Most customers to see small decrease in monthly bill
On a split vote with Commissioners Brian Pate, Greg Harrington and Anne Reeve voting yes, Jim Thompson and Margaret Stinnett voting no, the Wake Forest Town Board Tuesday night approved new rates for all the town’s electric customers. The new rates will take effect in the September bills.
The 6,043 residential customers will notice little difference. Under the old rates, they paid $130.69 for 1,000 kWh, $120.80 for the power and $9.89 for the basic charge covering system costs such as billing, depreciation, salaries, equipment and repairs.
The September bill for the same amount of power will be $129.05, only $1.64 less than the August bill. The charge for power is $7.70 less, but the basic charge has been increased by $6.06 to $15.95.
The small decreases in the rates are across the board – small commercial, large commercial, public schools and coincident peak rate for large customers with generators – except for solar customers with rooftop panels who sell power back to the town. Those four customers will get a 39 percent reduction.
Starting the discussion and presentation about the rates, Mayor Vivian Jones said she “had thought we would have a larger decrease in rates.” But because of the town’s growth, the rates had remained largely the same as has the rate structure.
(After 15 years of absorbing wholesale electric rate increases, in 2008 and 2009 the town did increase rates across the board, a 12 percent increase in August 2008 and a 4 percent increase in March 2009.)
Jones also said the benefit for each town from the sale of their shares of Duke Progress Energy power plants were different based on the percentage each owned, the amount of debt and the use of power. Overall, she said, the general reduction in rates was 9 percent, “but ours was nearer 8 percent because of our growth and how we had been handling rates. Our basic charge has been for some time lower than it needed to be.”
Terry A. Berge with Booth & Associates, the firm which did the cost of service/rate design study, reiterated the objectives: to have rates that are simple and understandable, to yield the required revenue to cover costs, to be fair and avoid discrimination and to discourage the wasteful use of energy and facilities.
“What matters to me is, what is my bill going to be,” Stinnett said. She and Berge worked through the calculations for the average residential customer. “So I’m saving a dollar. People don’t care what the energy costs. They want to know what their bill is going to be.”
Jones objected to the low charge – which was $2 and proposed at $2.25 – to solar customers for their separate solar meter. “Do you thing $2.25 is enough to cover that?” Berge said, “A lot of utilities are up to $3.” He said the higher charge is “more political than cost related, and Public Utilities Director Mike Barton said the $2.25 covers the town’s costs.
Jones argued for charging $3.75, saying, “I’m concerned about how this is going to affect us in the future because things are going to change and change quickly.”
There was a discussion also about the coincident peak customers, mostly large retailers such as Walmart, who turn on their generators as the town approaches peak use in order to shave the peak-use additional energy charge.
“They are saving us money,” Barton said. Of the 22 customers with generators, the town owns seven of them and the others are owned by the customers. Barton said he is investigating charging the seven customers a service charge. The town purchased the generators beginning in 2005 to lure customers in areas where they could be serviced by the town or another utility. But those choice areas are no more. “Now if a customer wants it, they buy and install it,” Barton said.
After the discussion, Stinnett said she wanted to wait another month to take a vote. “I’d like to do the math and see what the true savings are. I have some questions.”
Finance Director Aileen Staples said she has that information to share with the commissioners, but the staff recommendation is to get approval for the rates to go into effect in September.
Pate than made a motion to approve with Harrington seconding, and Stinnett demurred, saying, “We’ve waited this long. I don’t know that another month is going to make a difference.”
After the three to two vote, there was agreement to have another rate study in the near future. Jones said, “The power agency is not planning to change the rates until 2020. It would be appropriate for us to look at them then.
Town Manager Kip Padgett said lately the general fund “has been helping the electric [fund]. In the past, the electric helped the general. This study fixed that.” (In the early 1980s money from the electric department provided up to 28 percent of the town’s general fund.)
Responding to a question, Barton said the town now has three megawatt transformers “that will take care of our current load and all future growth.” Also, now that the town has the newer substation on the N.C. 98 bypass and has rebuilt the 1970’s substation on West Cedar Avenue, it will not need any major improvements in the near future.
2 Responses
A lot of W.F. residents are served by Duke power and are billed directly by them at a much lower rate. Last time I checked it was $.092/kw-hr. This would mean $92.00/month vs. $120.80 in the above example. THIS IS NOT FAIR.
I would agree with the statement that rates are “more political than cost related”. Why else would electricity cost 33% more in Wake Forest than it does in Wakefield? With Duke absorbing the the debt incurred by the nuclear power plant scam that happened decades ago isn’t that age old justification for higher rates invalid?