Posted on 04/20/2005 7:25:16 AM PDT by TaxRelief
Kinston electricity customers won't be the only ElectriCities member to see higher electric bills next month. How much the cost jumps in individual communities, however, will vary.
Communities that buy power from the N.C. Eastern Municipal Power Agency are scrambling to pay about 5 percent more for wholesale power. The agency is implementing an energy adjustment clause of 5.1 percent effective May 1. The additional cost of power is being driven primarily by skyrocketing coal prices.
The Kinston City Council agreed Monday to raise electric rates an average 6.5 percent. Minimum residential and business rates will increase to cover a 1.5-percent rise in wholesale power that took effect in March. The rest of the increase to customers will depend on use.
Scott Stevens, director of the city's department of pubic services, said the average residential electric bill is $120 for 1,000 kWh. With the 6.5-percent increase, the average bill will jump to about $126.
Kinston officials had hoped to absorb the March increase in their budget. The unexpected May increase from the power agency made those plans obsolete. Stevens said this is the first electric rate increase for customers since 2003. Between 1992 and 2002, he added, there was no increase, and since 2002 the rates have only gone up 10 percent. This increase will make 16.5 percent.
Most officials in power agency communities contacted by The Free Press on Tuesday either declined to comment on how they will handle higher wholesale energy costs or said they are still looking at their options. Most admitted, however, that uncertainties surrounding power production make the long-range impact of any financial plan uncertain.
"I don't see our increase to customers being anywhere near 6.5 percent," said John Sullivan, town manager of La Grange. "I don't know what the rate increase will be, but it will only be what is needed to cover the increased cost to the town."
Sullivan said La Grange electric customers had a 1-percent increase in March. That increase, he added, was the only one in two years.
In Elizabeth City, Manager Rich Olson said it will take a 5-percent fuel adjustment charge to pay for the power agency's increase cost for wholesale power. If the cost of coal decreases, he said, this charge might removed in 12-18 months.
Olson said his city was able to absorb the cost of the power agency's 1-percent March increase. However the 5-percent increase, or additional $1.1 million per year, will have to come from electric customers.
Elizabeth City electric customers have not had a rate increase for at least three years. Rates have been stable, Olson said, because Elizabeth City has an expanding economy and the city has maintained a reserve as part of its electric fund.
In nearby Edenton, customers most likely will be paying 4.3 percent more for electricity beginning in May. Anne-Marie Knighton, the town manager, said she has little choice but to recommend the increase to cover such a large jump in her community's cost of buying wholesale power.
"This is going to cause a problem for some of our customers," Knighton said. "But our hands are tied."
Knighton said Edenton's electric customers had a 1.4- percent increase in March. Since 2000, she added, there were probably two other increases of between 1 and 1.5 percent each.
Fred Horne, director of Wilson Energy, said he and his staff are still trying to minimize the cost for Wilson's electric users.
"We are trying to look at a minimum increase to our customers," Horne said. "This is a difficult situation because this is an increase to our budget that we didn't expect."
Horne said Wilson customers already had an increase between 1 percent and 1.8 percent in March. Customers also saw their electric bills jump an average of 1 percent to 1.8 percent in January 2004, and an average of 3 percent in January 2003.
Bob Shiles can be reached at (252) 527-3191, Ext. 237, or bshiles@freedomenc.com.
Yeah, but you're not going to see any nuclear plants built until Yucca Mountain opens. That opening is 10 years away, and has been since I got into the industry 26 years ago.
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