Comments by Warren Smith | Eastern North Carolina Now

Cost of Doing Business in Beaufort County is Electrifying
June 19, 2012 | 08:39 AM

With respect to discussions on the city council about utility rates versus customer usage: the electric rate is overwhelmingly important.

The point of generating electricity is to make the product affordable to consumers for a wide and growing number of uses. Lower rates encourage new commercial and residential users and greater economic development in the community being served. The single best indicator of economic well being in a modern community is strong and rising use of electricity.

Electricity rates are the "elephant in the room" concerning economic development in Beaufort County. Businesses are acutely aware of all manufacturing costs. They are already actively involved in restricting needless uses of electricity at their facilities. Plant managers, manufacturing process designers, selection of efficient machines and motors which are scaled to their best need all contribute to best use of only essential KWH useage. However, various manufacturing processes do have their own most efficient and particular basic KWH requirements and that cost is controlled only by the utility rate.

Our rates are an all prevailing hurdle to our local economy. New business is deterred from locating here. Old businesses are at a disadvantage to competitors being served by lower rate utilities. Residential customers need to direct dollars to utility bills which could go to home repairs. This results in a depreciating housing stock. The distortions to the local economy are all intrusive and pervasive. No amount of EDC scheming or industrial park nonsense can overcome the burden of utility rates. What new development does come to Beaufort County seeks out areas served by alternate power providers.

While it is a service to customers to educate users as to "smart use" strategies, it is not the government or the generating company's place to discourage usage. Discouragement of usage leads to two problems:

1) As utility usage falls the limited KWH hours generated and sold become less able to spread the fixed costs of plant and equipment across a broad sales revenue base. This causes the portion of fixed costs allocated per KWH to rise, this in turn requires moth balling plant and equipment or increasing rates.

..this is a death spiral for business and for customers.

2) The logical progression for reduced customer usage through recommended thermostat settings, etc., is for the regulators to move into mandated temperature settings and then onto rationing. Regulation by central authorities replaces business and personal decision making

..this is the death spiral of the business environment.

Commented: Tuesday, June 19th, 2012 @ 12:53 pm By: Warren Smith

It is ironic and a tragedy that this reduction in PCS's workforce comes within one week of the Washington City Council putting the final touches on the ridiculous funding of a Canadian venture capitalist's takeover and downsizing of Caron International.

Talk about spitting into the wind. $180,000 hole in the local budget and you are down another 150 jobs in less than seven days.

We have $6,500,000 in dead real estate, $1,500,000 in local taxes shipped off to Craven County, a River Road grant guarantee begging for jobs from Weir to apply to Carver's job shortfall, $198,000 in financing due on the Blue Goose....Economic development in Beaufort County has been a fool's errand and a terrible waste.

Good riddance to the single most inept, pretentious and unaccountable waste of money we could have ever conceived.

Commented: Monday, May 21st, 2012 @ 10:49 pm By: Warren Smith