In Smithfield, electricity rates for commercial and industrial customers are much higher than those charged by Duke Energy Progress. Smithfield also charges more than many other public power towns.
Those are the conclusions of a rate study completed by the town’s public utilities department with help from ElectriCities, which provides services to North Carolina’s 32 public power towns.
Electricity rates for commercial and industrial customers have two components – how much electricity a business consumes and when the business consumes it. For those customers, electricity is most expensive on cold winter mornings and hot summer afternoons, because that’s when demand is highest.
The study compared Smithfield business rates to those charged by Duke Energy and the public power towns of Apex, Benson, Clayton, Kinston, Selma and Wake Forest.
Ken Griffin, Smithfield’s utilities director, said comparing Smithfield to all public power towns would have taken too long because of the complicated nature of commercial rates. He chose Benson, Clayton and Selma because they are also in Johnston County. Apex made the list because the town is known for its low rates. Wake Forest, meanwhile, has enjoyed success in helping businesses avoid buying power during periods of peak demand. Kinston was convenient because Smithfield’s former utilities director is there now.
“We took a typical business for each category and used average energy cost and average demand to calculate the rates,” Griffin said.
Here’s what the study found:
In Smithfield, a medium to large business using 37,000 kilowatt-hours a month pays $4,415.37 for electricity. That’s 42 percent more than the $3,118.50 the business would pay for Duke Energy power. Among the public power towns, Smithfield’s rate was second highest, behind Benson, where the same customer would pay $4,519.38 a month.
Small Smithfield businesses – those using fewer than 1,000 kilowatt-hours a month – can expect to pay $160.11, or 26 percent more than a Duke customer’s $127.07 bill. Of the town’s surveyed, three charged more than Smithfield. Apex actually charges less than Duke. Small businesses pay only for use, not time of use.
To save money, Smithfield encourages businesses to shift as much consumption as possible to off-peak hours. But a business that does so can still expect to pay 47 to 59 percent more than a Duke customer depending on the time of year. Again, Smithfield’s charge is second highest, behind only Kinston, where the same business would pay 97 to 113 percent more than a Duke customer.
Smithfield encourages large industries to purchase generators and go off the town’s grid during hours of peak demand. It’s called load shedding. An industry that does so can expect to pay just 62 percent of Duke’s rate.
“We shine in the load-shedding program that we offer our large customers,” Griffin said.
In Smithfield and other public power towns, commercial and industrial will likely fall if the towns complete a deal to sell Duke their shares in a number of power plants.
Given the pending deal with Duke, Griffin said it’s time to do a comprehensive study. “This is an opportunity for us to do a cost-of-service study and say, ‘What is the cost of serving each class?’ ” he said.