Pikeville electric rates to decrease
By Melinda Harrell
Published in News on June 14, 2015 1:50 AM
PIKEVILLE -- Utility customers in Pikeville can expect to pay less on their electric bills beginning in July -- if they keep their usage levels the same as in past years, town officials said.
"It has been recommended that, on average, there will be a 7.5 percent decrease in customer rates starting July 1," town administrator Michael Hunt said.
"Whether the individual rates go down is always determined by usage," he added.
The expected rate decrease comes on the heels of the Town Board unanimously approving the asset sale of a percentage of four power plants owned by the North Carolina Eastern Municipal Power Agency, which is under the umbrella of Electricities, to Duke Energy Progress.
These percentages range from 13 to 18 percent, depending on the plant, said Rebecca Agner, communications manager for NCEMPA members. The plants were originally purchased from Duke Energy Progress.
The NCEMPA is selling back 16.17 percent ownership of the Harris Plant, 18.33 percent ownership of the Brunswick Plant, 16.17 percent ownership of the Mayo Plant and 12.94 percent ownership of the Roxboro Plant back to Duke Energy Progress.
Essentially, the NCEMPA is selling those percentages back to Duke Energy Progress.
"They owned the percentage of the plant -- from 13 to 18 percent of each plant. When they bought into the plants, it was good," Ms. Agner said. "But due to changing circumstances it had gotten very expensive."
Pikeville residents are not the only customers who could see a decrease in fees for utility customers.
NCEMPA provides utility services to 32 towns in North Carolina. One of them is Fremont.
The Fremont Town Board will discuss the NCEMPA asset sale to DEP at its next meeting, which is Tuesday at 7:30 p.m.
Although the agency is selling back its portion of ownership of the power plants, the basic utility functions of the NCEMPA in regards to servicing Pikeville customers will not change.
"It is going to be the same lines and everything, but instead of the power agency owning a portion of the plants, they are going to provide (electricity) at wholesale rate," Ms. Agner said.
"As far as I know, there will be no service interruptions," Hunt said about the asset sale.
"This whole process will be seamless other than the decrease in rate. I don't think anyone will see a decrease in service capacity or ability."
Pikeville will remain a member of the NCEMPA, paying the same fees and charges that go along with that membership.
"(The fees) should be lower. I would be astounded in the first year if they were higher," Hunt said about the membership fees and charges to maintain membership in the NCEMPA.
Ms. Agner says the sale will make the NCEMPA the largest wholesale customer of Duke Energy Progress, which offers the organization incredible negotiating leverage.
The sales will also reduce NCEMPA's debt by 75 percent.
Selling these assets and purchasing power wholesale not only reduces the debt service that has been accrued by NCEMPA, but it is also expected to increase stability through risk reduction and give the NCEMPA the ability to change with market conditions.
The sale has been a long time in the making, Ms. Agner said.
"We have been working on this for several years," she said.
Between 2010 and September of 2013 the NCEMPA and Duke Energy Progress were in discussions about the acquisition of the assets and in December of last year the two companies settled the negotiations.