ECU officials tackle business’ concerns

By Jason Evans
Staff Reporter

EASLEY — Last month, several downtown business owners spoke before Easley Combined Utilities Commissioners, sharing their concerns that rising rates and other issues were making the cost of doing business too difficult.

At the end of that meeting, ECU Commission chairman Nick Caldwell said the utility had some educating to do with the public regarding its rates and other issues.

To that end, ECU general manager Joel Ledbetter and his staff prepared a presentation that was delivered during a public forum held Friday at ECU’s office.

The presentation included an explanation of ECU’s resources, its costs and rates and ways it gives back to the community.

“Our intent today is to be as transparent as we can in terms of what make up our costs,” ECU Commissioner Jeff Fogle said.

Through the Piedmont Municipal Power Agency, ECU has an ownership share of the Catawba Nuclear Station Unit 2. ECU is obligated to the PMPA through 2035.

ECU gets the majority of its power generation from the Catawba plant.

“That’s our primary source of power,” Ledbetter said. “When we entered into our contract and decision to buy Catawba, we said ‘We are going to invest for 40 years to build and buy this nuclear plant.’”

Because of its investment into the Catawba plant, much of ECU’s costs are fixed.

“We made investments 30 years ago and we’re obligated,” Ledbetter said. “We have a large fixed cost because we’re paying for that nuclear plant. We can’t do anything until 2035. There’s nothing I can do in the short term.”

Once that contract is up, ECU will have paid for and will own a valuable carbon-free generating resource, Ledbetter said.

Development helps the utility grow, he said.

“Growth helps, because it lowers that average,” Ledbetter said. “Our marginal cost is cheap. If you get cheap marginal costs, the more you get, it lowers the cost for everyone.”

Increasing its customer base is also important, as ECU’s service area is defined by geography.

“We can’t go and gobble up territorial tracts,” Ledbetter said. “We do it by the city expanding. It’s important for the city limits to grow.”

Although the PMPA contracts with Duke Energy to operate the Catawba plant, ECU does not buy power from Duke Energy.

ECU has some energy-generating capabilities of its own.

“That saves us money right there,” Ledbetter said.

Outsourcing many services has helped ECU lower costs, as has investing in technology with new metering systems.

Ledbetter said both the PMPA and ECU are constantly looking at ways to refinance the debt to lower costs.

Data from the Energy Information Administration for 2015 show that Easley Combined Utilities costs are lower than those of over utilities such as Blue Ridge Electric Cooperative, Ledbetter said.

Residents of the city of Easley are not being charged more than residents of Pickens County, he said.

While ECU’s residential and commercial rates are higher than Duke Energy’s, Ledbetter said ECU’s rates are lower than the statewide average when compared to other investor-owned utilities, municipally-owned utilities and electric cooperatives.

The investment in the Catawba plant means ECU has secure, stable access to power generation.

“We’re not going to see the increases that Duke and others may face,” Ledbetter said.

He said although no electric utility in the state operates in a competitive marketplace, if ECU had to do so, it would not only survive but thrive.

“I know this organization is lean enough and efficient enough that we can survive,” Ledbetter said.

If ECU was a private “for profit” utility, the rates of its customers would likely be higher, he said.

Vicki Ciplickas, owner of the Starving Artist Cafe, said the issue is about developing the downtown area.

“What we’re trying, what the city is trying to do, is fill empty and vacant buildings right now,” she said. “One of the questions that keeps being asked is is the infrastructure there to do so without it costing a small business person an amazing amount of money? And the answer in a lot of cases, I think, is going to be no.”

She said business owners in Easley are competing with other cities and towns who levy less taxes.

“What we’re trying to do is understand how we are going to fill these stores, so you get more business and in a cost-effective way, stay in business,” Ciplickas said. “At the end of the day, if there’s no businesses, that trickles down to your growth.”

Mayor Larry Bagwell said the city has invested more than $3 million in the downtown area.

“We’re doing everything in our power to try to save it,” he said. “I see where you’re coming from.”

Business owner David Cox suggested that an impartial private sector committee be formed that could award grants to struggling businesses in the downtown area.

“We need restaurants downtown,” Cox said. “They’re one of the best drawing cards we have for funding and seeing the downtown stay alive.”

Such a committee could help businesses cover costs to stay afloat “at least until business downtown gets up enough so where they can support themselves,” he said.

“I think at some point downtown Easley is going to have a return on investment,” Cox said. “Seeing any business have to close down because they can’t make a profit doesn’t help anybody.”

Commissioners agreed infrastructure problems are compounded by the fact that many of the buildings downtown now house businesses far different from the original tenants. Ciplickas’ restaurant is in a building that was a warehouse and a car dealership in years past.

“Some of those buildings haven’t had updates for 30 years,” Cox said.

At last month’s meeting, security deposits were brought up. Speakers said other utilities refund security deposits after a certain amount of time.

Ledbetter said ECU officials believed their security deposit charges were fair.

“If the customer think we’re charging too much, we’ll make an adjustment once actually billing comes in and we know what we’re dealing with,” he said.

Staff is currently researching the security deposit policies of other utility providers and will bring that information to the ECU commission.

To control power demand, business owners can spread out their usage, Ledbetter said.

“Not use it all at one time,” he said.

More efficient appliances can also help lower bills.

A company called Total Comfort Solutions is willing to provide energy audits for businesses.

“They’ll be more than happy to walk through and say ‘Here’s what I recommend,’” Ledbetter said.

ECU gets nothing in return for putting the two parties together, Ledbetter said.

“We just make the introduction,” he said.

To give one customer a discount on rates, he’d have to charge another customer more, Ledbetter said.

“How do you pick?” he asked.

“To give somebody a break downtown means that we’ve got to up it for somebody else,” Fogle said.

ECU donates to SHARE, United Way, United Christian Ministries and Samaritan Health Clinic to help customers who struggle to pay their power bills.

“We don’t like to get in social services’ business,” Ledbetter said. “We direct those (customers) to those guys.”

He said ECU did not expect increases from the PMPA for power generation.

“We didn’t have a rate increase last year,” Ledbetter said. “We don’t have one in May and we don’t think we’re going to have one in 2018. To us, that is great news.”

If PMPA raises ECU’s rates, “we have to get some of it back,” he said.

That said, ECU never passes the full increase from PMPA onto its customers.

“If the PMPA implements a 5 percent (increase), we’ve never implemented a 5 percent (increase),” Ledbetter said. “We only implement what it takes for us to get back our increased cost.”

Ledbetter said the future looks bright for both the utility and its customers. He said rate increases, if they occur, should be small, at or below the rate of inflation.

“From here forward, they look very good,” Ledbetter said. “We have climbed to the top of the mountain.”

The utility will work on giving customers more notice when increases are expected, according to Ledbetter.

Future wholesale electric costs are expected to remain stable, and future retail electric rates are expected to remain below the state average, according to forecasts from ECU.