Electricity bills for Rock Hill residents will likely rise starting this summer.
The agency that sells power wholesale to the city says its costs are increasing by 6.7 percent, which will mean higher bills for city residents.
In previous years, the city made cuts in the utility department budget to offset the increased cost of electricity. It raised rates to customers by 4 percent last year.
Mayor Doug Echols said the City Council's goal again will be to keep the increase in rates "as low as we possibly can. We know that's what's important."
But, "realistically, there is going to be an increase, one as reasonable as possible," he said.
Assistant City Manager Jimmy Bagley said it is getting increasingly hard to find places to cut in the utility department's budget. The department is an enterprise fund with revenues paying for expenses and improvements.
With expenses rising, Bagley said, "the money has to come from somewhere."
How much of the increase in wholesale costs will be passed along to city customers will be discussed during the council's budget discussions. The City Council must pass a balanced budget by July 1, when the new fiscal year starts.
The Piedmont Municipal Power Agency sells wholesale power to the city. Of the 10 cities that make up the agency, Rock Hill is the largest in population and use. On Monday, the agency met with the City Council, announcing for the second straight year its cost rose by 6.7 percent.
Three years ago, the costs increased 6 percent. The agency told the council to expect similar cost increases for the next few years.
Coleman Smoak Jr., the agency's general manager, said three factors affect the wholesale rate: the age of the Catawba Nuclear Station on Lake Wylie, which started operating in 1986; additional regulation for nuclear plants, particularly regarding security; and the expansion of nuclear plants overseas, specifically in China and India.
The overseas construction is increasing the price for the materials used in nuclear plants, as well as the expertise to build and maintain them.
The age of the Catawba plant means it needs periodic, often costly, upgrades.
The Piedmont Municipal Power Agency owns a 25 percent interest in Unit 2 at the Catawba Nuclear Station. Duke Energy operates and fuels the nuclear plant.
The agency gets 80 percent of its electricity from nuclear power.
Smoak said the good news for Piedmont Municipal Power Agency customers is the Catawba plant is one of the best run in the country with its costs 27 percent lower than the national average.