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Electric rates not expected to rise for Fayetteville utility customers

But water rates would go up in 2023, according to PWC budget


The cost of electricity would not change next year, but water rates would increase, according to a budget presented to the Fayetteville Public Works Commission on Wednesday.

The commission heard the first of three scheduled presentations on its proposed fiscal year 2023 budget. It calls for overall budget outlay of about $397 million, which would be a 10.9% decline from 2022 spending.

“This is a fairly lean budget,” said Elaina Ball, PWC’s president and CEO.

In 2020, the commission voted to delay water rate increases because of the financial effects of the COVID-19 pandemic. Those higher rates will take effect for 2023, Ball said.

 PWC spokeswoman Carolyn Justice-Hinson said after the meeting that the new water rates will vary because they depend on the customer’s location and water usage.

"The way it's probably best communicated for most residential customers is to say a customer with water and sewer services who lives inside the city of Fayetteville and uses 4,000 gallons a month would have about a $3 monthly increase," Justice-Hinson said.

During the meeting, Ball highlighted the 10.9% decrease in overall spending.

“We focused on funding key initiatives in our strategic plan as well as our construction and capital improvement plans to support customer improvement plans and reliability,” Ball said.

She noted that the utility faces challenges of higher costs and a competitive jobs market.

“We’re no different than other organizations in the world but certainly in the region,” she said. “We’re experiencing challenges attracting and retaining talent, and we’re experiencing cost escalations as a result of global supply-chain challenges. As a result, we’ve trimmed everywhere we can to be able to support our proposed merit increase for our employees of 4%, which is higher than last year’s 2%.”

With rising costs for fuel and chemicals, Ball said, PWC’s leadership team had to find offsetting savings in other spending.

“But overall, I feel confident we’ll be able to achieve everything that we have set forth in our strategic plan and in our plan for 2023 with this budget,” said Ball. “But it is going to be a challenge.”

The budget planners’ objective, Ball said, was “putting forth the leanest budget so we could avoid having to make any adjustments to electric base rates.”

Service and reliability are key objectives, along with water supply and quality, she said.

“We’re planning for expansions at our plants. We’re rehabilitating and replacing infrastructure to support reliability and water quality,” Ball said. “And we’re conducting different pilot studies to address pollution and be prepared for new water-quality standards that may be coming down the pike.”

The budget supports the financial health of PWC, keeps borrowing costs low and affords a bigger slice of revenue for the city of Fayetteville, she said.

The city would receive roughly $24 million from PWC in cash and services. Payments in lieu of taxes would increase to $12.4 million in cash – more than $1 million a month, she said.

That rounds out to a 4.7% increase for the city.

The utility works with the city on services such as street lighting and annexation “and a host of other things, too,” Justice-Hinson said.

The budget lists PWC's total assets at $1.44 billion and maintains reserve funds at current levels.

A public hearing on the proposed budget is scheduled for May 25, and a vote on adopting it is set for June 8.

Michael Futch covers Fayetteville and education for CityView TODAY. He can be reached at mfutch@cityviewnc.com. Have a news tip? Email news@CityViewTODAY.com

Fayetteville, PWC, electric rates, water rates, utilities