What You Should Know About Electric Rates
Provided to the Cities in Eastern in North Carolina for their Customers
(this information was prepared specifically for cities who are
participants in the NC Eastern Municipal Power Agency)
NC Public Power and the cities who own and operate their electric
service want their customers to know about their electric rates.
All electric providers in the country experienced wide fluctuations
in costs over the past year. There are a number of factors to consider
and we want customers to understand those factors.
Coal Costs -- Coal costs have not decreased this
year and we do not expect those costs to decrease in the near future.
Coal is delivered to power plants by rail. Costs for rail transportation
of coal have more than doubled in the past four years. Electric
providers, like your city, are customers of the railroad. In the
United States, there are a few railroads with no competition so
electric providers are “captive” to the costs the railroads
impose for transporting coal. Developing nations like China and
India are demanding coal to support their rapid growth and their
new coal plants. That demand affects the supply of coal available
in the United States. Great demand for a product drives the cost
up. We are in competition with other countries for products like
coal.
Natural Gas -- Natural gas prices have fallen
in the past few months which is good news. The cost of natural gas
does not have a big effect on electricity costs with your provider.
Less than three percent of your electric use is generated from natural
gas, in normal situations. Producing electricity using natural gas
is expensive, but natural gas power plants are built because they
are easy to power up and down when we need to supply more electricity.
Natural gas power plants are used to produce electricity during
high demand time periods. “Peak” times, when people
use more electricity, include the hottest time of the day in the
summer, the coldest time of the day in the winter and other times
when households are typically consuming a lot of electricity. During
peak times, electricity is more expensive to produce (the demand
for it is great).
Nuclear Energy -- Nuclear energy is a very efficient
way to produce electricity. And, nuclear generation of electricity
is relatively inexpensive when compared to other types of electric
generation. Your city does own part of nuclear plants together with
other cities. Building a nuclear plant is expensive but once built,
these plants generate a lot of electricity quite cost effectively.
Nuclear plants use complicated technology and are subject to stringent
federal and state regulations to ensure public safety. Nuclear power
plants usually plan ahead to “power down” to refuel
and for maintenance. Sometimes a nuclear plant will have an “unplanned”
shutdown. Nuclear power plants are not easy to power back up so
it takes several days for a nuclear plant to generate electricity
again at full capacity. When a nuclear plant is not generating electricity,
the needed electricity must be generated using other plants -- coal
and natural gas.
This past summer, the nuclear plants had several unplanned shutdowns
so the electricity needed was generated by the other plants. Cities
do not operate the nuclear plants so we cannot make the decision
about when to shut down and use other generating plants. We depend
on the company that operates the plant to make those decisions.
Air Quality Improvements at Coal Plants (scrubbers)
-- Federal regulations to improve air quality are in effect. In
North Carolina, our legislature passed even more stringent rules
than the federal rules, called Clean Smokestacks legislation. Unlike
other countries in the world, in the United States everyone wants
clean air. Installation of the new scrubbers is in process and your
city does have a cost to incur as a result of this mandate. These
costs are built into the cost of electricity.
City-owned electric service provides a number of benefits to its
customers. Reliability means you have power when you need it; response
means when your power is out, it is restored quickly. Local customer
service means your city uses local employees who know their customers.
We call this the Public Power Advantage. These are benefits cities
provide that distinguish them from their competitors.
What can customers do? First, customers can reduce the amount of
electricity they use by adopting energy efficient practices in your
home. Families can use your heating and air conditioning system
efficiently and take some small, easy steps to weather-proof your
home. Visit www.ncpublicpower.com
for tips or contact your city for a list of ideas.
Learn about coal transportation costs. A good source of information
is Consumers United for Rail Equity at www.railcure.org.
Cities need you to contact your Member of Congress and urge them
to address this issue in Congress. Customers of the railroad are
being held captive because of railroad monopolies. We need help
on coal transportation costs.
Issues facing electric providers today are complex. All electric
providers, including large investor-owned utilities and rural electric
cooperatives, are facing these same issues and have implemented
rate increases. Cities in North Carolina are working hard to keep
electric costs and your costs down. Call your City for advice on
energy-efficiency programs to help reduce your family’s usage
and your electric bill.
Please contact your City provider for details.
ElectriCities Contacts: Jeanne Bonds, Ken Raber - 1-800-768-7697
ext. 6336, 6218
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