Mayors attack high power bills (News and Observer)
SMITHFIELD The word coup jokingly came up several times in at a recent meeting of about a dozen Eastern North Carolina mayors.
Organized by Smithfield Mayor Daniel Evans and the mayors of Kinston and Elizabeth City, the gathering brought together mayors from public-power towns throughout Eastern North Carolina. And though the mayors won’t be overthrowing anybody, they agreed that doing nothing about high electric rates was no longer an option.
“No longer can you stick your head in the sand and say ‘that contract was signed long ago,'” Evans said.
In the 1970s, power looked to be scarce, so 30 or so towns in Eastern North Carolina came together to buy shares in nuclear plants to be built soon, including the Shearon Harris plant in Wake County. Then regulation prompted by the Three Mile Island nuclear disaster caused construction costs to skyrocket, and that put the towns billions of dollars in debt. Those debt payments, folded into every power bill, won’t end until 2026.
But several mayors said Thursday that the 1970s contract wasn’t the only reason electric rates are so high. They blame decisions made by Electricities, the member organization that manages the electricity purchases for the towns.
Several mayors said the high electricity rates cause developers and businesses to locate elsewhere – typically in nearby towns or unincorporated areas powered by Progress Energy at lower rates.
“That’s a big factor in stifling our growth,” Evans said, noting that Smithfield had fared better than other public power towns because it is near Raleigh.
In a recession, “we’ve got an organization that’s just going to build up its cash balance” rather than lower rates, Washington Mayor Archie Jennings said. “That’s just unreal.”
Elizabeth City Mayor Roger McLean noted that private utility Progress Energy recently cut its rates; he said Electricities should do the same.
And Evans said the organization had made questionable spending decisions that had resulted in even more debt. “Electricities has made some investments that they’ve lost money in,” he said. “I want to put a stop to any future debt.”
Roy Jones, a senior vice president for Electricities, said the agency has refinanced its debt to take advantage of lower interest rates.
The group formed the Eastern N.C. Mayors’ Association and agreed to a series of actions. They want to meet again in October or November with Electricities officials and the state Attorney General’s Office to review the electricity contract and determine what options the towns might have.
Early next year, they plan to get state and national lawmakers involved. The mayors’ group is also looking at getting members elected to the Electricities board of directors to push for changes. Electricities’ Jones says his agency plans to be there. “Our goal is to work with them and provide them with the information that they need,” he said.
Pikeville Mayor Johnny Weaver said Electricities needed to cut all unnecessary spending from its budget. He noted that the group recently donated $700 for a Sept. 11 observance in his town. “That ain’t doing anything but buying the good will of the Electricities board,” he said.
Weaver said even he’d rather live just outside Pikeville and enjoy cheaper electricity. “If I could have sold my house, I wouldn’t be mayor,” he said.
Clayton Mayor Jody McLeod and Benson Mayor William Massengill said that while they could not attend the meeting, they support the group’s goals and plan to be involved.
colin.campbell@nando.com or 919-836-5768
Modified Tue, Oct 12, 2010 12:12 AM
