Albemarle is looking into the possibility of changing its electric rates.

Officials from ElectriCities, a nonprofit service organization representing cities and towns across the state that own electric distribution systems, presented the Albemarle City Council Monday evening with a cost of service study regarding the city’s electric rates.

ElectriCities made proposals about increasing monthly fixed charge rates for all customer classes — residential, residential all electric and small, medium and large general service.

For example, residential customers, which account for 81 percent of total customers in the city, currently pay a monthly fee of $12.17. However, factoring in the cost of service, the fee should be $17.53, ElectriCities proposed.

While the fixed monthly rates would increase, the energy charges would decrease which would help close the cost gaps and be less for customers, the proposal said.

The idea is to bring customer charges up to levels that reflect cost of service.

According to the study, some of the revenue from the customer classes are under recovering costs while the rest of the revenue from the classes are over recovering costs.

“We want to make sure our electric rates are appropriate,” City Manager Michael Ferris said.

The council agreed to look into the idea of increasing the fixed monthly rates through phase-ins.

Under the proposed first phase-in, residential customers would see their monthly rate increase from $12.17 to $14.

Albemarle residential customers pay 10.8 cents per kilowatt hour (kWh) for the first 500 kilowatts used and 11.5 cents per kWh above 500 kilowatts.

This is more than other local providers, including Union Power Cooperative (customers pay 10 cents per kWh for the summer and for the first 1,000 kilowatts), Duke Energy (customers pay 8.7 cents) Pee Dee Electric (customers pay 10.81 cents for first 500 kilowatts and 10.10 cents after) and Concord (customers pay 9.74 cents). Albemarle is currently less than the North Carolina average of 12.34 cents.

The city gets its power from the Catawba Nuclear Station in York County, S.C. Albemarle is a member of the North Carolina Municipal Power Agency Number 1, which consists of 19 cities and towns in the state that all have a share in the Catawba Nuclear Station.

Though Duke Energy does not provide power to Albemarle, the city pays Duke to transfer the power from the nuclear plant to the city’s substations on Carolina Avenue, Central Avenue and Lee Lynn Drive.

The electric fund accounts for 46 percent of the city’s budget for the 2019-2020 fiscal year, which equates to roughly $32.5 million. The fund is independent of the general fund and the wastewater/sewer fund.

The city was able to use electric fund reserves to build the Central Avenue substation a few years ago, Ferris said. No debt was accrued for this project.

Though Albemarle’s electric rates might be more expensive for citizens than other providers, the city’s power is reliable and has won awards for its reliability, Ferris said.

Albemarle is one of 11 electric service providers in the state to be recognized as platinum level by the American Public Power Association, which “recognizes utilities that demonstrate high proficiency in reliability, safety, workforce development and system improvement.” Platinum is the second highest level behind diamond.

“As a city, we can be very proud of what we have been able to do with the rates for our customers and still remain a Public Power Award of Excellence winner,” Ferris wrote in his budget letter to the City Council.