KFP: Legislature looks to assist municipal electric customers

NCGA’s Municipal Power Agency Relief Subcommittee members
http://bjmurphy.org/municipal-power-agency-relief-subcommittee/

by David Anderson
Kinston Free Press

Members of the N.C. General Assembly are looking for some relief for municipal electric customers burdened by astronomical light bills.

The 10-member, bipartisan Joint Municipal Power Agency Relief Committee held its first meeting in October and will hold its next meeting on Jan. 10, 2012. The meeting is open to the public.

“I’m hoping it’s going to be a contingent of not only elected leaders, but also concerned citizens from the Kinston area (who attend),” Kinston Mayor B.J. Murphy said.

The committee is composed of members of the House and Senate, but none who represents Lenoir County.

Kinston is one of 32 Eastern North Carolina towns and cities that are members of the N.C. Eastern Municipal Power Agency. That power agency jointly owns coal and nuclear power plants with Progress Energy — which is preparing to merge with Duke Energy. The debt the agency and its member communities took on in the early 1980s to buy into the power plants has pushed customers’ power bills 30 to 50 percent higher than those who get power from private utilities.

Frustrated customers have pushed their local officials, and the power agency’s trade group, ElectriCities, to do something.

Murphy said he also plans to work with City Council members “for the purpose of building a platform and coalition to attend the Jan. 10 meeting.”

He stressed municipal electric customers should not expect an automatic solution to high electric bills to come from a town hall or the legislative committee, though.

“Our No. 1 concern is our rates,” Murphy said. “Our rates are almost exclusively tied to our debt. There is no magic solution or silver bullet to getting rid of debt — ask the United States Congress about that.”

The mayor added: “There is no magic solution but it certainly is appealing that the North Carolina House and Senate still see this as a large concern for North Carolina.”

 

Cost planning

Another recent development in the electric bill saga promises some hope for public power communities, although again, it is not a guarantee of lower rates.

ElectriCities officials announced recently that the NCEMPA signed a new agreement to purchase supplemental power from Progress Energy from 2018 to 2031. The agency’s current agreement to buy supplemental power from Progress ends in 2017.

The majority of the power the agency sells to its member communities is generated by its own assets, but it must buy additional, or supplemental, power on the open market to fill excess needs.

Kinston Public Services Director Rhonda Barwick, who is an alternate member of the NCEMPA board — City Councilman Will Barker is also a board member — said the alternative to signing a supplemental power purchasing agreement is building a new power plant.

She stressed the agreement signed with Progress for 2018 includes a “coincident peak base rate,” which gives the communities room to continue “peak shaving” practices.

With peak shaving, municipal utilities can alert their largest customers when citywide demand has reached its peak, which increases the power providing costs for the city.

The largest customers have the option of switching to generator power during that peak time — Barwick said peak shaving saves the city $250,000 a month in production costs.

She stressed the agreement signed with Progress will not guarantee a lower rate for customers, but it will allow cities to continue peak shaving, and it gives them more tools to determine what their costs will be in future years so they can better plan their rate structures.

“It’s a good contract,” Barwick said. “It lets us plan and it lets us keep CP pricing, but you can’t just make the jump that the customers are going to see a reduction (in rates).”

 

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

 

Breakout:

The Joint Municipal Power Agency Relief Committee has two main goals:

*Determine feasibility of refinancing or restructuring power agency debt

*Determine feasibility of selling municipal or power agency generation assets to lower rates or debt

Source: General Assembly website: ncleg.net