the borough about $300,000 in lost revenue. It was mostly offset by savings from a bid for road improvements that came in under budget.
After about 30 minutes of discussion, Council President Jim Ryder suggested waiting two weeks for more data to become available before making a decision on another rate cut. Solicitor Jeff Garton will prepare a resolution setting the rate but leaving the amount blank until council reaches an agreement.
“Everything is still unknown,” said Ryder. “How quickly will we recover? What will our revenue streams be going forward? Before making any decisions, we need to see where we are financially.”
Councilman Matt Aigeldinger, who pushed for a 100-percent rate reduction the first time around, urged council to continue the rate cut.
“What has changed in the last 30 days?” he asked. The unemployment rate in the area is about 9 percent and many businesses temporarily closed or suffered a significant reduction in revenue, he said.
Aigeldinger suggested tapping the borough’s budget reserves or finding other expenses to cut to make up for the lost electricity revenue.
But Councilman Chuck Brooks, who suggested a smaller rate reduction over several months in March, said he would be “uncomfortable” with another major rate reduction “when we have so much facing us in the next year.” He said the state’s plan for a gradual reopening is a hopeful sign.
“I’m not an economist but I am fiscally responsible,” said Brooks.
Council Jim Purcell agreed. While driving around town, Purcell said, he has “seen more activity with businesses coming back, construction resuming.” Plus, the borough’s decision to waive late fees and suspend shutoffs for nonpayment during the crisis amounts to a rate cut, he said.
The average residential electricity bill for borough customers runs about $131 a month; the average commercial bill about $480 a month; and the average industrial bill about $1,076 a month, according to Borough Manager Andrea Coaxum.
Customers saw the reduction in bills that were sent out at the end of April, she said.
Perkasie is among several municipalities in the county that purchases electricity on the wholesale market and re-sells it to customers at a profit, which is used to fund daily operations. Only a handful have passed on rate reductions to their customers. In the Bux-Mont region, neither Quakertown nor Lansdale have cut their rates.