Winterville to investigate cost of electric rate reduction
By ANGELA HARNE
Tuesday, April 16, 2019
WINTERVILLE — Residents may see lower electric bills in the future, after the Winterville Town Council directed staff to investigate the costs associated with a 5 percent electric rate reduction.
The decision, made at last week’s regular council meeting, came after several failed motions and much debate among council members.
Councilman Tony Moore had requested a discussion pertaining to electric rates be included on Monday’s agenda.
“It’s been over a year (since the town joined NTE Carolinas),” Moore said. “... Our citizens deserve a reduction.”
Last month, council members attended an electric rates workshop. Town staff recommended the council keep the rates steady, but presented scenarios of a 2.5 percent, 3 percent and 4 percent reduction and how it would affect capital improvement projects and the town’s revenue stream.
The scenarios also included projections on when increases would be needed.
“At the workshop, we asked you to think about it. At our April 29 budget workshop, we would like to present the effect on revenue,” Winterville Manager Terri Parker said.
Based on the manager’s comment, Councilman Ricky Hines made a motion to table the matter until the April 29 workshop. His motion died for a lack of a second.
Councilwoman Veronica Roberson requested additional scenarios.
A 4 percent reduction is the maximum the town can afford to give its residential customers without a transfer from the general fund or cuts to capital projects, Parker said.
Hines made a motion for a 4 percent rate reduction, which Councilman Johnny Moye seconded, followed by discussion.
“This board has charged the electric department with a number of projects we want to see,” Mayor Pro-tem Mark Smith said, referring to the town’s new territorial agreement and projected growth.
In the staff’s scenario, if no reduction is given the town can keep its rates steady until 2026 and still accomplish the council’s goals, Smith said.
“I don’t have a single bill that will remain stable until 2026,” he said.
The town’s last electric rate increase was in 2009.
“We have gone 10 years without an increase, and have the opportunity to extend that eight more years. That’s 18 years without raising rates,” Smith said.
Moore said he will not support a reduction less than 10 percent.
A one-time, 10 percent reduction will result in a $600,000 a year loss in revenue, Parker told the council.
The town’s Old Tar Road line relocation project and territorial expansion are estimated to cost the town at least $6 million, according to Winterville’s electric director Robert Sutton.
Smith questioned when the town would have to increase its rates if a 4 percent reduction was implemented.
Sutton said that if rates were reduced by 4 percent, they would need to be increased again within three to four years.
Moore argued that figure was a projection.
It is town staffs’ job to present such projections, Parker said.
Hines requested a vote be taken on his motion to implement a one-time 4 percent reduction.
“I misunderstood the motion,” Moye said, as he requested to withdrawal his second. He said he thought Hines’ motion was for a continual 4 percent reduction — not a one-time deal.
Hines restated his motion, which died for a lack of a second.
Moye made a motion to implement a continual 4 percent rate reduction, which also failed for the lack of a second.
Roberson made a motion directing staff to investigate a 5 percent reduction, which Moore seconded. The motion passed 3-2 with Smith and Hines opposed.
Parker and Sutton will present figures at the April 29 budget workshop.
Sutton said a 5 percent reduction would save a customer about $100 a year, or about $8.50 per month.
A 5 percent reduction would result in a $316,000 loss in revenue stream, according to Sutton.