What is ElectriCities?
ElectriCities is a not-for-profit government service organization representing more than 90 cities, towns and universities in North Carolina, South Carolina and Virginia that own electric distribution systems.
Why was ElectriCities formed?
In the mid-1960s, private utilities and electric cooperatives were battling over territory. The N.C. General Assembly passed the 1965 Electric Act to resolve many of the disputes, but this created new difficulties for municipal systems by restricting their right to serve customers in newly annexed areas.
ElectriCities was organized to provide the municipal systems a unified voice to speak out in the legislature. The group was unable to stop the bill's passage but decided to form a permanent alliance to be an advocate for Public Power and its customers statewide.
In 1983, at the request of the cities, the Legislature expanded this voluntary association by allowing North Carolina’s "electric cities" to form an agency to aid municipalities in the construction, ownership, maintenance, expansion and operation of their electric systems.
What does ElectriCities do?
It provides customer service and safety training, emergency and technical assistance, communications, government affairs and legal services. This consolidation saves money for its members, including Wilson Energy.
For example, aerial device testing, infrared scanning and substation maintenance training cost significantly less through ElectriCities contracts than if the cities contracted the services themselves.
ElectriCities schools and workshops keep utility personnel up-to-date on how to properly handle hazardous substances, customer service, utility credit and collections, load conservation marketing and other aspects of the business.
Training programs encourage safe work habits and reduce potential liability. Lineman training and municipal transformer schools teach step-by-step safety measures to use in daily duties.
Since 1986, ElectriCities has operated an Emergency Assistance Program, which allows the state's 74 municipal electric systems to restore power quickly after ice storms, tornadoes, hurricanes and tropical storms. The program works by dispatching crews from cities that have not been impacted or have already restored most of their outages to cities that need extra help.
ElectriCities also provides management services to the state’s two municipal Power Agencies: North Carolina Municipal Power Agency Number 1 (NCMPA1) and North Carolina Eastern Municipal Power Agency (NCEMPA).
What are the Power Agencies?
Most Public Power cities have been in the electric business for 100 years or more. Originally, many cities and town built small generators after investor-owned utilities refused to serve these communities. Later, as their populations grew, cities became wholesale purchasers of electricity from the private utilities.
During the energy crisis of the mid-1970s, the state needed additional power plants, but the private utilities were having difficulty raising the necessary capital for construction. The municipalities were concerned because of their obligation to serve their customers.
After considering concerns about reliability, cost and long-term supply of electricity, the N.C. General Assembly enacted legislation to enable cities to join together to form Municipal Power Agencies, paving the way for cities to enter the generation business. This was supported by a statewide referendum in 1975, in which N.C. voters agreed to allow municipalities to jointly build, finance, own and operate electric generation and transmission facilities in partnership with the private utilities.
North Carolina’s two municipal power agencies, NCMPA1 and NCEMPA, own portions of five nuclear plants, including Brunswick Units 1 and 2 in Brunswick County and Shearon Harris Nuclear Plant in Wake County, and two coal-fired plants, Mayo Plant and Roxboro Unit 4 in Person County, totaling more than 1450 MW of generation capacity.
If the agencies own the plants, why is the cost of electricity so high?
After the NCEMPA cities and Carolina Power & Light (now Progress Energy) began construction of Shearon Harris, a nuclear power plant at Three Mile Island, Penn., suffered a severe core meltdown. In response, the U.S. Nuclear Regulatory Commission greatly tightened the rules and regulations covering these plants, enhancing safety but making construction much more expensive than planned.
The NCEMPA cities are not scheduled to retire the debt until 2025. As of January 2010, Wilson's share equaled almost $379 million.
For every dollar on a Wilson Energy customer's bill:
- 39 cents goes to retire the debt on the power plants.
- 43 cents pays for fuel costs and operating expense of those plants.
- 18 cents pays for the operating costs of Wilson Energy's employees, all the people who work on the local power grid and respond in both clear weather and storms to your assistance.
Will bills go down as the debt is retired?
The debt payment paid by NCEMPA actually peaked in 2008/09 and is starting to decline, but sharp decreases are still more than a decade away, barring refinancing.
But Wilson Energy's staff of professionals runs a lean electric operation that has proven itself reliable, even in North Carolina’s unpredictable weather. Its operating costs average 1.4 cents per kilowatt hour, less than most electricity providers in the state, including those in the private sector.
Does ElectriCities provide power to its members?
ElectriCities is a service organization, not a power supplier. Its members receive their electricity from their participation in power agencies or by purchasing it from investor-owned utilities such as Duke Power and Progress Energy or electric cooperatives.
How is ElectriCities funded?
ElectriCities is a not-for-profit organization that is financed through membership fees and dues, as well as through rate and service revenue and tuition from training programs and workshops. With a reorganization several years ago, a new status was created to allow for associate members, which include the South Carolina and Virginia cities and university systems.