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Electric fees could increase

March 28, 2011

Maiden electrical customers could see an increase in their rates after a decision from ElectriCities to pass on higher rates to municipalities.
The details of that increase are left to representatives from 19 cities and towns served by Electricities in piedmont and western North Carolina.

All North Carolina Municipal Power Agency 1 (NCMPA1) member cities and towns face a rate increase, and the decision falls on board members as to how much and when those increases will happen.

"If there's an increase at that NCMPA1, then most likely some, if not most, of that will pass on to our customers," said Maiden Town Manager Todd Herms. "We have cut as deep as we could in the electrical department, and then cut some more. There is just no more room for cuts in the electrical department."

ElectriCities spokeperson Rebecca Agner released a statement to The O-N-E about the potential rate increase.

"Under the rate plan adopted in 2010, North Carolina Municipal Power Agency No. 1 is planning for a five percent wholesale rate increase to its participants on July 1, 2011. The rate plan is currently under review with no deviation from the existing plan at this point. We hope to have an updated recommendation in the next couple of months," the statement said.

Herms said the NCMPA1 outlined two possible scenarios for a rate increase to its municipalities. One situation outlines a sharp increase in rates for a short period of time, with rates stabilizing quickly.

Another situation outlines a slower rate increase during a longer period of time, taking rates years to stabilize.

Maiden Public Works Director Billy Price is a NCMPA1 commissioner and must cast a vote to choose between the long-term, steady rate increase or the short-term, sharper increase.

Price and Herms discussed the decision with Town Council members at the council's March 21 meeting. The officials agreed that the long-term, steady increase is the best option.

"People have trouble paying their power bills now, let alone with a power increase," said Maiden Mayor Bob Smyre.

Official representatives from the NCMPA1 met March 22, the day after Maiden's Town Council meeting, to discuss which way the increase will be implemented.

Herms said no decision was reached at the meeting, and discussion will continue at the board's April meeting.

ElectriCities' decision to raise rates to municipalities comes at a difficult financial time for residents, as well as power-purchasing companies.

"The economy has caused many big-time businesses to slow production or close, thus not using as much power," Herms said. "It is simple supply and demand. We used to sell surplus energy on the open market for a premium price. Now, that is dropped way down."

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