Have you noticed that your power bills keep going up in Kings Mountain? Keep seeing that “Fuel Surcharge Rider” on your bill and wondering what it is?
Would it surprise you to find out that negligence and mismanagement on the part of the City Council and former City Administration played a role?
Well, here’s the story…
In 2015, the Kings Mountain City Council agreed to buy all of the electricity needed for residents and businesses from a company called NTE. At the time, NTE was a new company with no track record. The City saw an opportunity to sell a lot of water to NTE, and without asking very many questions, they made the decision to trade our future power bills for a water customer – and we’re not sure what else.
NTE is also unregulated, meaning they can charge whatever they want. When a regulated utility provider like Duke Energy wants to increase rates, they have to seek approval through the North Carolina Utilities Commission. There is a process in place to protect consumers, to keep power bills affordable, and to keep utility providers accountable. The agreement with NTE, however, was structured to allow for unlimited fluctuations in pricing and the ability to pass on those price increases to consumers without regulators’ approval.
In making this agreement, the City Council and former City Administration effectively told Duke Energy – a regulated utility with a track record – to get lost. We didn’t want to do business with them anymore. Duke Energy creates electricity from a variety of sources: nuclear, gas, wind, hydro, solar, etc. This diversity allows Duke Energy to provide a stable energy environment, without a ton of price swings. NTE, on the other hand, only produces power from natural gas – while sometimes cheap, it is the most economically unstable of all energy sources when it comes to price.
See the problem? We left behind a stable provider who must receive regulator’s approval for price increases for an unstable provider who can raise prices at any time. And they sold this to us, repeatedly, as a great thing!
Well, soon after we started our twenty year contract with NTE, natural gas prices started to rise. A lot. And steadily.
To cover themselves and the impact of their decisions, the former City Manager and Assistant City Manager tried to hide the price increases – by not passing them on to customers. Instead, they covered the increased costs by draining the cash reserves of the City’s Electric Fund for years. Taxpayer dollars that were supposed to go to equipment, repairs and other operational costs were now being robbed to pay for volatile increases in energy costs.
Meanwhile, the City Council asked zero questions – or at least didn’t ask the right questions. They continued robbing other funds to pay for band concerts, light shows, fireworks, and all kinds of other things. The balance of our Electric Fund kept dropping. The long-term Council members swallowed what staff told them and continued their financial negligence and mismanagement.
Just as the situation was getting a little too out of control, the former City Manager and Assistant City Manager retired. And natural gas prices continued to climb. With a depleted Electric Fund, the Fuel Surcharge Rider climbed as well – which effectively doubled many residents’ power bills last winter – and left the new City Manager, Jim Palenick, with a mess to clean up. On their way out of the door, the City Council slapped the former City Manager and Assistant Manager on the backs and applauded them for their dedication to our community.
Our City Council is responsible for managing the City Manager and the Assistant City Manager. The debacle with NTE is a highly-visible (and costly!) example of their failure to do this for more than a decade. Our long-term Council members spend plenty of time applauding themselves and the former Administration while ignoring the job they are elected to do. Negligence. Mismanagement. It’s a common refrain.
Last winter (and again this summer), your power bills shot up because of circumstances created by our City Council in their mismanagement of our utilities and city staff and their negligence for the impact of their decisions. They are fully responsible for all of the facts outlined above. And they need to be held accountable.
Two of them are up for re-election in November, and they’re already asking for your vote. Keith Miller and Jay Rhodes are partially to blame for sticking their heads in the sand and for their inability or refusal to oversee the management of our city. They have been more interested in getting re-elected for the umpteenth time and riding in parades than they have been in reading financial statements and managing the affairs of our community.
They told Duke Power to go away. That they are smarter than them. And that we, as a City, don’t need them. Now, taxpayers are paying the price. And if they aren’t held accountable, we will continue paying for their mismanagement, ignorance and negligence – just as we are with the largest tax hike in City history that was recently passed.