Recent questions regarding the electric rate increase for FY 23 answered below.
⦁ Is the decision official on the rate increase beginning 01/2023?
A rise in electrical rates will most likely occur in January 2023. The purchase power adjustment (PPA) currently is an additional $0.05029 per kilowatt hour. This charge is structured to cover the additional costs to purchase the power. The PPA may be adjusted (up or down) based upon market demand and supply. In the most current forward curve provided by our energy consultant, it is anticipated that a significant price spike will occur in January 2023. We will closely monitor the market so adjustments can be made in a timely manner to maintain a financially solvent utility.
⦁ Is there a plan to allow the city to renegotiate the utility contract that was signed?
The City signed an all-requirements power agreement with Carolina Power Partners effective January 2021 for a twenty-year term. Outside of a prohibitively expensive termination option, the City has no grounds to terminate the agreement or request a renegotiation of the terms.
⦁ What relief programs, extensions, or options will the City offer to users that cannot pay? Also, will fees be waived and for how long?
The City recently increased cutoff extensions from 10 days to 15 days. On extremely large bills, a payment plan is available in which customers pay half of the bill and extend the remaining balance out by an additional two months. Late fees and the cutoff fee have not been waived.
A list of agencies and brochures that offer public utility assistance is available in the Finance Department at City Hall. A link to agency assistance for electrical bill, current rate structure, and a link for “Understanding your bill” can be found on our city website.
⦁ What plans of action does the City plan to take due to the projected rise in natural gas prices?
We are investigating the potential of adding renewable energy resources such as hydroelectric and solar to our purchased power, as contemplated by the contract with CPP. For example, if we purchase approximately 700 mwh/month of solar energy we can reduce the amount of energy we purchase from CPP by approximately 4%.
⦁ What budget cuts are being considered to offset the cost to users? How will this impact users?
As discussed during the City Council workshop on July 21, 2022, we are deferring approximately $700k in maintenance items until next fiscal year, including:
Replacing Russell Rd primary service taps
Replacement of electric regulators
Upgrading Hermitage Pond Rd distribution lines
Replacement of old poles; and
Deferred maintenance typically cost more to accomplish in the future and can lead to instabilities within distribution system.
⦁ Why did the city enter into a contract with a company that only offers natural gas versus multiple energy resources?
In September, 2017 the City requested proposals from 7 power suppliers. 4 of the 7 suppliers chose to submit a proposal while 3 suppliers did not submit a proposal. After initial reviews of the submitted proposals, the list was narrowed to three 3 proposals for further consideration: CPP, Duke Energy Progress (DEP), and Dominion Energy.
CPP and DEP (The city’s historic supplier) were the most cost effective proposals
Upon further narrowing the field to CPP and DEP, service from CPP was forecasted to be approximately $3 million less per year than DEP over a five-year period- a significant anticipated cost savings to the City. Unfortunately, this savings did not fully materialize due to the increased cost of natural gas.
As part of CPP’s Purchased Sales Agreement, energy is purchased from the wholesale energy market when the market pricing is below the cost of energy produced at CPP’s generating facility. This provides the City of Camden some energy diversity; however, given that wholesale energy market pricing is impacted by the increased cost of natural gas and coal, there has not been much price relief from these wholesale energy alternatives. Specifically, due mainly to supply constraints, it is increasingly more expensive to purchase power and those costs are being passed onto the end user.
⦁ Who can we contact at the city to get more detailed information on what is being done and what is a good contact number?
Jon Rorie, City Manager
Tom Couch, Utilities Director
Debra Courtney, Finance Director