Rate increase likely

Published 2:51 pm Wednesday, December 10, 2008

By Staff
City’s power customerscould begin paying morefor power in February ’09
Contributing Editor
Washington Electric Utilities customers likely will see a rate increase in February.
The wholesale rate that WEU pays for its power will increase by 4 percent Feb. 1, 2009. The N.C. Eastern Municipal Power Agency’s Board of Commissioners approved the increase at its meeting last month. On top of the increase is what the city pays for power; the city’s electric fund faces a $1.2 million shortfall this fiscal year. The city buys its power from NCEMPA.
On Aug. 1, WEU’s retail rates increased by 1.189 cents per kilowatt hour. That increase was implemented to recover the wholesale increase from NCEMPA.
Although the council has yet to decide what to do about the increase in its power cost and what to do about the shortfall (that decision likely will be made next month), council members, the mayor and city officials talked about several options during the council’s meeting Monday.
One option is to raise the retail electric rate by 8.2 percent during the last five months of the current fiscal year. Another option is to increase the retail electric rate by 5 percent for a 17-month period, the last five months of the current fiscal year and the 12 months of the 2009-2010 fiscal year.
The city also is looking for ways to reduce or eliminate the expected $1.2 million shortfall in the electric fund.
Councilman Archie Jennings suggested the council consider reducing or eliminating the usual transfer of revenue from the electric fund to the general fund, which would leave more money in the electric fund. Jennings acknowledged that reducing or eliminating that transfer would result in cuts to the general-fund budget.
City Manager James C. Smith said general-fund expenses could be reduced significantly by closing some city facilities. He did not specify which facilities could be closed to accomplish that reduction in expenditures.
Council members expressed concern about raising electric rates during a recession when some people are finding it hard to make ends meet. The city usually averages about 300 people a month who have their power turned off because they don’t pay their power bills, but lately that number has jumped to about 700 people a month, according to city officials.
Council members expressed concerns that raising electric rates during this recession could result in even more people unable to pay their power bills, further reducing the revenue the city receives buy selling power.
Before it makes a decision regarding electric rates next month, WEU Director Keith Hardt told the council he will provide it with as much up-to-date data as possible to help the council make its decision.
For additional coverage of the council’s meeting, see future editions of the Washington Daily News.