WILMINGTON — Mayor of Wilmington Bill Saffo has submitted formal testimony to the North Carolina Utilities Commission regarding the recent request from Duke Energy Progress to raise its rates by 16.7 percent, which would cost average customers roughly $18 more per month.
Saffo estimates the rate hike would increase the City of Wilmington’s expenses by nearly $200,000 and the Cape Fear Public Utility Authority’s expenses by roughly $465,000, for a total of around $665,000 for tax payers.
If the rate increase is approved, Saffo said, “When non-discretionary costs – like electricity bills – increase, cities have no choice but to either (1) pass these costs on to its residents in the form of higher taxes, or (2) cut other municipal services in order to pay these electricity costs. The practical effect is as simple as that. If the increased costs are passed along to taxpayers, the same people have to pay for the increased rates not once – but twice – through the higher bills for their own electricity usage billed directly to them, and also for the increased costs of the municipality usage, passed on indirectly through taxes.
“Saffo is the only mayor requested by the NC League of Municipalities to submit formal testimony to the Utilities Commission. City staff estimate that proposed rate increases would likely cost Wilmington’s local government an additional $400,000 each year,” according to Communications Manager Malissa Talbert.
Saffo made the submission on behalf of the North Carolina League of Municipalities on Oct. 20, stating that the cost of electricity continues to take up a significant portion of the city budget.
“we request that the Commission carefully analyze the expenses that (Duke Energy) Progress seeks to pass on to customers, especially the expenses related to the closure of coal ash basins, to determine whether ratepayers should be responsible for those expenses.”
“Serving as an elected public official in the City of Wilmington for now over 14 years, I have learned a great deal about municipal services, budgets and the budgeting process, and the challenges not only to Wilmington but to all North Carolina municipalities to use finite taxpayer resources as wisely as possible to meet the demand and expectations of our citizenry. One of the expenses that comprise a significant portion of our budget is the cost of electricity,” Saffo said.
Saffo also requested the Energy Commission decide if the increase in rates due to the recent coal ash basins should be passed on to customers.
“The rate increase requested by DE (Duke Energy) Progress has the potential for ‘rate shock’ among all customers. Therefore, we request that the commission carefully analyze the expenses that DE Progress seeks to pass on to customers, especially the expenses related to the closure of coal ash basins, to determine whether ratepayers should be responsible for those expenses,” he said.
There is also a concern from Saffo regarding the rapid growth of municipalities along with the increased demands for infrastructure and city services, and the increase of rates Duke is requesting which could lead to what he referred to as a “perfect storm.”
Saffo used the constant request for new street lights as an example for the increased demands for infrastructure, even though the city maintains 9,118 street lights currently.
Streetlights actually account for $1.25 million of the $2.4 million the city has budgeted for electricity costs for Duke Energy Progress, which does not include any rate increases. The Fiscal Year 2018 budget does not include the cost for electricity for water and wastewater facilities Saffo said, that comes from the CFPUA which is currently budgeted for $2.7 million.
“Duke’s proposed rate increase, the total cost that would have to be borne by city residents in fiscal year 2018 is about $5,865,000,” Saffo said.
Bill Saffo Direct Testimony by Michael James on Scribd
