Smithfield appeals Utilities Commission ruling

dquizon@newsobserver.comMay 20, 2013 

— The town is taking the N.C. Utilities Commission to court.

Last month, the Utilities Commission again sided with developer John Shallcross Jr. in his now-lengthy dispute with the town. For land his development company owns near Industrial Park Drive, Shallcross wants to buy electricity from Duke Energy Progress because the town’s rates are 40 percent higher than Duke’s.

In December, the Utilities Commission said Shallcross could choose Duke Energy Progress. The town appealed that ruling but lost last month. Now the town is appealing to the N.C. Court of Appeals, which could drag the feud into a third year.

Shallcross said he was happy that the commission had again sided with him. “It’s been ridiculous,” he said of his wranglings with the town. “I’m just pleased with the result.”

Shallcross and his business partners want to turn a property on South Equity Drive into a hotel and restaurant. The property is close to both town and Duke power lines and years ago, the town and private utility agreed to divvy up customers in the shared territory. The town got Shallcross’s property, but he objected and appealed to the Utilities Commission, which, in December, said the arrangement between the town and Duke was unlawful.

Under North Carolina law, the commission said, customers in overlapping service areas can choose between providers. “The agreement between the town and (Duke Energy) Progress denied the right of the potential user to choose between vendors,” the commission said in its decision.

But Smithfield Town Manager Paul Sabiston said the ruling is inconsistent with past rulings, which allowed similar arrangements to the one Smithfield had with Duke, with no regard for customer choice. “Their credibility and their analysis is highly suspect at this point,” he said of commission members.

Technically, the Utilities Commission in April did not hear a town appeal. Its rules do not allow appeals when decisions are unanimous, which was the case in December. Instead, the commission simply affirmed its earlier decision.

“There wasn’t any appeal available because it was a unanimous decision,” Shallcross said.

The town has been quiet since the latest word from the Utilities Commission, although council members have been meeting in closed session to discuss “pending legislation.”

The town has previously argued that it would be a waste of resources for both the town and Duke Energy to have so much overlapping territory. “Both entities are spending too much money providing power to too few lots,” Sabiston said earlier this year.

When the town first appealed the Utilities Commission ruling, Mayor Daniel Evans said voiding the agreement with Duke could make it hard to find new customers.

ElectriCities, which provides management services to public power towns, is covering the cost of the litigation, but Shallcross said the cost will ultimately fall on Smithfield electricity customers. “I can’t imagine ElectriCities has free money lying around,” he said. “They’re going to have to pass that cost on to customers.”

Representatives of ElectriCities did not respond to requests for comment.

Quizon: 919-836-5768

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