City mayconsider7 percentrate drop


By Scott Witten - [email protected]



LAURINBURG — Laurinburg residents could soon pay less for electricity.

At Wednesday night’s agenda workshop, the Laurinburg City Council heard a study recommending that the city drop its electric rates by 7 percent.

Ed Tucker, the consultant conducting the study, will make a formal presentation of his findings at Tuesday’s City Council meeting that begins at 7 p.m.

“The city asked us to take a look at your rate structure and we have done that quickly,” Tucker said. “We focused on revenue levels in the short run.”

The city commissioned the rate study following Duke Energy’s $1.2 billion purchase of generating assets from the N.C. Eastern Municipal Power Association. Laurinburg is among the 32 NCEMPA members.

The purchase reduced about 70 percent of the association’s debt load, resulting in a lower wholesale energy cost to some of its member cities. Based upon the new cost, among other factors, Tucker said he was recommending the new electric rate structure.

“Reducing it by 7 percent, (the city’s rate) would compare very favorably with Duke and the be under other neighboring systems,” he said.

With the proposed reduction, the electric department would generate about $16.7 million in 2015. Without any rate change, the city would generate about $17.9 million in electric revenues.

Council members said they would like to set a public hearing on the proposed rate reduction in November. A decision could come soon after that.

Several council members said the reduction might have been higher, but the city tried not to raise rates in the past even as costs had gone up.

“The citizens have been reaping some of the benefits of that for the simple reason that we were going into our saving account and getting the money instead of passing the costs along,” Councilman J.D. Willis said.

The city voted at the beginning of the year to approve a 3.5 percent rate increase starting in March to keep its electric fund from operating in the red.

City officials said that by boosting the fund’s revenue by about $47,000 per month, the increase will bring the fund to a break-even point on a monthly basis. The increase was expected to be temporary until council had a chance to review the completed rate study.

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By Scott Witten

[email protected]

Reach editor Scott Witten at 910-506-3023

Reach editor Scott Witten at 910-506-3023

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