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DOBSON – Surry County electricity customers usually don’t have a choice of their service provider – but the spirit of competition isn’t necessarily a good thing either, due to an unusual situation surrounding a planned prison in Dobson.
Faced with the choice of awarding a contract to power the new detention center to Duke Energy or Surry-Yadkin Electric Membership Corp., the Surry Board of Commissioners chose the latter, but in a split decision.
This result reflects the concerns of some commissioners that while the electric co-op will offer lower costs in the short run due to what one dissenter calls “teaser rates,” county taxpayers could face significant expenses. higher in the long run by not choosing Duke.
“I’m not interested in teaser rates,” Commissioner Eddie Harris said of a special economic development tax offered by Surry-Yadkin for seven years, calling it “intangible” and adding that he focused more on the decades to come.
“Life is a long time – it’s forever.”
“Both are big companies, it’s not about that,” said Commissioner Van Tucker, who voted against the use of Surry-Yadkin in a meeting without Harris, being outclassed by fellow Commissioners Bill Goins, Larry Johnson and Mark Marion.
In a subsequent meeting, Tucker sided with Harris on the losing side of a motion to try to undo that action which produced a 3-2 vote.
“I think this is the best business deal for the taxpayer,” Tucker added Wednesday afternoon.
Based on figures gathered by Harris, he estimates that the average cost of using the Surry-Yadkin service – after the seven years – would be $ 103,170 per year compared to $ 93,579 for Duke Energy.
Marion, the chairman of the board, disagrees with this scenario, saying he chooses to go with guaranteed savings in the short term rather than bet on lower rates possible by Duke later.
“It was obvious to me, because no one can predict the future,” Marion explained Wednesday afternoon.
“The first year, it saves us $ 8,000,” and so on during the special period, he said of the deal that asks Surry-Yadkin to reassess the rate situation afterwards. its end.
Marion said market conditions make it difficult to predict the outlook for energy prices seven years from now, with what Duke might charge so uncertain today.
“Nobody knows,” said the chairman of the board. “If the power rate (in general) increases, Duke will also increase.”
“No Man’s Land”
The unusual situation allowing such a debate concerns the location of the new prison on a property adjacent to the existing detention center near the Dobson center.
“It’s right behind,” Harris said earlier this week.
Although each electricity supplier has a separate presence in different parts of the county, the new prison site would be in “No Man’s Land,” meaning county officials had a choice between the two.
In March, commissioners approved the issuance of up to $ 50 million in limited bond bonds in fiscal year 2021-2022 to build the prison and fund another project for Elkin City schools. Most of it is the detention center.
“It’s a $ 40 million project,” Harris said.
Almost everything else in town is served by Duke Energy, according to the State Road Community Commissioner, who acknowledged that the co-op provides electricity to some facilities, including the Surry County Health and Nutrition Center, near the US 601.
Duke Energy already has infrastructure at the new prison site, including a nearby “right there at the Forensic Center” substation, which Harris said points to another factor in Duke’s favor: reliability.
“In is no more reliable than that,” Harris said of the particular substation’s proximity.
Meanwhile, the Surry-Yadkin Electric Membership Corp. the closest is in Salem Fork, about four miles as the crow flies.
The co-op initially offered its discount rate for a five-year period, but apparently got wind that at least some board members were leaning towards Duke Energy, Harris said. Surry-Yadkin then extended that two-year period and also said he would sell the county government a generator at cost.
Harris says he’s researched the problem extensively, navigating a maze of websites detailing kilowatt-hour charges and other complexities, and says it’s obvious Duke Energy will be the “much less” option. dear ”after seven years. “I spent quite a bit of time on this.”
Duke can’t offer pricing for the teasers because under the laws that govern her, which are different from the co-op, she must treat all customers the same, Harris said.
“According to anyone’s analysis, Surry-Yadkin Electric Membership Corp. is more expensive electricity and it will cost taxpayers tens or even hundreds of dollars in the long run, ”he said. “What you really have to do is compare apples to apples.”
In addition to the financial implications of the power contract, Harris and Tucker have issues with how the decision unfolded.
At a meeting of commissioners on April 5, the county council voted 3-1 to award the power contract to the cooperative, a decision highlighting the absence of one of its five members.
“I buried my mother that day,” Harris revealed.
Another bone of contention is with the board discussing the issue beforehand in a closed session, which is usually reserved for very sensitive issues around personnel or economic incentives for a new industry, among others.
County Attorney Ed Woltz, in a letter later in the month, defended this discussion based on a provision in the North Carolina Open Meetings Act regarding information about offers submitted by vendors of electricity. The lawyer’s position is that this only became public after the contract was awarded.
The law states that an elected body “may” hold a closed session even on the most sensitive issues, not that it must.
“I think it was a deal big enough for taxpayers that we should have had an open discussion,” Commissioner Tucker said on Wednesday. “I think this is the best deal for the taxpayer.”
At another meeting on April 19, Harris spoke at length against actions taken earlier in the month due to his absence at the time.
There was also an attempt on April 19 to cancel the contract award to Surry-Yadkin, reflecting Harris and Tucker’s desire to continue education. He failed in a 3-2 vote.
As a result of this action, it was learned that Commissioner Marion’s father had a long association with Surry-Yadkin Electric Membership Corp., which is based in Dobson.
“I’ll just say that Surry-Yadkin has always been a good business for the community,” Marion replied Wednesday, when asked about this relationship.
“My father who worked there for 43 years had no bearing on my vote.”
Not a done deal?
Despite two votes on the matter, it may still not be set in stone, according to Tucker.
“It’s a deal made after you vote and sign a contract.”
Tucker said that hadn’t happened earlier this week.
“I don’t think it’s too late,” he observed of the possibility of changing the current course of action, which Commissioner Harris recognizes as being in order.
“At first glance, this is really wrong,” he said of the electrical service decision.
“It was wrong for many reasons.”