Overview:
• Pricing for the average residential customer is estimated to rise 6.5% each year for the next two years.
• Customer: ‘Many households are already struggling to pay their bills, and shifting the cost of supplier failures onto customers is unfair.’
• PWC CEO: ‘Unfortunately, uncontrollable cost increases are out-pacing cost savings exponentially.’
The Fayetteville Public Works Commission on Wednesday reluctantly but unanimously voted to raise electricity rates and fees this year and next year.
The price increases take effect May 1, then again May 1, 2027.
The PWC is Fayetteville’s city-owned public utility. It provides water, sewer, and electric service to much of Fayetteville, Hope Mills, and some areas outside city limits. It buys most of its electricity wholesale from Duke Energy.
The price-increase vote followed a public hearing in which four customers spoke against the increase. More than 20 sent written comments over the past two weeks in opposition. PWC Vice Chair Ronna Garrett said this proposed rate increase has generated more phone calls, emails, and other comments from the public than she has ever seen since becoming a commissioner in April 2021.
PWC estimated rates and fees for an average residential customer using 1,000 kilowatt hours in a month will go up 6.5% this year, followed by another 6.5% increase next year. As of May 1, 2027, that customer will pay $16.61 more per month, which works out to an increase of about 13.45% spread across the two years, according to a presentation about the new prices.
“Before PWC considered any rate increase, staff was intentional about spending and implemented significant cost saving measures across the business,” CEO Timothy Bryant said in a statement on Wednesday afternoon. “Unfortunately, uncontrollable cost increases are out-pacing cost savings exponentially.”
‘We’re Not Trying to Make Any Money’
Commissioners said they would prefer not to raise prices.
“You got to remember: We are [a] nonprofit organization here. We’re not trying to make any money, and we’re trying to keep the rates low,” PWC Chair Richard King said shortly before the board voted for the new rates and fees. He said he listened to and read the comments and suggestions that people made, and the PWC will consider them all.
The increase comes as customers have been complaining on social media about unexpectedly high utility bills following two winter storms and stretches of exceptionally cold days. And it comes amid growing public concern in Fayetteville about electricity-hungry data centers coming to town.
Some comments from PWC customers about the rate increase:
- “You have an option for people on social services to have an income based price option,” said Alton “A.J.” Cooper. “I believe it is the best idea in this modern economy to best help the citizens of Fayetteville to create an income-based option for all residents of Fayetteville. And if you are going to charge companies something, you should raise the rates on these companies instead of the residents.”
- “It is an earth shattering NO from me,” wrote Tammy Dostie. “The rates are high enough as it is. How do you all expect those of us on a fixed income to come up with more money, that we simply don’t have?!”
- “The electric company should focus on supporting its customers, especially low-income families, rather than raising rates to cover problems caused by supplier issues,” wrote Gregg Faulker. “Many households are already struggling to pay their bills, and shifting the cost of supplier failures onto customers is unfair.”
- Steve Harper asked the commissioners to consider a smaller price increase. “Look at the economy today. A lot of people [are] suffering. Poor people, senior citizens on fixed incomes, and even middle class people, are suffering today.”
The Kilowatt Hours
PWC’s current pricing for most residents has a $24 per month facility charge, plus 9.2 cents per kilowatt hour during off-peak demand times (21 hours per day), and 14.1 cents per kilowatt hour during on-peak times (three hours per day).
Starting May 1, the prices rise to $26 for the monthly facility charge, 9.8 cents per kilowatt hour of off-peak demand, and 15 cents for on-peak demand.
In May 2027, the prices rise to $28 for the monthly facility charge, 10.3 cents per kilowatt hour during off-peak demand times, and 15.9 cents per kilowatt hour in on-peak hours.
On peak hours are 6 a.m. to 9 a.m. during cooler months, and 3 p.m. to 6 p.m. during warm months.
With the May 1 increase, PWC’s prices will have risen 16.5% since 2020, compared to the national average increase of 34%, according to a statement from PWC.
“The rates are anticipated to increase PWC’s overall revenue by 5.5% in each of the next two years to cover the actual cost of providing utility services,” the PWC’s statement said.
PWC documents list several factors behind the price increases:
- It expects to pay $16 million more per year to buy power from Duke Energy.
- A $6 million annual increase in debt service costs for capital projects.
- A $4 million annual increase in costs for construction and maintenance of electrical systems, plus operating expenses.
The utility said it has cut expenses, but it still needs to increase electrical service revenue by $12.1 million in the upcoming fiscal year, and $12.8 million the next.
Even with the increase, the PWC said its residential electricity prices will be lower than those of the other electricity providers in Cumberland County. Those are Duke, Lumbee River EMC and South River EMC.
Senior reporter Paul Woolverton can be reached at pwoolverton@cityviewnc.com.
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