Rock Hill residents likely will pay more for electricity starting this summer.
How much, however, won't be determined until the City Council sets its priorities and budget for the upcoming fiscal year which begins July 1.
The wholesale cost of electricity is rising 6.7 percent. The amount of electricity the city uses overall, and during peak times such as hot summer days, has increased, too.
The result is about an 8.3 percent increase in electricity costs, assistant city manager Jimmy Bagley said Thursday.
The worrisome news for the council is the wholesale costs are likely to continue to increase each year, resulting in a more pressure to raise rates annually.
"There will be some increase in rates," Mayor Doug Echols said. "We will try to keep them as low as we can."
3 factors in price jumps
Last year, wholesale rates rose 6 percent. The council increased local rates by 4 percent.
The mayor and council members met with the city's wholesale provider, Piedmont Municipal Power Agency, on Thursday. Ten cities make up the agency with Rock Hill being the largest by population and one of the largest users of electricity.
Coleman Smoak Jr., the agency's general manager, said three factors are affecting the wholesale rate: the age of the Catawba Nuclear Station on Lake Wylie, 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 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.
Operating and maintenance costs at the plant have been steadily increasing since 2001, Smoak said.
Providers' agendas differ
In the past, PMPA used money from a rate stabilization fund to offset some of the rising costs.
The fund is nearly depleted, and it's not expected to increase for several years when funds used to pay debts will be available for other uses.
Council members are concerned that the city pay its fare share of the authority's costs.
They also asked how Duke's planned nuclear plant in Cherokee County could affect what the city pays to PMPA.
Smoak said construction of the Cherokee plant should not affect PMPA's contract for the Catawba Nuclear Station.
Echols said he wants to know more about how Duke is controlling costs at the Catawba plant. He said it might be time to take the issues to a "political level. Otherwise, you have to accept whatever Duke Power does to us."
He said Duke and the members of PMPA have different agendas. Duke's mission is to make money for its stockholders while the city's mission is providing electricity at reasonable rates.