KFP: About 50 show for town hall on electric issues

by David Anderson

Any Kinston resident who hoped to hear about a quick or simple method of getting their electric bills lowered did not get it from Tuesday evening’s town hall meeting.

“I want the same thing that you want,” said former City Councilman Will Barker, who also sits on the board of the N.C. Eastern Municipal Power Agency. “I want my bill to be as low as it can be.

“Unfortunately, there is not a simple solution.”

Barker, Kinston Public Services Director Rhonda Barwick and ElectriCities CEO Graham Edwards spent nearly two hours Tuesday speaking with about 50 residents in the auditorium of the Performing Arts Center at Kinston High School.

Point by point, Barker, Barwick and Edwards explained why the bills of Kinston and other municipal electric customers are so much higher than customers of competing utilities.

In the end, it boils down to the $2 billion debt the 32-member N.C. Eastern Municipal Power Agency holds , which is not scheduled to be paid off for another 15 years. Kinston holds about $183 million of that debt.

“If our debt were to go away, our bills could go down by 35 percent,” Barker explained. “Absent that debt, you’re not looking at significant change.”

Barwick said Public Services staff recently took the average annual consumption of a Kinston residential customer and put it against Kinston rates and Progress Rates.

When everything that goes into an electric bill was factored in, there was a 38 percent difference between Kinston and Progress.

“Debt is the difference for us,” Barwick said.

The NCEMPA was formed during the late 1970s, when municipalities were buying power on the open market from “investor-owned,” or private, utilities, Edwards said.

Because of the state of the economy in the ’70s, electric providers knew they could not afford to build enough generating assets to fill all power needs in North Carolina on their own.

In response, municipalities agreed to help finance the construction of new facilities.

“It was the right thing to do at the time,” Edwards said. “Unfortunately, nobody knew Three Mile Island was going to happen.”

That was a 1979 incident in which an accident occurred at the Three Mile Island nuclear power plant in Pennsylvania. Although no one in or around the plant was injured, the nuclear industry was subjected to much more stringent safety and environmental regulations which drove up the cost of building new facilities.

Those new facilities included the Shearon Harris plant in North Carolina.

The increase in costs and the debt needed to finance them put municipal electric customers in the bind they are still in today.

The NCEMPA and Progress Energy jointly own five coal and nuclear power plants, including Shearon Harris; 70 percent of the debt is taken up by the Harris plant.

“I think that the best alternative is, absent debt relief, is to sell the assets back to Progress or another willing buyer,” Edwards said.

Edwards and Barker said Kinston and the other NCEMPA member communities are locked into agreements with Progress to buy power through the 2030s and 2040s. They said it will be difficult to find a buyer for the generating assets because they are currently worth less than the debt owed on them.

Despite conversations with local U.S. House Rep. G.K. Butterfield, D-N.C., ElectriCities and NCEMPA officials have been told Congress is not willing to give a bailout to the power agency because other public power agencies around the nation have similar debt issues, and charge rates even higher than in Eastern North Carolina.

Debt relief and rate parity with Progress would also not come from the proposed merger between Progress and Duke Energy.

Barker and Edwards said the best current solutions are for customers to weatherize their homes and decrease consumption as much as possible, and there could be some relief from the political side, as a state legislative committee has been formed to look into the matter.

The committee’s next meeting will be Jan. 10 in Raleigh; it will be open to the public.

The news did not sit well with members of the audience.

“I haven’t seen a contract yet that we can’t get out of. … Every person here has thought about moving to a place where they have lower electric rates and I don’t blame them; I’ve thought about it myself,” said Kinston resident Stanley Pearson.

Pearson tried to convince the panel to look into solar energy, and even promoted Sky Power, a Canadian solar company that has built power-generating arrays for communities in the U.S. and Canada.

Barker derided Pearson’s claims solar power would be more affordable and promote local job growth.

Edwards said solar is currently the most expensive form of power generation, and Barker said utilities are only using it in North Carolina because the state requires private and municipal utilities to get a certain percentage of their power from renewable sources.

Resident Perchrista Boone encouraged panelists to work with residents to find solutions.

“I too have thought about leaving Kinston because I want to do something else with my money other than pay utility bills,” she said.

 

David Anderson can be reached at 252-559-1077 or danderson@freedomenc.com.

 

Breakout:

For more information on decreasing your electric consumption, visit kinstonpublicservices.com or call 252-939-3282. Public Services staff can perform a free energy audit on your home or business.

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