Eastern North Carolina Electricity Customers are Getting Hosed.

As we opined in our last posting on Eastern North Carolina Public Power we simply do not trust the town councils in communities who use Public Power to treat customers right and lower the rate in complete junction with the just lowered wholesale price. So as the rates are being "adjusted" customers in those towns are getting hosed.  Allowing for some give in the fact most town councils in Eastern North Carolina who are in Public Power towns are nothing more than politicians even we have been blown away by the decisions almost across the board to refuse to pass on the full electricity rate breaks to customers in Public Power towns. 

Seriously here are the facts.  The reduction in rates after the Duke Energy buyout of Public Power/Eastern Municipal Power Agency is 18%, take out the 1.5% for the Electricities management of bonds and contracts and every single town should be reducing their electric rates 16.5% minimum. Only two towns as we can see have come close to that to date, New Bern and Wilson.  The rest who have acted so far are reducing rates in the low single digit percentages.  No other way to say this, but as we opined in our earlier posting, whatever revenue left over is to use for whatever the politicians decide.  In the past that money has been for political favors, wasted on favorite projects, or hire more government employees.  Yes many of these towns councils are giving some lip service to using the money for "needs" in the power depts. Strange that these "needs" just suddenly popped up.   These so called needs where already being met by the capital spending included in the already high rates. Many towns, like Smithfield were using the extra money piling up in electric revenues to keep property tax rates lower.  So yes town council members there is plenty of cash here to lower the power rates. 

So where do we go from here?  Maybe a better question do enough citizens and town council voters care enough to stand up for their what is owed them for long years of higher electricity rates?  We expect many town councils have already decided that by NOT lowering their rates to the correct level.  We also think many ratepayers have and are answering with their feet and moving out and not moving into of these high power rate towns.  Looking at the list of participants I see just a handfull of these towns that are growing, Greenville, Clayton, Apex, Wake Forest, and Louisburg.  So with over three dozens towns in the system the number who can withstand some less than full cut in power rates is minimal.  Let's also add in that when industry and business consider moves they consider high power rates as an impediment to where to set up shop.  But when you are managing your own public fiefdom who cares would be the answer of most town council members in this area.  Many on councils prefer towns not grow so as to protect their business turf from competition, so keeping rates higher helps in that regard. Add in the huge added pressure form town managers and government professionals who want to keep this revenue flowing for governmental reasons.  So be damned with the citizens and rate payers. 

We will keep an eye out here since we live in one of these communities so we have a dog in this fight.   So if you care, REALLY care about these rates and they being lowered to correct levels what do you do?  You attend town council meetings in numbers and tell your council members it is time to lower the rates and you do not buy their hyperbole about other spending "needs."  If they do not do so, vote them out with those who will lower the rates.  Add in that some of your electricity bill is still going to pay down that $500 million left over from the Duke Energy buyout.  Last round they failed to pay off the bonds in time and used the money for other purposes and just extended the bonds lifetime another 20 years or so.  Keep them honest on the bond payoffs getting done on time.  The point  is that all those "needs" and assumed and all those assumed rate increases they are talking about down the road will be to some or all extent not needed since in 10 years ALL the bonds will be paid off.  Meaning rates should come down again due to the decrease in borrowing costs. 

One final thought.  If you really want to end this game there is another better way.  Push your town councils to get out of the power business completely.  Tell them to call Duke Energy and ask them to make a deal to take over the town's power system, poles, lines, and employees all.  End the local crony capitalism, end the games being played with rates, end the uncertainties in costs going forward, and frankly lower the rates even further right now if done right.  Put what should have been business in charge of a business and not governments in charge.  Knowing Duke I can assure you they would love to do so since there will be little capital to spend and large numbers of closely grouped ratepayers to bring aboard their system.  Of course one will have to deal with those bloodsuckers at Electricities who do not want to give up their cushy bureau jobs and being the middleman.  We deserve better.