Higher Electric Costs: Residents Shocked By Bills

This article first appeared in The Pilot on Feb. 2, 2022.

Emily Jessup didn’t know what to expect when her mother-in-law called to tell her husband that the January power bills were in. She had noticed that the December bill had already been higher than usual — about $200 compared to the normal $170 to $180. But she never thought her January bill would go up by almost another $100.

“When I got that bill,” she said, “I wanted to cry.”

The Vass resident is pregnant with a second child. She works but is also putting herself through school, while raising her 2-year-old daughter with her husband. She lives in a small single-wide trailer and gets her electricity from Duke Energy.

With the electricity bills rising, Jessup said there’s little money left over at the end of the month. She said her husband jokes about having to take out a loan just to pay the power bill if it keeps skyrocketing.

“My biggest fear is what if it keeps going up and it can’t stop — what else can you cut?” Jessup said. “You can’t cut back on food. You can’t cut back on car payments. … It’s nerve-wracking, ‘cause you don’t know what’s going to happen next.”

Jessup is far from being the only one struggling to keep up with the high costs of powering their home this winter. Hundreds of Moore County residents have expressed difficulty paying their recent electric bills.

Lauren Boksa, who also lives in a single-wide trailer and gets her energy from Duke, said her January bill was $257.

“It’s just ridiculous,” Boksa said. “This is something basic that everybody needs to survive.”

In normal months, her bill is $80 to $90. Winter bills come out a bit higher. But even her December bill, at $189, was $20-30 more than she would normally expect.

She moved to her current home last December.

“My bill when I moved in was high,” she admitted. “But it wasn't anywhere close to what these bills are now.”

Lisa Lowe lives in a log cabin in the southeast corner of the county. She pays for a gas heater in her kitchen in addition to the electric heating Duke charges her for.

Like many others, Lowe noticed an increase in her December bill compared to other months, but she attributed it to the winter weather and additional Christmas lights.

When she saw her January bill — $376, or $120 more than the prior month — she suspected something else was going on.

“I was just floored,” she said.

When Lowe called Duke, she was told there had been a rate increase, but not given any more information. “My phone call led to nothing,” she said.

The Duke representative Lowe spoke to was right — there had been a rate increase — nine months ago.

Jeff Brooks, a spokesperson for Duke, said that a 4.7 percent increase was effective last June. That translates to a $6.30 increase for the average residential customer for a 1000 kilowatt hour (kwh) bill.

There was also an annual adjustment this year as a result of increased fuel costs in December, which added on another $3.10 per 1000 kwh. He described this increase as “nothing significant in the scope of what people are seeing in their winter bills right now.”

Together, that’s about a $10 increase from May, per 1000 kwh each Duke customer is paying. Brooks noted that some of the rate increases “were (initially) reduced by savings from the federal and state reforms.”

Rory McIlmoil, who works for the environmental organization Appalachian Voices and studies energy affordability, said that an Excess Deferred Income Tax (EDIT) for Duke customers, providing temporary relief, had expired at the end of last year. Its expiration will lead to a 0.7 percent rate increase by the end of this year. In 2025, two more EDITs will expire, leading to a 7.6 percent increase in net rates since last June.

Both Brooks and McIlmoil attributed electricity bill increases primarily to harsher winter weather this past January. Indeed, according to data shared by Randolph Electric Membership Corp., temperatures dropped below freezing 25 days out of the month. On the other hand, there were a few days where temperatures were higher than the recorded average — a metric that may also increase energy costs, Randolph Communications and Public Affairs Manager Nicole Arnold said.

Brooks says people tend to see their bills increase in high heating months of January, February and March and high cooling months of July and August. He says that energy usage will “get more normalized” this spring, during the “shoulder months” between the heating and cooling seasons.

“This is a seasonal thing,” he said of the high bills.

For consumers and advocates like McIlmoil, it seems like electric bills are only going in one direction.

“Moving forward, (affordability) is going to be a big problem,” he said.

McIlmoil is part of a “low-income affordability collaborative” that has been put in charge by the North Carolina Utilities Commission with examining solutions to affordability challenges posed by Duke’s electricity rate increases. The group is led by Duke and includes stakeholders from a variety of organizations.

After the last rate case, the North Carolina Utilities Commission ordered Duke to work with stakeholders to examine low-income affordability challenges and energy use.

McIlmoil says that the working group’s recommendations will likely be completed in July.

Al Ripley works on energy affordability for the North Carolina Justice Center. He agrees with McIlmoil that rates are only going to increase from here, at least for investor-owned utilities like Duke and Dominion. He said the driving reason behind this increase is House Bill 951, which was passed by the state legislature last October.

“I'm comfortable saying I'm concerned that we're going to see significant residential electricity rate increases in the coming years due to the impacts of House Bill 951,” Ripley said. “But there's no way to know when.”

HB951 requires Duke to come up with a carbon reduction plan by the end of this year. It also allows Duke to install multi-year rate increases over a period of three years. The plan allows for automatic rate increases in its second and third years, but caps rate increases to 8 percent over three years, McIlmoil said. He noted that such multi-year rate plans are inherently risky, because they allow utilities to “game the books” and roll in unnecessary additional costs.

The legislation has two provisions in place to prevent this from happening, including rewards and penalties for meeting goals like affordability or extra decarbonisation, McIlmoil said. However, he believes these aren’t strong enough to ward off potential rate increases on customers.

“So that's where again these affordability policies have to be implemented immediately to kind of offset the impact of what 951 is going to have for customers,” McIlmoil said.

The utilities commission approved the rules for multi-year rate increases for Duke and other investor-owned utilities on Feb. 10. These rules will allow Duke to submit their plans. However, the utilities commission is planning to wait until the affordability collaborative gives its recommendations and Duke produces a carbon reductions plan before reviewing any rate increase applications, Ripley said.

The utilities commission did not respond to several requests for comment on electricity rate increases.

There are a variety of resources that have been put in place during the pandemic to help those struggling with hefty power bills.

The first thing for consumers is to contact their service provider. This can allow them to coordinate a specialized repayment plan that will enable them to break their bills into installments based on their expected streams of income. High February bills, in this case, could be spread out over several months instead of having to be paid all at once.

For people who qualify under the federal poverty guidelines, there are federal programs that help with utility costs. But Ripley warns that these programs are often oversubscribed and underfunded. Furthermore, many people who cannot afford to pay their electricity bills do not qualify for them in the first place.