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Rocky Mount reviews NEMPA rate options as July debt release approaches
Summary
City staff briefed the council on two options from the North Carolina Eastern Municipal Power Agency to handle consecutive large "true ups" and an upcoming July 2025 debt-release that would return about $2.3 million to Rocky Mount; the council discussed weighing short‑term customer impacts against replenishing the city's rate‑stabilization fund.
Interim City Manager Peter Varney and Chris Boeschler, the city’s director of energy resources, briefed the Rocky Mount City Council on proposed options from the North Carolina Eastern Municipal Power Agency (NEMPA) for addressing large recent true‑up charges and an upcoming debt release scheduled for July 2025.
The presentation said NEMPA members have seen unusually large true‑ups in recent years — about $53 million in 2022 and $40 million in 2023 — and estimated a $30 million to $40 million true‑up for 2024. Rocky Mount’s share of those larger adjustments was described in the briefing as roughly $5 million for the 2022 true‑up and about $4 million for a $40 million true‑up scenario. The briefing identified a separate debt reserve established in February 2015; the reserve’s release in July 2025 would return roughly $2.3 million to Rocky Mount if NEMPA members receive the funds back.
Why it matters: Rocky Mount staff said the city has used its rate‑stabilization fund to absorb prior true‑ups without raising customer rates. The two NEMPA options presented would achieve the same end point in the long run but differ in timing and near‑term customer impacts.
Option 1 (up‑front): NEMPA would collect more money up front, returning the July 2025 debt release to members; Rocky Mount staff said they would transfer that $2.3 million into the city’s rate‑stabilization fund to cover prior and potential future true‑ups and avoid immediate rate increases for customers.
Option 3 (phased/level): NEMPA would keep a flatter revenue path and use its July debt release to rebuild NEMPA working capital. That approach would spread costs over a longer period and result in smaller short‑term increases for customers in some member cities; several municipalities with less rate‑stabilization funding reportedly favor this option.
Chris Boeschler said the briefing was informational: “this is just for informational purposes only.” He explained the technical background: Duke Energy provides expense forecasts that NEMPA uses to set rates and then reconciles estimates against actual costs each September; differences are passed to members as true‑ups or rebates. Boeschler and staff walked the council through historical true‑ups, NEMPA working‑capital levels, and modeled outcomes under each option.
Council reaction and next steps: Councilman Daughtridge reminded colleagues that the upcoming NEMPA board vote will be a weighted vote across 32 members and noted Rocky Mount is the third‑largest member. “This vote coming up at the next meeting will be a weighted vote of the 32 members and each member has a percentage of the weighted vote. Rocky Mount is the third largest in NEMPA,” he said. Council members also noted that Greenville and Wilson — the two largest weighted members — voted for option 3 in the rate committee, increasing the likelihood that option’s passage at the board level.
Varney and Boeschler said the city manager’s office will convene a committee‑of‑the‑whole meeting to discuss a recommended position and to pair the NEMPA decision with the ongoing city cost‑of‑service study for Rocky Mount utilities. Boeschler said the NEMPA board was expected to vote in April and emphasized that the two options reach similar long‑term outcomes but create different short‑term consequences for customers and for Rocky Mount’s rate‑stabilization balance.
Documents and figures cited in the briefing included: the 2022 $53,000,000 true‑up, the 2023 $40,000,000 true‑up, and a 2024 estimate of $30–$40 million (the presentation used $40 million for a worst‑case example); Rocky Mount’s described share of a $40 million true‑up was roughly $4,000,000. The briefing also referenced the February 2015 debt reserve of $18,000,000 and Rocky Mount’s share of that reserve ($2,300,000) that would be released in July 2025 if NEMPA members choose to return the funds.
No formal direction was taken at the meeting; staff recommended a follow‑up committee‑of‑the‑whole session to develop a council position before the NEMPA board vote.
