A pleasant surprise will await most city electric customers later this year after city council agreed this week to a rate structure adjustment that will reduce costs for most served by Laurinburg.
“It’s going to be a slight reduction for base customers and for the customers using on-demand electricity as the on-demand threshold is going to increase,” Laurinburg Mayor Tommy Parker explained.
The average residential customer’s bill will be reduced by $32 per year thanks to the rate adjustment and the discontinuation of the “without water heater” billing classification. Since its introduction in 1958 that classification has become antiquated because of increased overall usage, reported city officials.
The changes will likely result in an annual loss in revenue of around $99,000 for the city, according to a rate study commissioned by the city.
According to the study, that revenue will likely be at least partially offset by increased commercial usage.
Council members initiated the rate study in response to feedback from local merchants who were concerned about electricity bills.
Presenting the rate study was Bruce Fowler of McGavran Engineering.
Fowler said that the adjustments made as a result of the study were designed to “balance (city) revenues and be fair to the customers.”
Explaining that there would be a “rather large” increase in the wholesale rate that the city is charged for electricity in 2015, Fowler said that it would be wise to “get everybody to a fair usage pattern” before that rate hike takes place.
“The city of Laurinburg is a member of a power agency (that is responsible for) nine coal plants, two gas plants and two nuclear plants,” Fowler said. Called the North Carolina Eastern Municipal Power Agency (NCEMPA), that agency occasionally adjusts its wholesale rate, and the next scheduled adjustment is expected on January 1, 2015.
“This is an effort by the city to show that we are concerned with electric rates just like the consumer is,” Parker said, describing the change as a “shift in responsibility.”
Parker said that the city is counting on FCC’s new paper plant, which will go online in March in 2014, to “give (the city) balanced demand.”
“They will use more power when others aren’t,” Parker said.
“We are trying to meet them halfway and trying to balance out their load,” said Parker.
Medium commercial customers of the city will save about $56 a month on average under the new structure, depending on demand.
Many churches and schools will also benefit substantially, saving between $800 and $950 per month on average.
“Churches and schools have always been kept at a special rate because cities feel that they are an important part of the community and deserve a break,” Fowler said.
It has been approximately 10 years since Laurinburg last commissioned a rate study, which is typical for most cities of its size, according to Fowler.
Other changes include the addition of a special rate for residences installing solar arrays on their property.
On a larger scale, Fowler said that the billing model for electricity is shifting.
“(It has been) the more you use the less you pay per unit. This structure has gone away in most cases because you’re trying to conserve. You get rewarded for saving electricity, so the 2015 rates will offer opportunities for all city customers to be rewarded for staying within certain usage limits.”