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GUC may use fund balance to pay excess gas cost


Tony Cannon


By Ginger Livingston
The Daily Reflector

Wednesday, March 7, 2018

Greenville Utilities Commission’s management team is recommending a $1 million fund balance transfer to pay off higher-than-anticipated natural gas costs incurred during an early January cold snap.

GUC General Manager/CEO Tony Cannon mentioned the proposal during a Tuesday review of organization’s current fiscal year budget with the governing board’s finance/audit committee.

Cannon also presented the first draft of GUC’s fiscal year 2018-19 budget. Electric and natural gas rates are unchanged in the proposal, but water and sewer customers are facing a $3.77 bump in their monthly utility bill because of proposed rate increases, Cannon said.

The full GUC board will  review the proposal on March 15.

GUC experienced record usage of electricity and natural gas during a freezing winter storm between Jan. 1-8. Natural gas usage was 12 percent higher than the five-year average, according to previous news reports. GUC had $3.6 million in additional natural gas expenditures.

Cannon said staff covered most of the extra cost through budget adjustments, but $1 million is still needed to balance the budget. The GUC board must approve the transfer when it votes on budget amendments in May.

The board raised natural gas rates in January. The purchase gas adjustment, which the increase was called, represented an average increase of about $5 in the utility bill of a residential customer using 50 ccf (hundred cubic feet) of natural gas.

2018-19 budget

Preparing for immediate and future capital projects is the focus of the proposed $253 million fiscal year 2018-19 budget, Cannon said.

While no electric or natural gas rate increases are proposed, staff is recommending a 7.6 percent water rate increase and a 3.1 percent sewer rate increase.

The increases are being sought to help fund expansion of the water treatment plant along with building a new water transmission line and elevated water tank.

The sewer rate increase is being sought for improvements to the treatment process.

“Staff has been working on this budget quite regularly for months,” Cannon said.

Other key budget provisions included:

■ A 2 percent market adjustment in employee salaries and a 1.5 percent merit-based pay increase.

■ Continuing employee health and dental plans

■ The last of five yearly increases in electric fees for outdoor lighting, temporary electric services and permanent underground services is being recommended.

New developments

Cannon said staff is finalizing a policy and fees for new developments.

The General Assembly last year passed legislation that attempts to define new development and standardize the rules and methods for fee calculation.

Across North Carolina, utility providers have differing rules and fees for connecting new developments into existing water and sewer systems.

The legislation calls these fees system development fees and defines it as “a one-time charge assessed against “new development” as a way to pay for “facilities” needed to support growth or the recoup costs for existing facilities.”

GUC is finalizing its fee proposal and will hold a public hearing on the proposal May 17.

“It’s important to let people know they are welcome to come to these meetings so they can see the work that goes into the process,” board member Rebecca Bunch said.

Contact Ginger Livingston at glivingston@reflector.com or 252-329-9570.