Rocky Mount discusses electric rate increase options to address $42M under recovery

Rocky Mount officials are proposing a significant electric rate increase to address a staggering $42.5 million under-recovery in utility expenses, primarily affecting residential customers. During a recent Special Called Committee meeting, city leaders outlined the urgent need for the increase, citing that only two customer classes are currently covering their costs.

The primary drivers for this proposed rate hike include a lack of retail microgrid increases since February 2017, substantial true-up costs from Duke Energy, and administrative service charges that have exceeded initial estimates. The residential class alone is projected to be under-recovering by $47 million over the next four years, prompting the city to explore three potential rate increase options.

The first option suggests a 5.7% increase for residential customers, which would still leave a $24 million gap in recovery. The second option proposes a 4% increase for residential customers, aiming to reduce the under-recovery to $30 million. The final option would start with a 3.5% increase, further alleviating the burden on residential customers while still addressing the overall financial shortfall.

City officials emphasized the importance of balancing the need for revenue with the potential impact on residents, aiming to avoid a "massive rate shock." The discussions highlighted the necessity for a strategic approach to ensure the electric utility remains financially viable while supporting the community's needs. As the city moves forward, the proposed rate increases will be a critical topic for residents and stakeholders alike.