Electric rates to stay same
The winter of 2013-14 will have an adverse effect on the cost of providing electricity to the Town of Forest City and the State of North Carolina.
Exactly what the effects will be will not be known for months, but during a brief meeting with town council Monday night, Kevin O’Donnell with Nova Energy Consultants, updated the board on upcoming changes with the Electric Gross Receipts Tax and Sales Tax which will effective be on July 1.
He recommended that the town not change its rates at this time.
“It was a really rough winter,” O’Donnell said.
The eastern part of the United States experienced a severe natural gas pipeline capacity shortage and the daily basis (Capacity) shot through the roof, O’Donnell explained.
“We have enough natural gas, we do not have enough infrastructure,” he said in a power point presentation.
Until infrastructure is built, “we will continue to see high basis costs,” O’Donnell said.
“I have never seen anything like this ... get ready it’s coming,” he said of the rising costs.
Sales tax on electricity is 3 percent but due to tax changes approved by the North Carolina Legislature, the new sales tax on electricity will be 7 percent, effective July 1.
The town will not be able to retain the sales tax collected from customers, but all sales tax will be remitted to the State, which will be a loss of revenue.
“Keep the rates as they are right now,” O’Donnell said. “And hunker down and get ready to deal with it.”