DOBSON – Surry County electrical customers don’t usually have a choice about their service provider – but the spirit of competition isn’t necessarily a good thing either, based on an unusual situation regarding a planned prison in Dobson.
Given the decision to place an order to power the new detention center with Duke Energy or Surry-Yadkin Electric Membership Corp. To forgive, the Surry Board of Commissioners opted for the latter, but in a separate decision.
This result reflects the concern of some commissioners that while the electrical cooperative will offer lower costs in the short term due to what one dissident calls “teaser rates”, the county taxpayers could face much higher long-term costs if they do not choose Duke .
“I’m not interested in teaser rates,” said Commissioner Eddie Harris of a special economic development fee that Surry-Yadkin had offered for seven years. He called it “intangible” and added that he was more focused on the decades to come.
“Eternity is a long time – that is forever.”
“Both are great companies, that’s not the point,” said Commissioner Van Tucker, who voted against the use of Surry-Yadkin during a meeting in Harris’ absence and was overruled by fellow Commissioners Bill Goins, Larry Johnson and Mark Marion.
At a later meeting, Tucker sided with Harris when he lost a motion attempting to reverse the action that resulted in a 3-2 vote.
“I think it’s about the best deal for the taxpayer,” added Tucker on Wednesday afternoon.
Based on the numbers compiled by Harris, he estimates that the average cost of using the Surry-Yadkin service would be $ 103,170 per year after seven years, compared to $ 93,579 for Duke Energy.
Marion, the chairman of the board, does not endorse this scenario and says he chooses to make guaranteed savings in the short term rather than gamble on possible lower interest rates from Duke later.
“It was child’s play for me, because nobody can predict the future,” said Marion on Wednesday afternoon.
“We’ll save $ 8,000 in the first year,” he said of the agreement asking Surry-Yadkin to reassess the interest rate situation after it ends.
Marion pointed out that market conditions make it difficult to predict the energy price outlook seven years from now, with what Duke might calculate then is an uncertainty today.
“Nobody knows,” said the CEO. “As the performance rate increases (in general), so will Duke.”
“No mans land”
The unusual situation that enables such a debate concerns the location of the new prison on land adjacent to the existing prison near the center of Dobson.
“It’s right behind it,” Harris said earlier this week.
Although each electricity supplier has a different presence in different areas of the county, the new prison location is said to be in a “no man’s land,” meaning that the county officials had a choice between the two.
In March, commissioners approved the issuance of up to $ 50 million limited liability notes in fiscal 2021-22 to build the prison and fund another project for Elkin City Schools. The detention facility makes up the largest part of it.
“It’s a $ 40 million project,” said Harris.
Almost everything else in town is powered by Duke Energy, according to the State Road Community commissioner, who acknowledged the cooperative powers some facilities like the Surry County Health and Nutrition Center near US 601.
Duke Energy already has infrastructure in place at the new prison location, including a substation “right there in the judicial center” nearby, which Harris says indicates another factor in Duke’s favor: reliability.
“It couldn’t be more reliable,” said Harris in particular about the proximity of the substation.
In the meantime, the nearest substation of the Surry-Yadkin Electric Membership Corp is located. in Salem Fork, about four miles as the crow flies.
The cooperative initially offered its discount rate for a five-year period, but apparently got wind that at least some of its board of directors were gravitating towards Duke Energy, Harris said. Surry-Yadkin then extended those two years and also said it would sell a generator to the county government at cost.
Harris says he has thoroughly researched the problem and navigated a maze of websites listing kilowatt hour charges and other complexities, and it is obvious that Duke Energy will be a “much cheaper” option after seven years. “I spent a fair amount of time on it.”
Duke cannot offer teaser pricing because the laws that govern it, which are different from those of the cooperative, require it to treat all customers equally, Harris said.
“By everyone’s analysis, Surry-Yadkin Electric Membership Corp. is more expensive to power and will cost taxpayers tens, if not hundreds, of dollars in the long run,” he said. “What you really need to do is compare apples to apples.”
Process in question
In addition to the financial implications of the electrical contract, Harris and Tucker have issues with the decision.
During a meeting of the commissioners on April 5, the district authority voted 3: 1 to award the electrical contract to the cooperative. This decision highlighted the fact that one of the five members was absent.
“I buried my mother that day,” announced Harris.
Another point of contention concerns the board of directors, who discuss the matter beforehand in a closed meeting, which is usually reserved, among other things, for highly sensitive questions regarding personnel or economic incentives for a new industry.
District Attorney Ed Woltz defended this discussion in a letter later in the month based on a provision of the North Carolina Open Gathering Act regarding bid information submitted by electric utilities. The attorney’s position is that this did not become public until the contract was awarded.
The law says that an elected body can hold a closed session on even the most delicate matters, not that it has to.
“I think it was big enough for taxpayers that we should have had an open discussion,” said Commissioner Tucker on Wednesday. “I think it’s about the best deal for the taxpayer.”
At another meeting on April 19, Harris spoke out at length against the measures taken earlier this month because they were not present at the time.
On April 19, there was also an attempt to cancel the contract with Surry-Yadkin, reflecting Harris and Tucker’s desire to conduct further studies. It failed in a 3-2 vote.
Following this action, it became known that Commissioner Marion’s father had a long relationship with Surry-Yadkin Electric Membership Corp. based in Dobson.
“I’m just going to say that Surry-Yadkin has always been a good company for the community,” Marion replied on Wednesday when asked about the relationship.
“My father, who worked there for 43 years, had no influence on how I voted.”
Not a closed deal?
Although two votes were cast on the matter, it may still not be set in stone, according to Tucker.
“It’s a deal if you vote and sign a contract.”
Tucker said it hadn’t happened since earlier this week.
“I don’t think it’s too late,” he said, saying that it is okay to change the current course of action, which Commissioner Harris agrees with.
“At first glance, it is simply wrong,” he said of the decision for the electrical service.
“That was wrong for many reasons.”