Electric Energy/Fuel Adjustment Effective 1/1/06

Greenville Utilities, along with 31 other cities in the eastern part of the state, purchases electric power from the North Carolina Eastern Municipal Power Agency (NCEMPA or the “Power Agency”).  Due to the rising cost of fuels (particularly natural gas) used to generate electricity, the Power Agency is increasing wholesale costs. As a result, GUC will pay 10.2% more per kWh for its electric supply.

To recover these increased costs and maintain the financial integrity of GUC, this fuel adjustment charge will be passed on to customers (for kWh only), effective January 1, 2006. The impact on our major rate groups will differ, but overall, the retail increase will be approximately 8.2% for retail customers. Currently, GUC’s residential electric customers (with load management) pay $103.29 for 1,000 kWh of electricity during the billing months of April through November. With the increase, these same customers would pay $110.69 for 1,000 kWh. The increase would mean an additional $7.40/month.

For the billing months of December through March, residential customers currently pay $92.72 for 1,000 kWh of electricity. With the increase, the same customers would pay $100.12 for 1,000 kWh. The increase would mean an additional $7.40/month from December through March.

Rising costs are not just a Pitt County issue. It’s not even just a nationwide issue. It’s a global issue. Fossil fuels costs are going up worldwide. All electric providers, including investor-owned utilities, electric cooperatives and municipal electric providers, will face higher energy costs as a result of the natural gas prices.

It’s important to know that when GUC is faced with wholesale increases, GUC first tries to absorb as much as it can. Over the past 13 years, our wholesale costs have gone up more than 24%. We have absorbed the majority of these increases, saving our customers more than $50 million in potential cost increases. During March – May 2005 alone, we absorbed $800,000 in increases. We have offset the increases through cost-saving measures such as Beat-the-Peak, industrial generation, use of a rate stabilization fund, and other cost-containment measures. We simply cannot absorb this most recent increase.

How do fuel adjustment charges or other increases impact GUC’s revenues?  Do we make huge “profits” as the cost of electricity goes up?  In a word, no.  Our supplier charges us a certain amount for the electricity we purchase. If their prices go up, we have to pay more. We change our retail pricing only enough to recover the increased costs. We have to pay more for what we purchase for our customers to use, and we are just passing those increase costs on to our customers.

We encourage customers to actively pursue ways to lower their electric/water usage and costs. See our EnergyWise section for details.