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GUC preliminary budget includes rate decrease

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Shannon Keith

Friday, April 21, 2017

The Greenville Utilities Board of Commissioners on Thursday unanimously approved a $260 million preliminary budget that includes a 3.5 percent decrease in electric rates for customers.

The proposed 2017-18 fiscal year budget presented during Thursday’s GUC board meeting is “pretty much the same” as the initial budget presented to the finance committee in early March, said Tony Cannon, general manager and CEO. 

“In summary ... this is a great budget,” Cannon said. “It allows us to meet customer needs and puts us in a good place to prepare for growth and expansion.”

The budget proposal sets the utility’s operating budget at $250,541,773, about $3.5 million less than the current year's budget, Cannon said. The bulk of the savings is because GUC will spend less purchasing electricity and natural gas.

The rate decrease, which went into effect April 1, is GUC's third electric rate decrease since Greenville and 31 other eastern North Carolina municipalities sold their ownership in five generating facilities, including two nuclear plants, to Duke Energy Progress in 2015, which decreased each municipality's debt connected to the construction of a nuclear power plant.

The average GUC residential electric user's bill was $127 in June 2015, the last month before the first wholesale rate decrease. After July 1, the average electric bill will be $109. Staff calculates that by July 1 the average GUC residential customer has seen $500 in annual savings, Cannon said.

“This is something we are really proud of that is reflected in this budget,” Cannon said.

Other budget highlights presented Thursday include:

• An estimated $6.6 million transfer to the City of Greenville;

• Nearly $9.7 million allocated for capital outlay projects;

• About $14.3 million allocated for debt service payments.

GUC also will transfer $1.45 million into its electric and gas rate stabilization fund, increasing it to slightly more than $20 million. GUC established the fund in conjunction with the sale generating facilities sale to offset the impact of future wholesale rate changes.

Adoption of the budget will be considered by the Greenville City Council during its 6 p.m. meeting on May 11. 

“This is the budget we would like to take before City Council next month,” Cannon said. 

Also during Thursday’s meeting, GUC Commissioner Joel Butler presented an update on the joint City-GUC Pay and Benefits Committee meeting on March 23. The committee annually reviews the city’s and GUC’s joint pay plan to ensure that employee pay is compatible between the two entities and competitive in the market.

The committee is recommending the city and GUC increase employee pay by 3.2 percent during the 2017-18 fiscal year.

The committee based its recommendation on a study of 26 public-sector organizations that are similar in size to Greenville and offer similar services. The survey projected about a 3 percent increase in employee pay next year.

The data also showed that pay increases for GUC and the city currently are 1.5 percent below market.

The committee recommended the city and GUC increase employee pay by 3.2 percent in the 2017-18 fiscal year to remain competitive. The committee also recommended a 2.1 percent increase in salary structure. That means the minimum and maximum salaries for city and GUC positions would increase by 2 percent.

Only salaried employees at the minimum or maximum range would see an increase in pay.

A joint Greenville City Council-GUC meeting is scheduled at 5 p.m. Monday in the GUC board room, 401 S. Greene St., to discuss the recommendation. The meeting will include a public comment period.

Contact Shannon Keith at skeith@reflector.com and 329-9575.

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