Craig Norfolk, who oversees local operations for ElectriCities of North Carolina, says it was a "human error" that the systems' summer rates were not applied to residential and commercial power bills from June through September 2011. This resulted in under-billing of $464,000 in Huntersville and $222,000 in Cornelius.
Norfolk reported the error to town officials in December and has been meeting with larger commercial customers to inform them of the solution. A mailing to residential customers will go out this week, he says. The error applies only to customers of the two towns' electric systems. Customers of Duke Energy and Energy United are not affected.
"Our summer rates are higher than our winter rates because power generation costs are higher during summer peak period," says Norfolk. "So last summer for June through September we did not go into our computer system and enter the summer rate as we should have, so the winter rates continued to bill.
"It was a human error," he adds.
To recoup the lost revenue, electric bills will be recalculated for each of the affected months using the correct rate schedule. The under-billed amount will be added to customers' power bills in February, March, April and May, the adjustment varying depending on rate classification (residential or commercial), and actual electric usage during the June-September period. Billing adjustments will be in the range of $10 to $25 per month during the upcoming four months for most residential customers, the variation depending on how much electricity they used last summer. Some customers may see larger increases with increased kilowatt-hour usage.
ElectriCities adjusts the rates seasonally because of the fluctuations in wholesale power costs. Through ElectriCities, the two towns purchase power from a number of sources, including Catawba Nuclear Station, where they hold partial ownership of a nuclear reactor with 17 other municipalities across the state. Together, they form the North Carolina Municipal Power Agency Number 1 (NCMPA1), which encompasses the Piedmont and western sections of North Carolina. The agency was formed decades ago as a means to provide electric service to lesser-populated areas where power companies were reluctant to invest in infrastructure.
Government-owned utilities operate as non-profit enterprise funds, which mean they are included in towns' annual budgets, but are not supported by their general fund. Enterprise funds are self-supporting and, by law, cannot "discriminate" with their billing, according to Norfolk. That means ElectriCities is required to collect the under-billed amounts from customers.
For the most part, Norfolk says, meetings with commercial customers have gone well, and they have been generally receptive of the revenue recapture plan. Larger commercial users, though, include Randy Marion and Sree Hotels. Auto dealer Marion and Vinay Patel of Sree Hotels were at odds throughout last year with Huntersville and Cornelius officials, as well as those in Davidson, over Visit Lake Norman funding.
Got questions?
ElectriCities customer service representatives are available at 704 948-0550 to assist customers in understanding the issue and discussing available payment options.
