GUC increasing electric rate 3.3 percent starting April 1

GUC electric customers will see their rates increase 3.3 percent over 24 months because of higher-than-expected energy costs in 2022. It is the first rate increase since 2013, and the utility decreased rates in 2015.

The Greenville Utilities Commission Board of Commissioners approved the rate adjustment that goes into effect April 1 for all electric rate classes, said Steve Hawley, public information officer/communications manager.

The increase will be about $3.59 a month for a typical residential customer who uses 1,000 kilowatt hours of electricity in a month, with load management, Hawley said. GUC provides power to most of Pitt County, although most municipalities outside of Greenville are excluded.

It is the first time in nine years that GUC has increased its electric rate, Hawley said. It is needed because the N.C. Eastern Municipal Power Agency, GUC’s electric supplier, has an agreement with Duke Energy Progress to “true-up” the cost of of electricity production once a year so it reflects the actual cost of its production, Hawley said.

Sometimes the true-up requires the power agency to pay Duke extra money, usually a few million dollars that the power agency covers.

The true-up for 2022 was larger, $53 million, Hawley said.

“It’s for 2022 and if you remember in the late fall and winter it got very cold and gas prices had really gone up and it affected their cost of being able to generate energy,” Hawley said.

The power agency sells electricity to 32 public power agencies, including Greenville. GUC’s share is $12.8 million or 4.7 percent of annual purchased power-related charges, Hawley said.

The power agency is giving communities two years to pay their share, starting in April. The last payment will be March 2026 and the 3.3 percent increase will be removed at that time, he said.

Staff decided to not use GUC’s fund balance to pay off its share of the true-up, Hawley said.

“If you draw too much out of fund balance it affects our ability to get good credit ratings for when we sell bonds and that would end up costing our customers more,” he said. “We have a lot of large projects we are not only working on but are planning to work on in the near future and distant future.”

GUC’s last electric rate increase was in 2013, Hawley said.

In 2015, Duke Energy Progress purchased the generating assets the power agency and its members held in five power plants across the state. That purchase reduced the debt GUC and other power agency members held for the construction of some of those plants, which allowed the utility to reduce its electric rates.

“When NCEMPA (the power agency) did the asset sale we were able to lower our rate. We had a plan to keep our rates consistent and low for five years but we’ve been able to stretch that out to nine years so far,” Hawley said.

“With inflation and those tremendous inflationary pressures, we’ve been doing everything we can to use that plan and do some other things to extend that commitment for as long as possible.”