I don’t want to pay your electricity bill. I am sure that you don’t want to pay mine, either. In Selma, our electricity bills contain a lot of taxes. Anything above what we would normally pay by purchasing electricity through Progress Energy is in effect, a tax. The rate we are charged per kilowatt hour in Selma is significantly higher than Progress Energy would normally charge residential retail customers. I have done the math. That is why I kind of like the new “prepaid electricity” concept that Selma is moving towards.
With the majority of Selma residents being renters rather than homeowners, we have a higher than average possible transient population. This can lead to people skipping out on their utility bills. To combat this, the town instituted a hefty deposit requirement for new utility customers. I understand the concept, but also know that a lot of people cannot handle the $450 or so deposit. I know that when I bought my house in town, I would not have been able to fork out for that sort of deposit after all the money I paid just to be able to move in. I realize that the town has a different policy towards actual homeowners but, I am just saying it is difficult for many.
When people leave bills hanging and a deposit does not cover the cost, we, the remaining customers and townsfolk, pay for it one way or another. That is just the simple economics of it. The same principle works for auto or health insurance and private utility companies. We all pay for claims and losses in the end.
The pay as you go principle works well for a lot of people. I have a prepaid cell phone for my wife and we are happy with it for the little bit of use it gets. We can put as much or as little money on our account as we wish, depending upon our usage and budget. For a lot of people, this may be the way to go with electricity bills.
It is bad enough that our trash collection will be going up, which shows up on our utility bills. It is good to see that at least the town is considering ways to alleviate the heavy burden of paying utility bills all at once. Quite honestly, there have been a few times where it was a struggle for us to meet the entire bill. Money is tighter than it used to be for us, but I still make a comfortable living.
If you are like me, you struggled with getting two utility bills in the same month last month. I see that the due date is now different, and I am hoping it will not be permanent. Good grief, that would throw my entire monthly budget into chaos, since for almost nine years I have been budgeting to have my utility bill paid in the middle of the month and my mortgage payment at the end of the month. I am sure that others will have the same frustration. My utility bill can run as high as $400 a month and I don’t know about you, but a $400 swing across two weeks will take some getting used to.
The beautiful part of the prepaid or pay-as-you-go plan is that people can put money on an account ahead of time and their usage draws against that account. For those who can’t afford a whopping bill, are renters, are temporary residents, or frequently delinquent in paying their bills, this may be a great solution.
I have long said that if I am willing to complain about something, I had better be equally willing to compliment. I am complimenting the Town of Selma for the innovation. I am sure that the town would get a lot more compliments from everybody if they would change the rate we are paying on our residential electrical service. The town charges about 13 cents per kilowatt hour whereas Progress Energy direct residential customers pay 9.15 (or 10.15 depending upon the season) per kilowatt hour. Multiply that times the number of kilowatt hours you use and you will be amazed at how fast those extra three or four pennies adds up. One month that made about $100 difference in my bill. That extra $100 is what should be considered extra taxation.
If the town is going to be an electric company, I applaud the effort to be more flexible for its customers. Still, it would be better if we would just get out of Electricities all together, sell off our electrical grid, and let the private sector deliver the same service for less money.
Showing posts with label electricity. Show all posts
Showing posts with label electricity. Show all posts
Thursday, June 09, 2011
Friday, April 09, 2010
Column for April 8, 2010
"If you can find it in the Yellow Pages, government should not be doing it." I have heard that saying many times and I am very much in agreement with that sentiment. Whether it is landscaping, trash pick up, water supply, or electricity delivery, if I can find it in the Yellow Pages, then perhaps it is worth investigating termination of government services and leaving such services to the private sector. That is unless our own governmental bodies can perform such services more efficiently and cheaply than private industry can.
For instance, if Selma wants flowers planted around our downtown (oops, perhaps I should call it "Uptown", but the "rose by any other name" principle applies) and town employees can do so efficiently and cost effectively as opposed to hiring a landscape crew, then I am all for it.
However, I am not as concerned about pansies in downtown as I am about our electricity bills. Last November, one mayoral candidate ran on a platform that included lowering electricity rates in town. Though I agree with that sentiment, short of selling off the town's electricity system, laying off employees, and letting Progress Energy sell us our electricity, it ain't gonna happen. But I am all for that very idea.
I have absolutely nothing against town employees working a job they are paid to perform. This is not personal; it is a matter of efficient government and personal finance. The town electrical workers do a good job at what they do. I remember when the last hurricane hit this area several years ago and I sat under my carport when a transformer blew out just a couple of houses over. We got to watch some town electrical workers quickly and efficiently replace the dead equipment during the eye of the storm, restoring electricity within a few hours.
My wife and I stared in amazement at our latest town electricity bill. It was the highest we have ever had in over seven years of living here in the booming metropolis we call Selma. For a fairly mild month and only a 29-day billing cycle, we were stunned. So I did a little research to see if things would have been cheaper if we got our electricity directly from Progress Energy instead of the town.
I have heard for several years that our electricity rates were not appreciably higher than those of Progress Energy were. In effect, the town is a wholesale customer through Electricities. State law allows municipalities to purchase power wholesale and retail to its constituents. The town buys low and sells high. I have no problem with a business making a profit, but when a town gouges its citizens, I tend to get irate.
