Jan. 20—HIGH POINT — High Point is prepared for future cost increases from its power supplier despite a recent asset sale that supporters said would lead to reductions in what the city is charged for electricity.
City Electric Utilities Director Tyler Berrier told the City Council in a briefing this week that the city’s $135 million electric fund has built up reserves of $41.7 million in a “rate stabilization fund” to offset potential increases.
High Point is one of 19 cities in a partnership that owns 75% of a nuclear power plant. The partnership last year voted to sell off 18% of its output in a deal that was initiated by the staff of ElectriCities of North Carolina, the cooperative that sells power to High Point and the other cities.
According to ElectriCities, one of the benefits of the sale will be about a 15% wholesale rate cut in what it charges High Point and the other cities.
This is due to the $56 million a year in sale proceeds that will be coming in, according to ElectriCities.
High Point and the other members of the partnership set their own retail rates that they charge their customers, which don’t necessarily match the wholesale rates the cities are charged to purchase power.
“Being a part owner in the plant, if the plant operator comes up and says, ‘Plant budgets went over this year, we’re going to have to pass on a 5% wholesale increase to every city’ — well, instead of passing that on to our customers, we can level that out with our rate stabilization fund,” Berrier said. “So that provides us some flexibility.”
According to ElectriCities, sale proceeds could also be used for early retirement of the $538 million in bond debt the partnership owes on the nuclear plant. High Point is responsible for $102 million of this amount.
The city pays off a portion of this debt every year when it buys power from ElectriCities. The annual $90 million purchase is the single largest expenditure in the city budget.
Berrier said the debt will be satisfied in 2032.
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