PWC Rates Stay Steady
The Utility's Board Reviews the effects of a contract

<< Return to previous page

Feb. 10, 2005

Originally published on Thursday, Feb 10, 2005 in the Local & State category of the Fayetteville Observer.

By Don Worthington
Staff writer

An energy-supply contract has allowed the Public Works Commission to keep its electricity rates steady.

PWC officials estimate their cost of electricity would be $12 million more had they not negotiated a new contract with Progress Energy. The contract started July 1, 2003, and runs to 2012.

PWC General Manager Steve Blanchard said rates would have increased 4 percent to 5 percent if the old contract was still in place.

The PWC board Wednesday reviewed a year’s worth of contract data.

PWC board members said they were pleased with the result considering the escalating cost of natural gas.

When the PWC negotiated the contract with Progress Energy, it based its discussion on a $3.50 decatherm price. The price is now $8.

Some of the price fluctuation has been passed on to the consumer. The PWC has collected about $3 million in power-cost adjustments this fiscal year.

The contract allows the PWC to purchase up to 279 megawatts a day to meet its basic electricity needs. The contract then allows PWC to purchase additional power from Progress Energy, buy it from other suppliers or generate it at the Butler-Warner plant in Eastover -- whichever is the cheapest option.

At peak times the PWC uses as much as 447 megawatts daily.

Megawatt costs

Securing transmission of electricity over Progress Energy lines has affected some power purchases, PWC officials said.
The average price the PWC paid for a megawatt was $19.09 for its basic system needs.

The PWC spent $58 per megawatt to purchase power from third parties, $65 per megawatt for additional electricity from Progress Energy and $78 per megawatt to generate electricity at the Butler-Warner plant.

The PWC made $200,000 selling electricity to Progress Energy during the fiscal year.

<< Return to previous page