I went to the Progress Energy web site and downloaded the current electricity rate. They currently charge $6.75 per month base rate plus 9.557 cents per kilowatt-hour. Selma customers pay $7.50 base rate plus about 13 cents per kilowatt-hour. I did the math and that equates to approximately $100 on my bill this month. Therefore, I paid an extra $100 in TAXES this month to the Town of Selma. Yes, I said taxes, not electricity bill payments. If it is above the normal cost that I can purchase through the local power provider and the town gets the revenue, then this is a tax, not a payment for product or service.
The good thing I can say is that the town has finally dropped the line item for a fuel recovery surcharge. Basically we had an extra charge for a long time that was called a fee when it was really a rate hike without formally calling for a rate hike or having to publicize a rate hike. Whether that surcharge was dropped or the rate was changed to accommodate the increase, I don't care, as long as the bill is more honest in presentation. We do, however, continue to have a sales tax. So we pay extra on our electricity rates and then get taxed on that overage, making it even more insulting. It is a tax on a tax.
Whenever Progress Energy proposes a rate hike for residential customers, they have to get that hike approved through the state utilities regulation authorities. When they decide to hike rates on wholesale customers, such as the Town of Selma and every other Electricities member municipality, I am told that no such approval is necessary. I got that straight from a former Selma Town Manager. That means that we are subject to much more capricious energy prices than retail customers are.
I have long questioned the value of owning our own public utility. When I lived in Smithfield prior to buying my house in Selma, I was outside of their town's municipal grid and fortunately could pay lower electricity rates. Since I now live smack in the middle of Selma, I am captive to higher rates.
I firmly believe that we as a town should investigate the savings we could have by eliminating personnel costs, operations, vehicles, facilities, and the like by not owning our own public utility. I am willing to wager that we could operate the town for a year on the proceeds of a sale of the town's power grid to Progress Energy. I am all for it and my tax bill will go down $100 a month. Of course that $100 differential is not deductible on my income tax return as local taxation, but it should be.
For instance, if Selma wants flowers planted around our downtown (oops, perhaps I should call it "Uptown", but the "rose by any other name" principle applies) and town employees can do so efficiently and cost effectively as opposed to hiring a landscape crew, then I am all for it.
However, I am not as concerned about pansies in downtown as I am about our electricity bills. Last November, one mayoral candidate ran on a platform that included lowering electricity rates in town. Though I agree with that sentiment, short of selling off the town's electricity system, laying off employees, and letting Progress Energy sell us our electricity, it ain't gonna happen. But I am all for that very idea.
I have absolutely nothing against town employees working a job they are paid to perform. This is not personal; it is a matter of efficient government and personal finance. The town electrical workers do a good job at what they do. I remember when the last hurricane hit this area several years ago and I sat under my carport when a transformer blew out just a couple of houses over. We got to watch some town electrical workers quickly and efficiently replace the dead equipment during the eye of the storm, restoring electricity within a few hours.
My wife and I stared in amazement at our latest town electricity bill. It was the highest we have ever had in over seven years of living here in the booming metropolis we call Selma. For a fairly mild month and only a 29-day billing cycle, we were stunned. So I did a little research to see if things would have been cheaper if we got our electricity directly from Progress Energy instead of the town.
I have heard for several years that our electricity rates were not appreciably higher than those of Progress Energy were. In effect, the town is a wholesale customer through Electricities. State law allows municipalities to purchase power wholesale and retail to its constituents. The town buys low and sells high. I have no problem with a business making a profit, but when a town gouges its citizens, I tend to get irate.
I went to the Progress Energy web site and downloaded the current electricity rate. They currently charge $6.75 per month base rate plus 9.557 cents per kilowatt-hour. Selma customers pay $7.50 base rate plus about 13 cents per kilowatt-hour. I did the math and that equates to approximately $100 on my bill this month. Therefore, I paid an extra $100 in TAXES this month to the Town of Selma. Yes, I said taxes, not electricity bill payments. If it is above the normal cost that I can purchase through the local power provider and the town gets the revenue, then this is a tax, not a payment for product or service.
The good thing I can say is that the town has finally dropped the line item for a fuel recovery surcharge. Basically we had an extra charge for a long time that was called a fee when it was really a rate hike without formally calling for a rate hike or having to publicize a rate hike. Whether that surcharge was dropped or the rate was changed to accommodate the increase, I don't care, as long as the bill is more honest in presentation. We do, however, continue to have a sales tax. So we pay extra on our electricity rates and then get taxed on that overage, making it even more insulting. It is a tax on a tax.
Whenever Progress Energy proposes a rate hike for residential customers, they have to get that hike approved through the state utilities regulation authorities. When they decide to hike rates on wholesale customers, such as the Town of Selma and every other Electricities member municipality, I am told that no such approval is necessary. I got that straight from a former Selma Town Manager. That means that we are subject to much more capricious energy prices than retail customers are.
I have long questioned the value of owning our own public utility. When I lived in Smithfield prior to buying my house in Selma, I was outside of their town's municipal grid and fortunately could pay lower electricity rates. Since I now live smack in the middle of Selma, I am captive to higher rates.
I firmly believe that we as a town should investigate the savings we could have by eliminating personnel costs, operations, vehicles, facilities, and the like by not owning our own public utility. I am willing to wager that we could operate the town for a year on the proceeds of a sale of the town's power grid to Progress Energy. I am all for it and my tax bill will go down $100 a month. Of course that $100 differential is not deductible on my income tax return as local taxation, but it should be.
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