Electricity in Kinston costs about 22 percent more than in, say, Pink Hill.
“And that’s just a terrible thing,” said state Rep. Leo Daughtry of Smithfield, whose city, like Kinston, is part of the decades-old North Carolina Eastern Municipal Power Area No. 1 — a group of 32 municipalities named ElectriCities.
The rate difference can be blamed directly on the power crises of the 1970s, including the disaster at Three-Mile Island. ElectriCities owns part of four power plants, including the Sharon Harris nuclear plant west of Raleigh. Construction on that plant, originally intended for four reactors, was halted after only one was built — at twice the expected price.
ElectriCities has been in massive debt ever since. Combined, cities which are part of the organization still owe $1.9 billion on the plant. In Kinston, debt payment accounts for 39 percent of all electric bills.
The math is easy. A solution is not.
Daughtry and three other Republicans have introduced House Bill 708 as an attempt to lower rates in ElectriCities. It received first reading on April 11 in the House and was sent for discussion to the Committee on Finance.
Essentially, the bill would force ElectriCities to use all revenue from the sale of electricity to pay down the debt on the reactor. But Kinston’s city manager says doing that would result in a property tax increase 6 cents per $100 property tax values from 66 cents to 72 cents.
Today, the town transfers $800,000 in electric revenue to the general fund to help pay for services, such as police and fire protection, City Manager Tony Sears said. If that money is sent instead to pay the debt on a power plant that’s almost paid off anyway, he said, Kinston taxpayers “won’t get the best return on their investment.”
Instead, he said, they’ll get a property tax increase, assuming they want city service levels to remain the same. Otherwise, cuts are inevitable.
Without the bill, the debt on the Sharon Harris plant will be paid by 2027. With the bill, it would be paid off a few years early, Sears and Daughtry agree.
“In 12 years, I’m going to lower the (electricity) rate” when the debt expires, Sears said, and it’ll be lower than Duke Energy’s projected rates. “What am I going to do to the property tax rates if the bill passes? Once they go up, they stay up.”
Tough, Daughtry said.
“I don’t dispute that. But the power bill was never intended to supplement the general fund,” he said. “When your (bills are 22) percent higher than your neighbor, that’s a lot. And when you’re poor, that’s a whole lot.”
Daughtry said Kinston residents are finally facing the results of bad decisions made by the legislature years ago, including funding the nuclear power plant.
“We’ve tried everything we know to try to resolve these issues and we’ve got to solve them,” he said.
Sears, however, doesn’t expect the bill to pass. It can’t, he said, without sending property taxes in at least 32 Eastern North Carolina cities sky-rocketing.
“Government costs ‘X,’ ” Sears said. “What we’re really talking about is … you have to find that X.”