Our Opinion: State could fix Wilson's utility late fee fiasco
Dave DiFilippo cartoon
If struggling utility customers’ late fees continue to bankroll a Wilson City Council slush fund managed without public input, the road to reform may run through Raleigh.
After the town of Louisburg — a public power community like Wilson — ran afoul of a state law limiting electric revenue transfers, the N.C. House passed a bill to give town leaders more flexibility while preventing them from using ratepayers as an all-purpose piggy bank. Similar legislation may be needed for Wilson if current practices persist.
House Bill 206 would allow Louisburg to use utility revenue for economic development and property redevelopment as long as the town’s electric rates stay within 10% of adjacent providers’ and it maintains a three-month reserve for utility operating expenses. Bill sponsor Rep. Matthew Winslow, R-Franklin, told The Insider state government news service last month that he was willing to support an exemption for Louisburg with those “guardrails” in place.
Guardrails are sorely needed in Wilson, where council members rely on ratepayers’ misfortune to funnel cash to their favored causes. Each year, the city typically transfers $280,000 in profit from Wilson Energy customer late fees to a treasure chest that only a seat on the council dais can unlock.
We raised the alarm in 2017, pointing to the comfortable surplus as a clear indication that Wilson Energy late fees are too high. They far exceed any expense the city incurs to keep the lights on when bills are past due, functioning as a regressive tax on low-income residents.
Should a local government rake in hundreds of thousands in pure profit from its least solvent utility customers in a Tier 1 economically distressed county with stubbornly high unemployment? Wilsonians’ answer is a resounding no.
In recent years, the city council used late fee proceeds to fund the N.C. Whirligig Festival, the Wilson 20/20 Community Vision group now known as Wilson Forward, Preservation of Wilson and the Eyes on Main Street Outdoor Photo Festival. Worthy causes to be sure, but with a $265 million budget at the council’s disposal, shaking down utility customers can’t be the only way to fund festivals and contribute to public-private partnerships.
The pool of unseemly profit used to be called the council’s discretionary fund. Thanks to a euphemistic rebranding, it’s now the Community Investment Grant Fund, though it strains credulity to refer to the fund dispersals as grants. There’s no call for proposals allowing agencies to apply for money and no discernible review process that any grant writer would recognize. As far as we can tell, council members just dole out the cash at will.
Maybe they feel less scrutiny is warranted because the fund doesn’t contain property tax revenue. Yet all city money is public money, whether the source is taxpayers or ratepayers. Wilson residents should have a say in how that public money is spent. Other Wilson County governing bodies don’t maintain fat discretionary funds whose uses evade the ordinary budget process each fiscal year.
Wilson Energy has been on a years-long upward trajectory since the General Assembly authorized an asset sale to help the N.C. Eastern Municipal Power Agency reduce its debt burden. That allowed Wilson to lower residential electric rates, achieving parity with Duke Energy Progress. Wilson consistently wins annual awards from ElectriCities of North Carolina, a cooperative that provides management services for NCEMPA members.
We’re fortunate to have Wilson Energy Director Rich Worsinger at the helm. Wilson’s electric linemen respond quickly to repair downed power lines after severe storms, and the customer service team is helpful and professional. City staff isn’t to blame for the excessive late fees. Responsibility rests with elected council members who would rather overcharge residents who fall on hard times than deprive themselves of the slush fund those late fees generate.
If the council remains unwilling to embrace reform, the General Assembly could step in to impose a cap on electric late fees and restrict their use to legitimate utility-related purposes. We’ve suggested holding the money in a risk management account to cover debt write-offs, which would eliminate the need to collect lump-sum deposits from residential customers with spotty credit histories. Council members would be wise to consider such compassionate solutions for their constituents.
Lawmakers can and should rein in Wilson’s questionable billing and fund transfer practices if the city council fails to act. Let’s hope that won’t be necessary.
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