Electricity bills have been a burden on Stephanie Cox-Davis and her husband since they moved three years ago into a 3,200-square-foot house at 411 Hancock St.
Their first bill, for just 10 days of service, was $187. Three months later, before the couple had really settled in, it reached $600. And this past February, electricity accounted for $716 of the couple’s $885 utility bill from the town.
“I thought my husband and I were about to get piece of the American dream – till my electric bill started coming in,” Cox-Davis told the Smithfield Town Council on Tuesday.
The homeowner was one of about a dozen Smithfield utility customers who spoke Tuesday night during a forum on the town’s electricity rates.
The Town Council held the forum to talk about rates and a pending deal with Duke Energy that could lower those rates. In all, about 30 utility customers, including business owners, attended.
In a presentation, Smithfield’s utilities director, Ken Griffin, compared these town’s residential and commercial rates to those charged by other N.C. public power towns.
Smithfield’s residential rate is 17.76 percent higher than Duke’s, but it’s second lowest among the state’s 32 public power towns. A Smithfield household using 1,000 kilowatt-hours per month pays $128.68. The same Duke household pays $109.27.
Smithfield’s commercial rates are more complicated. All business customers pay for the amount of electricity they consume but some also pay for the time of day they use it. Those businesses pay more for electricity during hours of peak demand.
But on average, a medium to large business in Smithfield pays about $4,415 a month for electricity, or 42 percent more than a Duke Energy business customer. Smithfield’s time-of-use commercial rate is second highest among public power towns surveyed by the town.
Small Smithfield businesses – those using 1,000 kilowatt-hours or less a month – do not pay for time of use. A typical bill is $160 a month, or 26 percent more than what a similar Duke customer pays.
Businesses can lower their time-of-use cost by taking part in a program that shuts off their power during peak-demand hours. During that time, the businesses rely on generators for electricity.
Griffin said the program has saved Johnston Medical Center and the town’s water plant a lot of money.
“If the generator is correct for their demand, they’re able to shed 100 percent of their demand and not pay for any of that expensive power during that peak period,” he said.
But Rufus Brown, who runs Johnston County Hams on North Bright Leaf Boulevard, said the price of a generator can outweigh the savings.
“If I go outside the city limits to go on Duke Energy, it would save us $20,000,” he said. “If I stay in Smithfield and do what they say and buy a generator, the generator costs me $100,000. I’m asking, Why would anybody want to come to Smithfield?”
Smithfield and North Carolina’s other public power towns get their electricity from power plants they partly own. Years ago, Smithfield, Selma, Clayton, Benson and 28 other North Carolina towns formed the N.C. Eastern Municipal Power Agency and bought into five power plants, including Shearon Harris in Wake County. They did this to ensure a steady stream of power to their communities. But soon after came the Three Mile Island disaster, which led to an exponential increase in the cost of building and maintaining nuclear power plants.
The 32 towns still owe $1.8 billion in debt on those power plants; Smithfield’s share of that debt is $37.5 million. Debt repayment is built into the wholesale rate the towns pay, and the towns pass that cost onto their consumers.
Duke Energy is interested in buying the towns’ shares of those plants, which could erase most of the debt the towns incurred in buying the shares. If the deal goes through, Smithfield will see its debt fall 70 percent, which could lead to lower rates for customers.
“I am telling you hopefully, if all goes well, in less than 12 months, your rates should fall down to the same price as [Duke],” Mayor John Lampe said at the forum. “I can’t promise that. But that is the goal that everybody is working towards. It seems very doable.”