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Rocky Mount utilities propose rate options after staff projects $42.5M multi‑year under‑recovery
Summary
City utility staff presented three rate scenarios to close a planned multi‑year under‑recovery; residential customers would see modest average monthly increases while large industrial accounts would face substantial average annual changes under the higher recovery options.
Chris Bessler, director of energy resources, and consultant Kyle Blake presented a summary of the utilities’ projected revenue shortfall and three rate options at the Rocky Mount Committee of the Whole budget workshop.
Bessler said the utilities model shows an estimated $42.5 million under‑recovery across enterprise operations over a four‑year span if no rate changes are implemented. "We're over a 4 year span, we're gonna be 42 and a half million dollars under recovered if we don't do some sort of rate increase," Bessler said on the record.
Blake and staff laid out three options that split recovery amounts across customer classes. Staff emphasized the distributional tradeoffs: lower increases for residential customers require larger increases for commercial, large‑general‑service and industrial accounts. Blake summarized example impacts: under Option 1 the average residential customer would see about an $85 annual increase (roughly $7 per month); Option 2 would reduce that residential average but shift larger increases onto large commercial and industrial accounts — in Blake’s example, the average industrial customer’s annual bill increase could grow from about $32,000 to $47,000 between options (roughly a $1,250 monthly delta for an average industrial account).
Staff noted enterprise challenges beyond annual rates: wholesale supplier true‑ups and a rate‑stabilization drawdown. Daniels and staff said Rocky Mount’s utility rate‑stabilization reserve had been used to smooth earlier wholesale true‑ups; staff estimated roughly $15 million in stabilization funds before recent true‑ups and that forthcoming true‑ups could further reduce that cushion. Daniels said staff expects another large true‑up in September with the city’s share in the low‑to‑mid single‑millions; finance staff cautioned that lingering true‑ups mean the stabilization fund could be largely depleted over the next two years unless rates are adjusted.
Contracts and service agreements: council asked whether certain large customers have fixed‑price contracts or incentive arrangements. Blake and Bessler said customers pay under rate classes identified in electric‑service agreements; some economic‑development agreements include separate performance incentives but generally do not fix the underlying rate class billing formula.
Timing and guidance: utility staff said they need council guidance on which recovery option to include in the final proposed budget so the city can publish numbers for the public hearing. Daniels reiterated the timeline: the council has another scheduled workshop ahead of public hearings, and staff must incorporate chosen utility guidance into the final budget and notices.
Ending: Councilmembers asked for additional detail on per‑class counts and the composition of the largest accounts; staff provided a breakdown during the presentation (25,271 residential customers, 3,304 small general service, 601 medium general service, 16 large general service, 10 industrial) and said they would include the enterprise impact in the next draft of the budget for the public hearing.
