On April 1st, the Towns of Smithfield and Selma both received a 4.5 percent wholesale rate decrease in the cost they pay for electricity, which is then resold to power customers in their towns. Both towns are members of ElectriCities who purchase power from Duke Progress Energy.
After receiving the substantial discount, one town voted to pass along the savings to their residents, while the other municipality is keeping the extra money for now.
On April 11th, Selma Mayor Cheryl Oliver and members of the Selma Town Council voted unanimously to pass along an average 2.5 percent rate reduction to residential, business and pre-pay power customers. Mayor Oliver also took it a step further. She received unanimous support to reduce the deposits some electrical customers have to pay – based on their credit history – from either $300, $600 or $800 to $200, $400 and $600.
According to a rate study presented by Selma Town Manager Jon Barlow, the average residential customer who uses 1,000 kWH could see an average decrease in their monthly bill of around $3.38 including an adjustment in the base rate. Residents who use 1,500 kWh would save about $5.50 more per month following the decrease.
The lower deposit structure and reduced electrical rates will take effect on July 1st.
The Town of Smithfield received the same wholesale rate decrease but for now has no current plans to pass along the savings to its customers.
“The Town has made no determination at this time,” according to Smithfield Public Information Officer Tim Kerigan. “This is a very important decision and we will diligently research possibilities throughout the budget planning process that extends into June, so that we can make the best informed decision for the Town, our citizens and our businesses.”
Smithfield town leaders defended the decision not to pass along the savings, at least for now, saying the rate decrease will only last for 3 years. A projected 3 percent rate hike could take place in 2020 and another 3 percent rate hike is possibly in 2021.
Savings Add Up
By passing along the savings to their customers now, the Town of Selma will save the average homeowner a minimum of $121.68 over the next 3 years before any rate adjustments are needed. And that’s important to Selma.
“Our council members and I are always looking for opportunities to make Selma a more affordable town,” Mayor Oliver told WTSB News. “This reduction in electric rates is an example of that focus. Not only are we implementing a reduction in kilowatt rates, but we are revamping our rate structure so that our customers should incur less spikes in their electric bill that are related to seasonal weather changes.”
“It is important that our deposit amounts, as well as our rates, do not discourage anyone from moving to Selma,” Mayor Oliver stated.