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Electric rates face August increase By Matt Shaw | Daily Times Staff Writer ROCKY MOUNT -- Tony Langston sat through a nearly two-hour presentation Friday morning on the cost of yellowcake uranium, the turmoil in financial markets and other reasons that municipal power agencies across eastern North Carolina will soon be raising their electric rates. Afterward, the Wilson resident dug a $20 bill out of his pocket and held it up. "This is my gross revenue," he said. "My operating costs -- my two children, my food, my clothing and my housing -- are going up. "And unlike them, I cannot go out and get someone else to pay for the increased costs." Langston was among a dozen or so people who went to the N.C. Eastern Municipal Power Agency Rate Committee's meeting to protest a planned rate hike. Another was Arletha C. Pope, who told the committee that her daughter already had a $500 power bill this month and her granddaughter a $600 bill. "My granddaughter is working here and there but not enough to get that kind of bill paid," she said. The NCEMPA committee was unbowed by the show of opposition, though. It voted unanimously to recommend a 14-percent increase in the rate NCEMPA charges its member cities and towns, including Wilson, Rocky Mount, Fremont and Pikeville. The final decision will be made by the NCEMPA Board of Commissioners when it meets July 30 in Wilson. Should it approve, the wholesale rate would go up Aug. 1. Earlier this month, the City Council approved a 5-percent increase in electric rates, that will become effective Tuesday. That will pay for an ongoing $33 million expansion of the electric grid, including two new substations and transmission lines, and is separate from the rate hike recommended Friday. The City Council will now need to consider at a July meeting whether to approve another rate increase that would mirror the increase in its wholesale rate. Following the Rocky Mount briefing, Wilson Mayor Bruce Rose called it "a very difficult situation, there's no way around it. This is happening all over the country." Ken Raper, a senior vice president at NCEMPA, called it "the most difficult time I've seen in the utility industry." The cost of coal and nuclear fuel have all reached historic highs in the past year, and natural gas prices have been high since Hurricane Katrina in 2005, he said. NCEMPA has been the most affected by coal, which is used in its Roxboro and Mayo plants, he said. The cost per ton was around $30 in 2002 and $60 in December, but it has jumped to $110 this spring. The cost of transporting it has gone up with the cost of oil, he said. NCEMPA has also been hurt by a failed restructuring of its debt for its nuclear power plants. Tim Tunis, NCEMPA's chief financial officer, said that the agency had converted a portion of the debt from fixed-rate loans to variable-interest loans in 2004. The move was expected to save around $10.5 million a year in interest payments, he said. Instead, the collapse of the subprime mortgage market caused those interest rates to climb unexpectedly, he said. Between last December and April, the payments were nearly $4 million over budget. NCEMPA has since converted that debt back to fixed rates, but the damage was done, Tunis said. NCEMPA's debt service payments are rising $12 million a year, or equal to a two-percent hike in the wholesale rate. Agency officials also anticipated spending $37 million more to buy power from Progress Energy, $12 million more for coal, $9 million for nuclear fuel, $6 million for transmission, $5 million more for operating costs and $3 million to replace interest normally earned on investments. That equals $84 million, or around 14 percent of NCEMPA's budget. Other utilities are going through the same issue, Raper said. Progress Energy is seeking approval for a 16-percent increase in customer cost as of January 2009. Other planned hikes are Duke Energy, 8 percent; Dominion Virginia (which serves some Nash County customers), 18 percent; Jacksonville Electric Authority, 15 percent; and Florida Power & Light, 16 percent. Raper is expected to appear at the Wilson City Council's meeting Thursday, July 17, to discuss the proposed rate increase. Council could vote that night on Wilson Energy's rates. The meeting will begin at 6 p.m. at City Hall, Goldsboro Street. mshaw@wilsontimes.com | 265-7878
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