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By a 3 to 2 vote, with new Commissioners
Frank Drake and Margaret Jones Stinnett
voting no, the town board approved an
increase in the fuel rider that will add
about $11.10 to an average household’s
monthly electric bill beginning in
February.
Stinnett’s motion to revisit
the rider and increase in June also
passed by a split vote, with
Commissioners Stephen Barrington and
David Camacho voting no. Commissioner
Velma Boyd-Lawson voted with the
majority each time.
Town Manager Mark Williams
said the increase is necessary because
last month ElectriCities approved a 10
percent increase in the price of
wholesale power. That increase, in large
part, was because of increases in the
cost of natural gas.
Drake asked about help with
the higher bills for people on fixed
incomes.
Williams said there is the
town’s H.O.P.E. program, administered by
ChurchNet but funded by donations from
electric customers. About 2,000 of the
6,333 electric customers cannot pay
their bill in any month; for most it is
a one-time problem. Williams also said
the town has long given two extensions a
year to customers.
Stinnett said she hoped
there was an equal payment plan in
place, and Williams said, “We’ve offered
that for years.”
Tom Lehr, who lives in the
Smith Creek subdivision on Ligon Mill
Road, said he thought money should be
taken from elsewhere to pay this. “There
ought to be money somewhere to cover
this without increasing the fees to
customers. To me, I view it as a tax
increase.” Lehr said it was presented as
temporary in May and now it would be
tripled.
In May of 2005 the board
added a fuel rider of $3.60 for each
1,000 kilowatt hours. That action was
taken because coal prices had jumped
dramatically.
The increase approved this
week increases the fuel rider to $11.00
for each 1,000 kilowatt hours.
The average Wake Forest
household uses 1,500 kilowatt hours in a
month, meaning the most people will see
the rider increase from $5.40 to $16.50.
Williams and Mayor Vivian
Jones said it is easier to use a fuel
rider to cover the wholesale costs
because it can more easily be done away
with. It would be much more difficult to
change the rates because they are
structured with different rates for
different classes of customers. “This
[the fuel rider] affects every
customer,” Williams said.
Williams said he does not
want to raise rates but there is no
alternative. “Our supplemental power is
generated by natural gas. The power
agencies have tried everything they can
to keep costs down.”
“If we don’t do this, the
electric fund goes in the red?” Drake
asked.
“We have to pay our bills,”
Williams said.
The town cannot use money
from elsewhere, such as the general
fund, to pay for the increased costs of
power. “The electric fund is an entirely
separate fund from the general fund,”
Jones said.
“We cannot use [property]
tax money to pay for the electric fund,”
the major said. “By law, we can’t take
money from something else. We have to
raise it through our rates. When fuel
prices go down, we can lop this thing
off very easily.”
The town has not raised its
electric rates since they were set in
1992, and Williams said the town has
been able to absorb at least 10
wholesale price increases because of its
growth.
During the retreat last
week, the board informally agreed to
have a rate structure study done this
calendar year.
The town receives all its
wholesale power from Progress Energy
(formerly CP&L) but through different
sources.
Between 65 and 80 percent of
the power comes from four Progress
Energy plants – Brunswick and Shearon
Harris nuclear power plants and Roxboro
and Mayo coal-fired plants – through the
Eastern Power Agency. ElectriCities
governs the agency and sets its rates.
In the mid-1980s the town
and other members of ElectriCities
purchased shares in those plants to help
pay for their construction because they
were assured electric demand would soar.
Demand did not rise, and construction
costs went through the roof after the
Three Mile Island accident. All the
cities in the Eastern Power Agency to
which Wake Forest belongs acquired much
more debt than anticipated.
The town still owes over $20
million, which it pays off annually.
Williams said during last week’s retreat
that the good news is the payments would
hit their peak in 2008. “By the time we
get to 2010 it drops off; the debt
service is less, the payments are less.”
The last payment will be in 2026 unless
the Eastern Power Agency restructures
the debt, spreading it out. If that
happens, Williams said, “We could drop
our [electric] rates for the first time
in a long time.”
The remainder of the town’s
power comes from a contract with
Progress Energy. There are a lot of
gas-fired plants in the utility’s
system, something which has been a
factor in the town’s need for more money
to cover its wholesale bills. |
