Stantonsburg okays ten years of Progress - Wayne-Wilson News Leader, Fremont, NC

13 September 2007 — After expressing some concerns about the potential electricity rate increases, the Stantonsburg town board voted Monday night to take the first steps toward signing a 10-year contract with Progress Energy, once their current contract with Dominion expires in February of next year.

Mr. Kevin O'Donnell of Nova Consulting came to the meeting to address the Board about the upcoming power supply contract.

According to Mr. O'Donnell, after the town put out a call for bids, the most economical response came from Progress Energy. The contract, which would save the town $1.2 million initially and upwards of $5 million over 5 years, is based on the state of the market. Stantonsburg can absorb the increased costs of the new contract with the two 10% rate increases, which have already gone into effect.

Mr. O'Donnell said that the contract with Dominion, which had been based on a fixed price, had ended up saving the town $2 million over the past five years. Ten years ago, when Stantonsburg signed a contract with Dominion, gas was $1.35 a gallon; the price has doubled, but the price Progress Energy would charge is not double.

Town Manager Davis said that legal counsel had already looked over the proposed contract.

Mr. O'Donnell said that under the new contract with Progress Energy, Stantonsburg would be responsible for paying a demand cost, or the single highest noncoincident peak at any given time of the month.

Mr. Davis told the Board that Stantonsburg has not paid a demand cost since they left Wilson.

Mr. O'Donnell said that once a year, Stantonsburg will set their rates based on the price from Progress Energy, and that the rates could potentially go down if rates from Progress Energy went down.

Commissioner Dan Whitley asked if the town would be stuck in the variable contract for ten years with no way out. Mr. O'Donnell said the only way out, would be if Progress Energy failed to provide service.

Mr. O'Donnell also said that, if the town signs with Progress Energy, they would lose their transmission access from PJMRTO. The cost differential for keeping that transmission access open is more than half a million dollars per year.

Reverend Tyson asked how much the town initially paid for the transmission lines. Mr. O'Donnell and Mr. Davis agreed that the cost was above $2 million including lines, but that cost was split three ways with Lucama and Black Creek, and the three towns still own the substation.

Commissioner Bill Edmundson said, "So we're using the same lines, just other people are putting the power in."

Mr. O'Donnell agreed, but said that under the Dominion contract, the power was priced out to the town delivery point. With Progress Energy, the power is priced to the generation point, and Stantonsburg has to gross up the amount for line loss, which will probably amount to 5%. Dominion pays for that cost, under the current contract.

Rev. Tyson asked if Progress Energy was looking at nuclear energy, other than the Shearon Harris plant.

Mr. O'Donnell said the new plant in 2015 will be on the Shearon Harris site, and though Stantonsburg will be connected to that plant, the town will not own any of that plant, unlike Rocky Mount.

Commissioner Bardin asked how much the rates would increase with the switch to Progress Energy. Mr. O'Donnell replied that the cost would roughly be 25% more than Stantonsburg is paying now, for wholesale.

Mr. Bardin said that that was where the two 10% increases and one 5% increase came in.

Mr. Davis replied that Stantonsburg may not need that last 5% increase now.

Mr. O'Donnell mentioned that if Progress Energy was considering raising their rates, they would need to ask permission from the Federal Regulatory Commission to raise costs, but that cost increase would apply to all towns being serviced by Progress Energy, not just Stantonsburg.

Mr. O'Donnell also said that, in 2019, communities must buy 10% of their energy supplies from renewable resources. This contract with Progress Energy would allow Stantonsburg to meet that obligation.

Mr. Whitley asked if all the towns had to agree on this contract.

Mr. O'Donnell said that all the towns do not have to agree, but the financial cost of doing so is compelling.

Rev. Tyson asked if a town's not agreeing to sign with Progress Energy would affect Stantonsburg.

Mr. O'Donnell said that it would not affect Stantonsburg's investment, because it is pro-rated.

Commissioner Watson asked if the contract seemed to be acceptable to other towns. Mr. O'Donnell said that everyone was pretty well satisfied with it. He said he had painted a gloomy picture before CP&L (Progress Energy) had replied to their call, because he was afraid Stantonsburg would need to raise their rates even further; however, under the new contract, Stantonsburg probably would not need to do any more rate increases. He did add that the North Carolina Utilities Commission would still need to approve the contract before it is official, along with the Federal Regulatory Commission.

Mr. Whitley asked if Mr. O'Donnell needed a commitment from the Board that night. Mr. O'Donnell said that the sooner the commitment is made, the sooner Progress Energy can make a filing at the Utilities Commission, and the sooner that starts the better. He wanted to get signed copies to Raleigh by Friday.

Mr. Whitley then motioned that the Board go with Mr. O'Donnell's plan, and Mr. Bardin seconded. The motion passed with no opposition.

Mr. O'Donnell said that Town Manager Gary Davis had been a major asset in getting the town to this point, with much effort.

"A lot of sweat and real close to tears with this one," Davis agreed.

Back to this week's News Leader

Issue of 13 September 2007

Headlines

Briefs

upcoming events

Dean Barnes was born to teach, guide, travel

police report

Stantonsburg approves ten years of Progress

WCPS delivers 'Meals on Wheels'

Chief Hunt cracks down on school-zone speeders

Pikeville town-hall renovation thwarted again

Wayne schools go smoke-free next year

Pigskin tiebreaker draw goes to Hill

Football: Cougars run when Falcons falter, 59-7

JV, Freshman Football: JV Falcons take loss

Tennis: Lady Falcons beat Kinston

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