Power agency plan may help with users’ electric bills
from the Sun Journal-New Bern
The power agency that supplies electricity to New Bern has passed the first milestone to lower its debt payments, a move that may help hold consumer electricity rates steady until 2013.
The N.C. Local Government Commission on Aug. 3 approved a refinancing plan for more than $191 million of N.C. Eastern Municipal Power Agency’s $2.4 billion debt. The agency expects to save more than $1 million each year.
New Bern is one of 32 member cities that own a portion of the four power plants under the agency’s umbrella. The city’s share of the debt is $156 million, which will be paid off by 2026.
“Basically, as part of their strategy, the power agency is refinancing whatever bonds they have coming due,” said Jon Rynne, the city’s director of public utilities. “Obviously, they want to get a better interest rate.”
Power agency and ElectriCities officials expect the process to move forward, with a meeting today and Wednesday with the three rating agencies, said ElectriCities Chief Financial Officer Tim Tunis. ElectriCities is an entity that acts as an administrator between the power agency and the member cities.
“They have to assign a new rating to our bond issue,” Tunis said.
Tunis expects that the agency will sell the bonds in the marketplace on Sept. 8, with the deal reaching the closing stage on Sept. 21.
“It’s a positive thing,” Rynne said. “It’s a way of mitigating expenses coming up by decreasing your current expenses.”
Based on fuel cost projections, the agency expects to keep its wholesale power rate steady until 2013, Rynne said. The wholesale rate drives the rates New Bern must charge its customers. Based on these and other factors, the city has no customer rate increases on the horizon, he said.
“The agency at the board level is looking at every opportunity to control costs and manage costs into the future,” said Ken Raber, senior vice president for the power agency and ElectriCitie