Days of low power costs may end

By Mary Ann Enloe | Nov 15, 2012
When wholesale power costs rise, Waynesville leaders will need to find a way to pass them on or reduce the town's general fund reliance on the electric fund.

Waynesville has a sweetheart of a deal right now with the newly merged Duke/Progress power wholesaler but changes are in the wind, the town's governing board was told Tuesday night.

The town contracts with Nova Energy Consultants, Inc. on issues concerning the municipality's electric system, and met Tuesday with Nova representative Kevin O'Donnell.

Waynesville's agreement to purchase power from the giant power wholesaler expires in 2015. O'Donnell told the mayor and board of aldermen to expect wholesale increases of between 20 and 25 percent when the contract is renegotiated. That could translate to a 17 percent hike passed on to Waynesville electricity consumers or otherwise absorbed by the town.

Waynesville's governing board has not increased electric rates in several years. It authorized an increase in 2009 but did not implement it. Town electricity customers now enjoy one of the lowest rates in North Carolina. Of the 106 systems reporting, Waynesville is the 16th lowest. Nova has already contacted Duke/Progress about Waynesville's contract and town officials will meet with Duke/Progress in January.

Historically Waynesville transfers money from its healthy electric fund to the town's general fund to keep the ad valorem tax rate low. According to the town manager's budget message to the board for 2012-13, this transfer amounted to 11 cents on the tax rate. Such transfers are permitted by state law for small independent systems like Waynesville's.

O'Donnell concluded his presentation by commending Waynesville's mayor and board of aldermen and saying, "We have low electric rates and it is Nova's goal to keep them low for many years to come."

In other business, the town firmed up agreements with the N. C. Department of Transportation with regard to the Howell Mill Road expansion project. The town will be responsible for about $434,500 for the relocation of water and sewer lines and will resume the maintenance of those lines. Sidewalks will cost the town about $40,000 or 30 percent of the total NCDOT expenditure. Although the project is largely outside the town's corporate boundary, upon completion of the project in fiscal year 2014-15 the town will accept responsibility for sidewalk maintenance.

The first of three annual principal installment payments for water and sewer line relocation is due in fiscal year 2013-14. Town manager Marcy Onieal said that no increase in funding levels is necessary to pay $150,000 per year for three years for the water line relocation and upgrading from a 6-inch diameter line to a 10-inch diameter line.

The Waynesville governing board meets the second and fourth Tuesday of every month at 7 p.m. in the Town Hall, unless otherwise advertised. Meetings are open to the public.


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