Power Struggle Part 2: Can High Bills For ElectriCities Customers Be Fixed?

Utility customers in Eastern Carolina who get their power from the Eastern Municipal Power Agency, managed by ElectriCities, are demanding something be done about their high bills.

Wednesday night we reported how rates for the 268,000 customers who get their power from one of the 32 municipalities that make up ElectriCities, have bills 20 to 35 percent higher than other utility customers, according to the CEO of ElectriCities.

A major part of that is the $2.4 billion dollar debt the power agency has, part of which was the result of buying into nuclear power facilities decades ago, which are operated by Progress Energy.

So is there anything that can be done about that contract? Is there anything else that can be done to bring down rates?

Customers like Ella DeRouselle of Kinston are hoping for some relief.

She and her husband have been spending money to make their home energy efficient with heating and cooling equipment upgrades, additional insulation and new windows. But they're still waiting to see the savings.

"When you do all the things that they suggest you do ya know, so that you're not wasteful and your bill keeps getting higher and higher, I mean what are you to do, you have no choice. It's a monopoly."

ElectriCities CEO Graham Edwards has been meeting with customers in all 32 ElectriCities municipalities since taking over the job in 2009, recommending energy audits and improvements like the DeRouselle's have made, as he listens to the frustrations over the high bills. He's been stressing conservation and less consumption, which Edwards says is a big factor in some of those $1,000 bills he hears about. But he knows the 2.4 billion dollar debt, largely from construction of nuclear facilities operated by Progress Energy, which won't be paid off for fifteen more years, also looms large. He says they've refinanced the debt all they can, but doesn't see much else they can do about it.

New Bern Mayor Lee Bettis doesn't see that debt going away anytime soon either. That's why he's trying a different approach.

"The goal we're shooting for is parity of pricing with Progress Energy," Bettis said.

Bettis believes they can get the rates down 25 to 30 percent by intervening in the proposed Duke/Progress energy merger. That's why he's formed a coalition with mayors from other ElectriCities municipalities, and has traveled to Washington D.C. to meet with the chairman of the Federal Energy Regulatory Commission and the Department of Justice.

The result has been to hire a lawyer to formulate a legal theory to have their voice heard in the merger negotiations.

"We're talking about price squeezing. We're talking about unfair competition. These are the issues the lawyers are working on," Bettis said.

Edwards isn't weighing in on what the mayors are doing, but says ElectriCities is studying how the merger might impact customers as they look for opportunities to achieve some cost savings.

But he says, "Having our debt paid off as a result of this merger I dont't see that happening."

Neither does Progress Energy. Officials there say they empathize with the customers, but do not support a plan or attempt to push the debt to Progress shareholders or customers, and don't think the merger, which would create the nations largest utility company, is the appropriate mechanism for addressing ElectriCities rates.

Bettis couldn't disagree more with Progress. "The disparity between rates is going to increase, thereby lessening our ability to compete in the future."

Kinston Mayor B.J. Murphy says that's already happening.

"When new business comes we have a chance to compete and because our rates are a little bit higher it makes it tougher for these member cities to compete with Progress Energy."

The issue of competition may ultimately be part of the legal strategy to help bring about lower rates. Customers like DeRouselle just hope the words turn into action.

"At least ya know someone is looking at it other than my running a spreadsheet that I can't do anything with except to say there it is again."

Aside from what the coalition of mayors are doing, some state lawmakers have proposed legislation. One bill would bring ElectriCities under the oversight of the North Carolina Utilities Commission, another calls for a study of rates, while a third would prevent municipalities from transferring money in the electric fund to the general fund.

We'll keep you updated on the legislation and the other efforts underway to try and bring rates down as we continue to report on this issue.


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Harrison Location: Greenville on May 10, 2011 at 08:21 AM
    In october of 1999, the multiple cities involed with ElectriCities had the opportunity to end their involvement with ElectriCities and refused Duke & CP&L's offer. They refused to get out of the electric business. WHAT was " smart" or the best they could do with that decision ?
  • by David Location: Greenville on May 8, 2011 at 09:22 PM
    Maybe WITN could get more details on this debt and how it's financed? Interest rates are incredibly low compared to 20 years ago and I doubt the lazy city governments are working hard to come up with new ways to save money.
  • by EDWIN VARGAS Location: New Bern, NC on May 7, 2011 at 02:25 PM
    Until we pay the $143 million in debt to Electricities the rate will not go down. The best thing is to pay off the debt and reduce Craven County residence electric rate by 30 percent. The other 32 cities have to pay off their debt to release ALL of the 32 cities from Electricities deal. Duke-Progress will not pay off our debt. Beverly Perdue even stated that,"Its those towns responsibility to pay off that debt not the electric company". The best solution is not to shift any funds from each town's enterprise fund to the general fund for services in a town but to totally pay off the debt to Electricities as quickly as possible. Maybe a federal one time buy out may work. v/r Edwin Vargas edwinvargas230@yahoo.com
  • by fred Location: martin co on May 6, 2011 at 01:38 PM
    Take a look at the Salaries of the CEO's of these so called nonprofit utilities!
  • by Dee Location: Chocowinity, NC on May 6, 2011 at 08:29 AM
    I just moved across the bridge...... From Washington to Chocowinity. My electric bill at on Washington Utilities..... $250- $300 per month (if it was that low) Chocowinity On Progress Energy 5 miles down the road....... $65!!!! Now tell me where the problem is.
  • by TVTooner Location: BoCo on May 6, 2011 at 08:05 AM
    It may be hard to believe, but around 1980, NCEMPA investment in the Harris N-plant seemed like a good thing compared to outrageous fuel adjustments imposed by (then) VEPCO on Northeastern NC municipals. Anybody remember that? At the time, Gov. Hunt weighed in with an opinion on getting the Richmond folks out of NC customer's wallets. Present day problems stem from the difficulty with trying to accurately predict the best path to a long term future with electric generation options and having to commit to it financially for decades. ElectriCities made the commitment to ownership in the Harris plant willingly thirty years or so ago and it's not easy for the muni systems to get out of these contracts. Present-day managers and employees are pretty much stuck with those long-ago decisions made by their predecessors.
  • by Lena Location: Washington.NC on May 6, 2011 at 06:56 AM
    When we moved here five years ago we were shocked at the utility bill, we lived in Maryland our utility company was Pepco, our bill each month from at least $150.00 less then the bill we received every month from the City of Washington. There has to be federal regulation and investigation into these rates. And the water, according to the residents, the water is not safe to drink, but we are billed for it as well.
  • by doug Location: Washington on May 6, 2011 at 04:06 AM
    Ricky Bobby: Why compare the Electricities rates to the national avaerage? Compare it to the rates of someone a few miles down the road who is served by Progress Energy. Check it out for your self, they will be paying 20 - 30 % less for their electricty.
  • by electric man Location: ahoskie on May 5, 2011 at 11:01 PM
    Contact your local Repub politician. They are always glad to lend a hand to a company that is shafting the public. You see, that is where all there campaign finance money comes from. They will be approving rate hikes from these companies and increasing that tax you pay on your electric bill so they can finance their "special projects". These special projects are like more sand reclamation for OBX beach front home owners and insurance relief funds for these same owners. You get to pay for all that ...and parking too !!
  • by Mike Location: Hubert on May 5, 2011 at 09:39 PM
    I'll tell you what's going to end up happening is that Electrocities is going to work out some deal with Progress Energy that spreads out the cost of it's(Electricities) investment in the nuclear facility to all of Progress Energy's customers which will raise the rates for everyone else. That's what's going to happen. If the Government(state or federal) steps in that's for sure what's going to happen.
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