ZELIENOPLE — The borough council Monday night approved a 54-month contract with a new electric energy supplier that will begin next summer.

The new contract is higher than what the borough is paying its current supplier, Constellation Energy.

Borough officials will now begin to assess what impacts the increase will have on its ratepayers.

The new electric supplier will be AMP-Ohio at a contract rate beginning with a low cost to the borough of $54.90 per kilowatt hour in the first year of the contract to $70.67 per kilowatt hour in the last year of the contract.

The middle years of the contract contain gradual annual cost increases.

The borough has about 2,300 customers.

The term of the contract will run from July 1, 2010, to Dec. 31, 2014.

The contract is expected to increase the borough's costs around 24 percent. The borough had projected the cost increase could have been as much as 62 percent, if proposals had gone out to power companies six months ago, when prices were considerably higher.

"It is the right time to make a long-term power deal," energy consultant Jim Havrilla of Utility Engineers told the borough council Monday night.

He explained it is a current historic low in the natural gas market, which is a major driving force in pricing in the electric markets.

The benefits of a long-term deal, Havrilla said, are that it gives stability to the borough's ratepayers by locking in the cost over the term of the contract, thus avoiding pricing fluctuations that could be more expensive over time.

Other neighboring communities that have AMP-Ohio as their supplier include Grove City in Mercer County and Wampum and Ellwood City in Lawrence County.

The borough's current contract with Constellation Energy will expire June 30, 2010.

The council earlier put out requests for proposals a year early in an attempt to get better prices.

The council had sought final proposals and costs from the four companies that it received proposals from, including Constellation Energy, American Electric Power, AMP-Ohio and Nextra Energy Resources.

AMP-Ohio, a nonprofit corporation based in Columbus, was formed in 1971 for the purpose of owning and operating electric facilities or otherwise providing for the generation, transmission and distribution of electric power and energy.

AMP-Ohio owns the Richard H. Gorsuch Generating Station, a 213-megawatt, coal-fired facility in Marietta, Ohio.

It buys wholesale electric power and energy, and sells it to members at rates based on the purchase price and dispatch fees, plus a small service fee.

AMP-Ohio current membership totals 126 which includes 81 public power communities in Ohio, 28 in Pennsylvania, seven in Michigan, five in Virginia, two in West Virginia and three in Kentucky.