City faces increase in wholesale power costs

Published 8:50 am Wednesday, February 27, 2008

By Staff
Contributing Editor
Washington’s City Council learned Monday that the wholesale cost the city pays for power is projected to increase 3 percent to 5 percent beginning January 2009.
The council also learned Washington Electric Utilities needs to spend about $2.3 million during the next two to three years to improve the city’s electric system to prevent lengthy, widespread power outages like those suffered in the western areas of the city during August 2007.
The city buys its power from NCEMPA. The memorandum informs city officials that the implementation and level of any rate change depends upon the NCEMPA’s rate committee review and recommendations. For budget planning purposes, the memorandum notes, a 5-percent increase is shown starting Jan. 1, 2009.
The increase in the city’s power cost does not automatically mean a rate increases for the city’s power customers. A decision on any change to the city’s power rates will come this spring as city officials prepare the budget for the 2008-2009 fiscal year.
Smith said city officials must “find out what we’re going to do to accommodate the 5-percent increase.”
An electric system loading study performed by Booth &Associates recommends the city immediately begin a five-part project to improve the city’s electric system to prevent power outages like those suffered by the system during several days of 100-degree heat in August 2007. The project includes installing new equipment and relocated some existing equipment to better prepare the system to meet future increases in power demands. Peak demands in August 2007 resulted in the widespread outages, according to the study.
Keith Hardt, director of Washington Electric Utilities, said the improvements and upgrades are needed because power demand is increasing in the western area of the city. That increasing demand is the result of residential growth and rising use of tobacco barns in that area, Hardt said. The tobacco barns use electricity to generate heat during the tobacco-curing process.
Some parts of the project, if started immediately, can be accomplished with several months, but others will take 24 to 36 months to complete, according to the study.
Long-term system improvements include adding more 230kV transformers at the system’s main substation near Chocowinity and increasing the system’s transmission capacity.