Last month I wrote extensively about my annual presentation to the membership at our annual meeting in May. The content of that presentation and the most recent message in the July magazine discussed both our recent capital investments in our infrastructure and our mandated share of costs associated with Duke Energy’s project to close coal ash basins in North Carolina. I also forecasted that these cost pressures would lead first to a WPCA charge, and ultimately, an increase in our rates in early 2020. This will be Tideland’s first base rate increase since January 2013, and the first rate change since we reduced rates in July 2014.

The summertime WPCA charge is now upon us. Our billing cycles as of July 1 resulted in a WPCA factor of $3 per 1,000 kilowatt hours (kWh) consumed for all Tideland accounts. The last time we billed a WPCA charge was in February 2018.

For the month of August, we anticipate an increasing WPCA charge from $3 to $5 per 1,000 kWh. We’ll likely have to confront more increases in the fall as we wrap up our rate study and prepare for the 2020 implementation of new rate schedules. Once new rates are in place, we anticipate a reduced WPCA of $0.00 per 1,000 kWh.

The WPCA charge for the basin closure expense is higher in 2019 than we may have otherwise anticipated due in large part to lagging energy sales so far in the 2019 calendar year. Through June 30, 2019, Tideland’s electric sales declined 15 million kWh compared to the same period in 2018. That translates into a revenue decline of approximately $2 million. The drop in revenue is largely tied to a much milder winter than we typically experience in Tideland territory.

As with any project of such magnitude, there are many moving parts that impact scheduling and future costs.

We have also billed fewer accounts since Hurricane Florence due to on-going recovery efforts. Fortunately, the latter continues to improve with each passing month as homes are reoccupied.

How long will basin closure costs impact Tideland members? We are 18 months into what we are obligated to pay, based on successful closure activities to date on the part of Duke Energy. We anticipate the project could require 6 to 8 more years of Tideland expenses. Fortunately, the cost in later years should be significantly less than the work currently underway.

We must prudently emphasize that this is the largest coal ash basin closure in U.S. history. As with any project of such magnitude, there are many moving parts that impact scheduling and future costs. There are also multiple participants and stakeholders involved in the decision making processes that will ultimately determine the scope of remediation required.

We can confidently say, however, that we are increasingly moving away from coal as a generating resource to meet your electricity needs. Furthermore, all new coal ash landfills in North Carolina will now be fully lined and ultimately capped.

I will keep our membership updated as the forecast provided within this article changes through the Fall of 2019.