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City OKs 14 percent rate hike
Customers to begin paying more in Sept.


Staff Writer

Thursday, July 31, 2008

City Council approved a 14 percent electric rate hike Wednesday night that will show up in customers' bills in September.

The vote for the increase — which city officials said was necessary to offset a 14 percent increase in the city's wholesale rate — was 6-2, with councilors Anita Hummer and Kirk Rivers voting in opposition.

Eight residents attended a public hearing prior to the vote. Just one of them, Sandra Geddie of 109 Cooper's Lane, spoke.

Geddie told city councilors that she lives on a fixed income, receiving only Social Security and payments from her 401(k) account. She urged council to reduce the rate hike.

"It's very hard to live off $1,200 a month in Elizabeth City," Geddie said. "For people on a fixed income, they can't stretch that money but so far. It's going to put a lot of people in my section .. out of their houses."

Hummer echoed Geddie's concern in her comments on the rate hike.

"I don't think we have to ask people to tighten their belts any more," she said.

Rivers suggested an idea that he's tried out in the past — unsuccessfully: that council raise the property tax rate higher to keep the electric rate increase lower.

Rivers said electric rates hit everyone, particularly renters and those with low or fixed incomes, while property taxes affect only homeowners.

He also said the city should end the annual transfer of between $1 million and $1.5 million from the electric fund to the city's general fund. The city makes the transfer as a sort of "tax payment" on the electric system.

Second Ward Councilman Tony Stimatz disagreed with Rivers, saying that a large number of electric customers live outside the city's limits, and thus don't pay any city property taxes at all.

He also mentioned a little-known tax exemption is available to senior citizens that could result in a savings of $250 to $500 a year.

City Manager Rich Olson said the city could pay for the electric rate increase through either higher taxes or higher electric rates. But either way, the higher electric bill has to be paid, he said.

"It all depends how you want to pay the bill," Olson said.

First Ward Councilwoman Betty Meggs suggested residents conserve electricity by tracking how much energy they use.

Fourth Ward Councilwoman Volanda Watts suggested residents sign up for a city plan that averages a person's yearly electric usage, then bills them the same amount each month. At the end of the year, the customer receives either a credit for what was overpaid or another bill for what is owed.

The increase is the third in the past four years. Since 2005, city electric rates have gone up 23 percent.

The electric bill portion of a typical customer's average monthly utility bill will increase from $116.55 to $132.87, or about $196 more a year, City Manager Rich Olson said.

Council also agreed Monday night to make permanent a 5 percent coal rider increase that, when it first approved in 2005, was intended to be temporary.

Olson said coal prices have only gone up since the rider was approved. Consequently, council agreed to make the rider a permanent part of the city's rate structure.

The 14 percent rate hike will apply to all 32 members of the North Carolina Eastern Municipal Power Agency, the electric cooperative of cities that includes Elizabeth City, ElectriCities spokeswoman Rebecca Agner. ElectriCities is the administrative arm of NCEMPA.

Cities may pass on the entire increase to their customers, or choose to absorb some of it, Agner said.

In Elizabeth City's case, Olson said the city cannot afford to absorb any of the increase.

Elsewhere in eastern North Carolina, the following ElectriCities members either have increased or plan to increase their electric rates:

• Greenville approved a 11.2 percent increase Tuesday. A customer's bill of $100 will go up $11.20, and a bill of $200 would rise $22.40.

• Tarboro approved a 13.2 percent increase Monday. The average residential bill will increase from $124.78 to $141.90 per month.

• Rocky Mount officials were considering two proposals, either a one-time 11.5 percent increase, or a two-part increase that would raise rates 8 percent this year and 5 percent next year. The 11.5 percent increase would add $14 per month on a customer's bill. An 8 percent increase would equate to a $9.77 increase, and the 5 percent, which would take effect Jan. 1, would add $6.59.

• In Wilson, city leaders were expected to pass on the whole 14 percent on to customers, on top of a 5 percent increase that took effect July 1.

"We don't have an alternative but to pass it on," Mayor Bruce Rose said.

Ken Raber, senior vice president of ElectriCities Services and NCEMPA, said there are a number of reasons for the rate increase. But the largest are rising energy costs, he said. Uranium, the fuel used at NCEMPA's nuclear power plants, has jumped from $20 a pound in recent years to $135 a pound. And coal, which cost $30 a ton in 2002, now costs $100 a ton, he said. Coal is used to fuel two coal-fired plants partly owned by NCEMPA.

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