Electric costs heading up and down during 2018

By: By Scott Bigelow - Staff writer
John McNeill

LUMBERTON — Electric rates for residential customers in Robeson County will be a good-news, bad-news story in 2018.

With Duke Energy Progress in the middle of rate negotiations — beginning with an eye-opening proposal for a 16.7 percent increase in residential rates — customers across eastern North Carolina have cause for concern. But only about half of Robeson County homes get electricity from Duke.

The other half of Robeson County’s residential electric customers will see either no increase or a reduction in rates next year because they do not purchase electricity directly from Duke Progress.

Lumbee River Electric Membership, the city of Lumberton and the town of Red Springs buy power wholesale from Duke Energy in concert with other EMCs and ElectriCities. Duke’s negotiations with the North Carolina Public Utilities Commission will not affect their customers for several years.

However, current residential rates in Lumberton and Red Springs are significantly higher than rates for Duke or Lumbee River customers. Officials in those municipalities see electric rates becoming competitive, if not lower, than other local providers within five years.

“When it’s all said and done, Red Springs will have the lowest rates of any local provider,” said John McNeill, Red Springs’ outgoing mayor.

McNeill was personally involved in the negotiations with Duke Energy that resulted in ElectriCities’ rates going down.

In Lumberton, another ElectriCity, residential rates also are dropping. After an 8 percent reduction in 2015, rates dropped again by 6.7 percent in 2016 and will drop again by 3.5 percent in January, said Wayne Horne, Lumberton city manager.

“Over the next four years, we do not anticipate any rate increases,” Horne said.

Lumberton has about 20,000 residential customers, and Red Springs serves about 3,000. Rates in both municipalities are expected to drop almost 20 percent after Duke Energy relieved ElectriCities of 75 percent of approximately $2 billion in debt that was incurred in the late 1970s.

Lumbee River EMC has 21,000 residential customers in Robeson County. The utility company’s last residential rate increase was in July 2014, and no rate increase is expected in 2018, although an increase is possible for 2019 or 2020, said Walter White, LREMC spokesman.

“The negotiations between Duke and the Public Utilities Commission has no impact on us,” White said. “We might feel an increase in 2019, but our rates for next year have already been settled.”

Duke Energy offers the lowest rates in Robeson County for residential electric customers, but the nation’s largest electric utility is facing financial headwinds as it seeks to recover from costs related to Hurricane Matthew, cleaning up its coal ash ponds, closing the Lee Nuclear Station and modernizing its network. Typically, the opening rate proposal gets sliced down to a more reasonable number.

The current rate for Duke customers is 9.502 cents per kilowatt. The typical consumer uses a little more than 1,000 Kw per month.

Lumbee River EMC charges residential customers 9.01 cents per Kw in the winter and 9.76 cents in the summer. There is a $27.65 per month facilities charge.

Lumberton’s rate is 12.03 cents per Kw, and Red Springs is 12.6 cents.

The average rate in North Carolina is 10.92 cents per Kw, 32nd lowest in the nation. Duke’s residential increase may change that.

Electric rates for Lumberton and Red Springs were handicapped by a large debt dating back to the late 1970s and the creation of the North Carolina Power Agency by ElectriCities. The agency sold more than $2 billion in bonds to purchase the future electrical generating capacity from Duke’s predecessor Carolina Power & Light.

The deal was cursed from the start as the cost of building that future power generation skyrocketed because of issues with nuclear power plants. Carolina Power & Light, now Progress Energy Inc., overestimated electrical demand and mothballed two units of the Shearon Harris nuclear station, which were part of the Power Agency purchase.

ElectriCities could not pay down the debt and rates shot up. Mayor McNeill was on the Power Agency’s board, which negotiated Duke’s purchase of 75 percent of its debt and set rates for the next five years.

So electric rates in Robeson County are heading in different directions for different providers.

John McNeill
https://www.robesonian.com/wp-content/uploads/2017/12/web1_John-McNeill_1.jpgJohn McNeill

https://www.robesonian.com/wp-content/uploads/2017/12/web1_Wayne-Horne_1.jpg

By Scott Bigelow

Staff writer

Staff writer Scott Bigelow may be contacted by email at [email protected] or by phone at 910-644-4497.

Staff writer Scott Bigelow may be contacted by email at [email protected] or by phone at 910-644-4497.