Ease the burden
Published 4:39 pm Thursday, December 18, 2008
If it is at all possible, Washington’s City Council should not raise Washington Electric Utilities’ electric rates early next year.
The council must explore all potential remedies other than raising those rates. Increasing those rates, particularly during the winter and a recession, should be done only if there is no other option. Perhaps after careful consideration, the council will determine that the city can keep from passing on the 4-percent increase (which takes effect Feb. 1, 2009) in what it pays for power to its customers.
Washington’s power customers experienced rate increases in August, when power rates increased by 1.189 cents per kilowatt hour. That increase was implemented to recover the wholesale increase implemented by the North Carolina Eastern Municipal Power Agency, from which the city purchases its power.
Other rate increases came in October 2006 when the city learned about a projected $1.6 million shortfall in the city’s electric fund. In February of that year, electric rates rose 8.7 percent. In May 2005, electric rates were increased by 4.2 percent.
Most of the city’s power customers will say they cannot afford another rate increase. That’s what they would be expected to say. It is understandable those customers don’t want a rate increase.
The city probably could avoid a rate increase by dipping into its surplus in the general fund to cover the increase in its power costs, but dipping into that money would mean city taxpayers would be subsidizing the electric service the city provides it power customers, many of which do not live in the city.
The city’s electric department provides a service to its customers. Its customers should pay for that service.
There are some people who will say the city takes revenue from the electric department to “subsidize” city services provided to city residents. The transfer of money from the electric fund to the general fund could be viewed that way.
Don’t let the issue of one group “subsidizing” another group cloud the issue, which is finding a way, if possible, for the city to avoid increasing power rates for its customers. As it tries to do just that, the city should seek help.
The city’s reconstituted Washington Electric Utilities Advisory Board should have a say in whether the city increases electric rates early next year. The board was revived to provide input for just such matters. Perhaps the council, the advisory board and other city officials can combine their knowledge, experience and talents to find a solution.
And if the only workable solution they identify is to increase power rates, then make that increase as small as possible. The city faces a burden with its power costs increasing. If the city increases the rates it charges its power customers, those customers will face burdens, too.
Already, some of the city’s power customers are burdened by an economy that’s been in a recession about a year. Council members have said they are aware of that situation. They have 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 by selling power.
Raising the power rates early next year could hurt power customers’ wallets and purses and the city’s revenue intake.
If possible, it is time for concern to be converted into action to prevent that hurt from occurring.