Electricity rates and consumer electricity expenditures have wide ranging impacts on critical community and economic development issues in the state. New research from the Environmental Finance Center at UNC Chapel Hill demonstrates how variable pricing is across the state and the large number of factors that influence costs and pricing. Figuring out why one utility’s prices are higher than another can be difficult. However, in at least one region, there is general consensus about why prices are relatively high.
Last week big news hit the region: a $1.2 billion deal between the NC Eastern Municipal Power Agency (NCEMPA) and Duke Energy Progress could mean lower energy prices for many communities in the eastern part of the state.
Since 1982, NCEMPA has provided wholesale power to 32 cities and towns in eastern North Carolina, including some of the largest cities in the region. In many of these communities, electricity prices have historically been higher than regional averages due to a legacy agreement that gives NCEMPA partial ownership in several power generation plants. Along with this partial ownership comes a share of the cost of building and maintaining the plants, leaving NCEMPA with significant debt – which then gets passed on to customers in the form of higher rates.
Duke Energy has agreed to buy out NCEMPA’s interests in the plants, which could reduce NCEMPA’s debt by 70 percent – from $1.9 billion to about $480 million. Though the exact impact on rates for each community will vary, customers could see lower power bills as a result of a significant decrease in NCEMPA’s costs.
Although electricity prices in North Carolina are slightly lower than the US average, the affordability of electricity rates is always a concern. At a time when electricity is very much in the news, the EFC’s analysis of Residential Electricity Rates and Pricing in North Carolina summarizes the different residential electricity rates and pricing for all North Carolina utilities. In the wake of the recent agreement between Duke Energy and NCEMPA, the proposed U.S. EPA regulation of carbon emissions by power plants nationwide, coal ash spills in North Carolina (and the potential cost of clean-up and prevention of future spills), and the spread of solar power around the state, there has seldom been a time when electric power was more in the public eye.
The EFC’s report provides a comprehensive, comparative review of how utilities in North Carolina price electricity for residential customers. This report summarizes rates and rate structures from over 98% of residential electric utilities statewide and provides graphical analysis of rate setting practices. The report is accompanied by an interactive dashboard, a powerful tool that allows users to compare residential electric rates across the state at various consumption levels.
EFC Publications on NC Electricity Pricing
- Residential Electricity Rates and Pricing in North Carolina 2014
- 2014 North Carolina Electric Rates Dashboard
- Charging into the Question of Affordability: Residential Electric Rates in North Carolina from 2011 to 2013
- Watts Up with Cost Recovery for Municipal Residential Electric Utilities in NC?
News Articles on NCEMPA and Duke Energy Progress Agreement
- Duke Energy Progress to Purchase NCEMPA Generation Assets
- Duke Deal Could Lower Power Bills in Eastern NC Towns
- Fitch: US Public Power Deal Could be Positive for Constituents
- 1.2 Billion Deal Would Cut NCEMPA Debt 70 Percent to about $480 Million
Lexi Kay is the Marketing and Outreach Coordinator at the Environmental Finance Center at UNC Chapel Hill.