Raleigh, NC. Legislators and consumer advocates are applauding the Utilities Commission’s decision to suspend PSNC’s rate schedule that charges residents more, who use less in the summer. Effective June 1st, all residents will be charged the lower, “value” rate. The decision marks the end of a controversy, spanning seven months.
“It is a victory for consumers, smart energy policies, and conservation,” says Representative Pricey Harrison, one of the nineteen legislators who opposed the use-less, pay-more rate structures in an open letter to Public Staff. Representative Harrison who is sponsoring a renewable energy and efficiency bill in the House added, “North Carolina wants and needs smarter energy policies.”
Shana Becker, Advocate at the North Carolina Public Interest Research Group (NCPIRG), agrees. “People were in the awkward position of having to calculate the benefit of wasting natural gas in the summer to get lower rates in the winter.” NCPIRG, a non-profit, non-partisan consumer advocacy group, organized legislative sponsorship for the open letter to Public Staff, and residential opposition to the rate structure. “Whether people are being thrifty or environmentally conscientious, they will save money if they use less, thanks to the Commission,” says Becker.
Beginning in November 2006, PSNC imposed a 9.78% surcharge per therm of natural gas on residents who failed to use 24 therms the previous summer. They paid $1.30 per therm of natural gas, compared to “value rate” customers who paid $1.18. Residents who used less in the summer paid more. Public Staff, the consumer advocacy arm of the Commission, had stipulated to the rate structure.
In response to public pressure, PSNC asked the Commission to reconsider the rate structure. It requested permission to afford all residents the same value rate, and to accrue interest on lost profits for up to three years during which time it would consider alternative rate structures. Public Staff gave its consent to PSNC’s proposal.
On Wednesday, the Commission granted PSNC’s proposal to place all residents on the value rate, but it rejected the rest of the petition. The Commission ordered PSNC to propose a new rate structure by July 6, and to have gained approval for it by November 1. The Commission indicated that it may permit PSNC to recover a return and the profits lost during the six months, but it made no guarantee.
Becker says, “Residents are lucky that the Commission did not accept Public Staff’s recommendation. If they had, residents could have been saddled with a $24 million dollar bill at the end of three years.” She says, “Residents need Public Staff to advocate zealously on their behalf. When Public Staff fails, residents lose, and that is what happened with these bad rate structures.”
