Choptank Electric Co-op Set to Buy St. Michaels Utility - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Choptank Electric Co-op Set to Buy St. Michaels Utility


ST. MICHAELS, Md.- The St. Michaels Town Commissioners and the St. Michaels Utilities Commission announced Friday that they have agreed in principle to sell the St. Michaels Electric Utility to Choptank Electric Cooperative, Inc.

Delmarva Power is currently operating and maintaining the St. Michaels electric distribution system and has done so since 1981 under a lease contract set to expire on Oct. 15, 2006. Due to the pending expiration of Delmarva Power’s lease, the St. Michaels Commissioners and the Utilities Commission undertook a study to determine whether to continue the current lease agreement, to issue a request for bids to utilities to operate the system or to sell the municipal utility outright.

According to a joint press released issued by the town of St. Michaels and Choptank Electric, under the terms of a letter of intent signed this week by St. Michaels and Choptank Electric, the cooperative will acquire all distribution assets as well as other related and available assets in the St. Michaels territory.

The municipal utility now serves about 4,000 meters. St. Michaels consumers will become members of Choptank Electric Cooperative and enjoy all of the privileges of co-op membership. 

“The Commissioners of St. Michaels have spent a great deal of time considering this matter over the past year. We were very thorough in our analysis and feel we made an excellent choice. Choptank Electric has a long history of being a reliable provider in the area and is very community-minded. They will make a good fit with the town,” said Ted Doyle, a St. Michaels commissioner and town treasurer, who also represented the town and its utilities commission in the negotiations.

Barry W. Gillman, president of the Commissioners of St. Michaels, said, “We are pleased to have signed a Letter of Intent with Choptank Electric Cooperative. St. Michaels Utilities is managed by local residents and customers of the system and Choptank is a member-owned electric utility. The cooperative business model was a major factor in our decision-making process. A cooperative owned by those it serves is really a continuance of the manner in which St. Michaels Utilities has been governed for many years."

Frederick L. Hubbard, Choptank president and CEO, said, “At the cooperative we are very excited about bringing the St. Michaels area into our service territory. We are quite familiar with the area, having served the adjoining Royal Oak area for over 50 years.

Choptank Electric and St. Michaels officials are currently negotiating the final terms of a contract of sale. Further details of the acquisition will be forthcoming upon the closing of the transaction, which is subject to Maryland Public Service Commission regulatory approval.

The St. Michaels Utilities Commission was established in 1916 to build and operate the town’s electric distribution system. The town ceased generating its own power and started buying from outside sources in 1954. St. Michaels is one of only six municipal utilities in Maryland.

Choptank Electric Cooperative was incorporated in 1938 in Caroline County. The cooperative now serves over 46,000 meters in all nine counties of Maryland’s Eastern Shore. 

As an electric cooperative, Choptank is a private independent electric utility owned by the consumers it serves and governed by a board of directors chosen from and elected by the membership.





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