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Fayetteville Public Works Commission on track to boost electricity prices 4% over two years

Other news: Customers to stop paying to clean up Duke Energy’s coal ash mess


Electric customers of the Fayetteville Public Works Commission on average will pay 2% more for power starting in May, and another 2% the following May, under new electric rates the utility is considering.

Prices for other services from Fayetteville’s city-owned electric, water and sewer utility are also slated to rise in the coming months, such as the monthly prices for security lighting that some customers purchase from the utility, and the installation fees for water and sewer lines to connect properties to the PWC’s water and sewer system.

“All costs have risen in the past few years,” Jason Alban, PWC’s director of financial planning and capital projects, told the utility’s board members on Wednesday morning. The utility, he said, needs to adjust its rates and fees to accommodate this.

The PWC buys most of its power from Duke Energy Progress, the privately owned electricity provider for much of North Carolina.

The PWC’s board voted 4-0 to schedule a public hearing on the proposed rates for 8:30 a.m. Feb. 28. Details of the new rate schedule are to be published on the PWC’s website prior to this hearing, Alban said.

Members of the general public who cannot attend the Feb. 28 hearing may also contact the PWC to express their thoughts on the new rates.

Among the proposed changes:

  • Starting next year, time-of-use rates would be in effect every day, including weekends and holidays, and not just on business days. Under time-of-use pricing, the PWC charges more for electricity for several hours per day to encourage people to use less power during those times. However, if the new time-of-use hours take effect, the peak pricing will apply for only three hours daily instead of four hours.
  • The time-of-use peak pricing for residential customers would increase from 13.845 cents per kilowatt hour to 14.042 cents on May 1 of this year and 14.126 cents on May 1, 2025.
  • Off-peak time-of-use pricing, which is 9.024 cents per kilowatt hour now, would become 9.152 cents on May 1, and 9.207 cents a year later.
  • The minimum monthly residential charge, not including actual usage, would rise from $22 per month now to $23 on May 1, and $24 on May 1, 2025.

The effects of the new rates and fees would vary based on how much power the customers use and what other services they purchase.

The PWC estimated that residential customers who use 1,000 kilowatt hours per month would see an increase of $2.39 per month starting May 1, from $119.74 to $122.13. In May 2025, their bill will rise another 38 cents, to $122.51.

A business with a $1,222 monthly bill would pay an estimated $1,248 starting May 1, and $1,274 in May 2025, the PWC’s presentation to the board says.

A factor that will slightly ease the expense: starting in August, the PWC will stop levying Power Supply Adjustment charge for when the cost of buying power from Duke exceeds what the PWC projected its revenue would be from its customers, spokeswoman Carolyn Justice-Hinson said.

The PWC has levied this charge or given customers a credit, based on whether its projections were too low or too high, its website says. It is $6.35 for a residential user of 1,000 kilowatt hours.

Surcharge for Duke Energy’s coal ash mess would end

There is another factor that would blunt the PWC price increase. Starting May 1, 2025, the PWC would stop levying a $2 per month Coal Ash Rider for Duke Energy.

This fee stems from the 2014 Duke Energy coal ash disaster, when liquified coal ash waste stored at a coal-powered Duke plant in Rockingham County north of Greensboro leaked into the Dan River.

An estimated 50,000 to 82,000 tons of ash and 27 million gallons of ash pond water were spilled, the Environmental Protection Agency said. Toxic sludge extended 70 miles downstream, the Energy News Network reported in 2019.

Duke had to clean up that mess plus collect and safely store coal ash from 14 coal-fired plants around the state, the news outlet said. Duke’s cost was estimated at $2 billion, The Fayetteville Observer reported in 2018, and the company was allowed to make its customers pay.

The PWC’s share was estimated at $60 to $70 million, and would have been about $10 per month per customer over about six years. The PWC instead charged $2 per month, and paid the rest from its reserves, the Observer reported in 2018.

Prices fall and rise

The PWC cut its rates in May 2020, then voted in March and August 2023 to raise rates.

“Electric rates were reduced by 4.7% in 2020,” Justice-Hinson said. “So with the new increases, it brings rates back in line to where they were in 2020.”

Senior reporter Paul Woolverton can be reached at 910-261-4710 and pwoolverton@cityviewnc.com.

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pwc, public works commission, water, sewer, electricity, fayetteville, cumberland