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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