Lewes BPW adopts $13.6 million operational budget

The electric rate for Lewes Board of Public Works customers recently dropped and will continue to stay low over the next year, General Manager Darrin Gordon says.

“We get beat up on a lot of things, but we have the lowest residential electric rates in the state of Delaware, and we've been there for about the last five months,” he said.

All other rates will remain the same as part of the 2020-21 operations and maintenance budget, adopted March 25. 

The BPW purchases its power from the Delaware Municipal Electric Corporation. Gordon says commodity costs are comparable to other municipal electric providers in the state, but by charter, the BPW is required to pay the City of Lewes up to 5 percent of its gross sales on all utilities. Other municipally owned utilities pay higher rates.

Gordon said BPW’s fixed costs also remain low, resulting in savings for electric customers.

Gordon estimates the cost to buy electricity will decrease by 6 percent in the coming year. Those savings will be passed on to the BPW’s customers, he said.

The BPW may also consider changing operators for its wastewater treatment facility, following a major malfunction in December that resulted in nearly 4 million gallons of partially treated wastewater being discharged into the marsh adjacent to the plant.

As per the contract with White Marsh Environmental Systems Inc., the city budgeted $325,000 in last year’s budget. For the new year, which began April 1, Gordon budgeted $440,000 in anticipation of a possible change. He based the figure on the expense of previous operator Severn Trent.

“We are still undecided on the best path forward and are waiting on information from outside sources before we can make the best educated decisions,” Gordon said. “The pandemic has slowed much of the information coming [and that is] outside of our control.”

Like almost every other company in the country, the BPW is working to determine how it will be affected by the COVID-19 pandemic. Gov. John Carney’s state of emergency prohibits utilities from cutting off service for nonpayment or collecting late fees.

Gordon said that could affect the budget, but he’s confident it will not have a major impact.

“We don’t have to chase down a lot of bad debt, but this may change that,” he said. “We’re going to have to stay on top of it.”

BPW President Pres Lee said staff will have to closely monitor the budget throughout the coronavirus crisis.

“It’s going to be a challenging year,” he said. “ I don’t know what all the impacts are going to be going forward, but we’ll just have to gauge it as we go.”

The board approved the operations and maintenance budget at its March 25 meeting. They still need to discuss and vote on the five-year capital budget, which includes a variety of projects throughout town. Gordon anticipates having that budget ready for the BPW’s June meeting.

The operations budget estimates revenues at $14.3 million, with an additional $384,000 in non-operating revenues. They also owe about $1 million in debt payments for various projects.