When the Town of Wake Forest agreed to sell its share of Duke Progress Energy power plants last year and shed $1,890,000 in debt, many Wake Forest Power customers also heard the cost of energy could be 9 percent lower going forward and thought their individual bills could be lowered by that amount or more.
They and the Wake Forest Town Board were surprised to hear in June that the majority of the town’s residential power department customers will see only a small decrease, about 1 percent, if the consultant’s recommendations for power rates are approved by the five commissioners.
The reason: 24 years. As Wake Forest Finance Director Aileen Staples has been explaining, the last time the town did a rate study and set the rates was 1992, long before the explosive growth since 2000. It would be 1997 before the town topped 10,000 souls and 2004 before there were more than 20,000 people living here. Today town officials are using the number 43,000 as the estimated town population.
Twenty-four years ago, in 1992, the town had 6,214 residents. Today Wake Forest Power, which serves only a small part of the area inside the town limits, has 6,187 customers. (Wake Electric has 8,103 customers inside town limits, mostly in the Heritage and Traditions subdivisions on the south and east, and Duke, which serves homes on the west side of town, has about 9,200 customer.)
During those 24 years the town’s power department has transitioned to Wake Forest Power, operating as a stand-alone business without regular assistance from the town’s general fund. Wake Forest Power completed the change from 12 KV to 23 KV in 1999; built a second substation, the one on the N.C. 98 Bypass, and just finished totally rebuilding the first substation on West Cedar Avenue; is about to complete the transition to radio frequency meter reading (smart grid, called AMI), meaning meters can be monitored and read in real time at the utility operations center on Friendship Chapel Road; trained and equipped an award-winning three person tree-trimming crew; and reinforced the system so that its reliability rating is currently 99.9811 percent. Its goal is to continue to make the system more efficient and more reliable. (See Public Works Department Director Mike Barton’s explanation about system reliability and the new meter-reading technology at the end of this article.)
System reliability has long been an important part of the power department’s mission as well as customer service. Staples noted in a recent interview that in 1996 when Hurricane Fran devastated the area, all town electric customers had their power restored in seven days, most in fewer days, while many Triangle residents went weeks without power. (The above sentence is not exactly true. One Wake Forest residence was still powerless after two weeks, the home of Wake Electric President Jim Mangum, who lived in a wooded section off Durham Road. The entire line to the house was destroyed and had to be rebuilt.)
Wake Forest Power today is a very different operation than it was 24 years ago, and Booth & Associates, the firm which did the rate study, looked at it in a new way in determining the costs the operation has and how those costs should be recovered.
Since 1992 residential customers have paid a flat monthly charge of $9.89, but that does not recognize the contributions other parts of town government play in overall operations.
Booth & Associates found that everything from town and public works administration to purchasing, human resources, finance and fleet maintenance spend employee time on Wake Forest Power’s operation. Using a weighted system of assigning cost, the consulting firm said that $1,142,902 each year is spent by these other parts of town government on Wake Forest Power’s operation. “Costs have increased as our system has expanded,” Staples said.
Detailing those true costs and assigning them to Wake Forest Power is the reason Booth & Associates recommend the flat monthly charge for residential customers be raised from $9.89 to $15.95, a $6.06 increase. It is in line with Wake Electric’s flat monthly charge of $15 and higher than Duke Progress, $11.13. Apex, an ElectriCities member like Wake Forest and very comparable, is currently charging $9.49, but Staples said Apex is beginning a rate study so its flat monthly charge may increase.
Because the wholesale rate Wake Forest Power pays for power from Duke has decreased by about 8 percent since the sale in 2015, Booth & Associates is proposing a decrease in the monthly energy charge – how much electricity a residential customer uses in a billing period – lowering it from $0.12080 per kWh to $0.11310. For the average residential customer using 1,000 kWh, that will drop the total monthly bill from $130.69 to $129.05. Customers using 2,500 kWh will see a larger decrease, from $311.90 to $298.70.
The power charge does include a portion of the operating expenses plus the purchased power costs. One of the fixed costs for Wake Forest Power will go away after 10 years, in 2025, when the town retires the $640,000 in bonds it had to assume as part of the power sale.
The town administration had hoped to have the town board approve the new rates in July but the plan now is for the commissioners to consider it during their Aug. 16 meeting.
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Barton explained about the meter-reading technology in an email. “We chose to convert over to AMI due to the varied flexibility of the RF Mesh Network. Besides more functionality and reliability of our electric meters with the RF technology, RF Mesh allows for more of our Distribution system facilities such as Circuit Breakers, Reclosers, Capacitor Banks and Gang Operated Air Break Switches to be remotely monitored and operated instead of rolling a truck out to each location.
“In conjunction with the installation of the Milsoft Outage Management System with an IVR component, Wake Forest Power should be able to respond and restore power to more customers sooner than we can now by being able to determine more quickly on what is going on in the field and more importantly, providing a safer working environment for our linemen by remotely operating this equipment during emergency and non-emergency situations.
“This also plays a huge role in Wake Forest Power being a RP3 (Reliable Public Power) Designated Utility by showing to our customers that we take reliability seriously and hopefully help with recruiting possible commercial entities to open facilities in an area served by Wake Forest Power.”
