MAC Posts 2015

December – How to Avoid Late Fees, Service Charges, Deposits, Etc.

Wake Electric members will pay over $500,000 in late fees and service charges for collections in 2015.  In a typical month, 7,000 members will incur a $5 minimum late fee and 150 members will actually be disconnected/reconnected for non-payment with associated service charges of at least $50.
In addition, Wake Electric currently holds security deposits on nearly 5,000 accounts unable to provide a good payment history or credit score sufficient to establish credit with us.  Those security deposits total more than $1.6 million.
We wish those numbers were closer to zero and they could be.  Several years ago, Wake Electric introduced a pre-pay option.  No extra cost, no transactions fees, no late fees, no service charges for collections, and no deposits.  You buy electricity the same way you buy gas for your car.  You buy it, then you use it.  When you run lower, you buy more.  If you run out, you are out until you buy more.
You can view your account balance online and we can call/email/text when your balance is low.  You can as little as $25 per transaction.  While there is no limit on the number of transactions, most members recharge their account about once each week.  You can recharge your account online, by telephone or at our office with a credit/debit card.  You can also make payments at any Walmart or CVS location.  See store requirements for payment options.
While more than 1,300 members have already signed up for pre-pay, we think that many more could save money and see significant benefits.  For additional details or to sign up for pre-pay, contact Wake Electric’s customer service office at 1.800.474.6300 or 919.863.6300.
Do you have a question or a comment about the pre-pay concept?  If so, please contact us at

November – The World’s Biggest Environmental Problem

Generally, we try to limit our topics in this forum to issues that affect Wake Electric members directly. Recently, we have gotten a bit further afield with a topic with global implications (EPA’s rules to reduce carbon dioxide emissions) and how China, in particular, may impact our efforts to solve that puzzle. Keeping that broader perspective for one more topic, let’s think about the opportunities for rural electrification on a global scale.

According to a new study by the World Health Organization, the world’s biggest environmental problem is indoor air pollution. Indoor air pollution causes the premature deaths of 4.3 million people each year, primarily in rural Africa and India.

It’s hard for us to imagine the scale of this ongoing catastrophe since premature death from indoor air pollution in the US is practically zero. It’s also hard for us to imagine that much of the world’s deadly indoor air pollution comes from cooking.

Seventy-five years ago, when electricity was just coming to the rural US, a wood-fired cook stove in the kitchen was standard equipment. As soon as electricity was available, however, the transition to the electric range came quickly. By the mid-1950s, most of the wood cook stoves had disappeared.

Bringing central station electricity to rural America was certainly beneficial to everyone but no one benefited more than the women who spent much of their day in the kitchen. Many women in rural Africa and Asia are still waiting for electricity (and dying prematurely).

Building a reliable electric generation, transmission and distribution system for rural Africa and India would be a huge undertaking but we know how to do this. With current technology, it should be easier, cheaper and cleaner than our rural electrification efforts 75 years ago.

We clearly have the ability to solve the world’s biggest environmental problem and prevent millions of premature deaths. Yet, there seems to be little interest in proceeding. Much of the world’s environmental attention and resources are focused instead on longer term issues (such as global climate change) where the potential solutions are currently far less obvious.

Do you have a question or comment about indoor air pollution? If so, please contact us at Thanks.


October – China is Booming

As discussed in last month’s post about carbon dioxide emissions, the developing world (particularly China) is becoming increasingly important in terms of global resources.  We are coming to realize that our decisions (such as energy and environmental policy), while still important, no longer play a dominant or leadership role globally.

The population of the U.S. is 320 million, roughly 4 percent of the world’s population of 7.3 billion.  Both China and India have populations of roughly 1.3 billion or 4 times the U.S. population.  Unlike India, China is quickly making the transition to a modern economy.  By any measure, even with the recent slowdown, China is booming.

In electric utility terms, China now has 1,250 Gigawatts of electric generation capacity.  That’s about 25 percent more than U.S. generation capacity of about 1,000 Gigawatts.

For more statistics about China’s energy sector, click here.

A few interesting facts from the report include:

  • China consumes almost half of the total coal produced in the world.
  • China is the world’s largest coal producer.  It is also the biggest coal importer.  Most of China’s coal imports come from Indonesia and Australia.
  • China produces almost half of the world’s steel.  In 2013, they produced 779 million tons of steel.  By comparison, the U.S. produced 87 million tons.

While the U.S. remains the only military superpower, China is well on its way to becoming an economic superpower.  China clearly has its own agenda and makes its own rules when it comes to energy and environmental policy.

It is within this context that we are attempting to solve the problem of global climate change by dramatically reducing U.S. carbon dioxide emissions from burning coal. China appears to be happy to let us try.

Do you have a question or comment about the EPA’s final rule on carbon dioxide emissions? Please respond to


September – EPA Carbon Dioxide Rules

As widely reported in the news media, the Environmental Protection Agency (EPA) has published its final rules for reducing carbon dioxide emissions from power plants in the U.S. While much has been said about the overall national goals, the actual EPA rules are state specific, which is unprecedented.

Last year, in commenting on the proposed rules, we described some of the EPA’s subjective assumptions as “counter-productive, arbitrary and unfair”. To EPA’s credit, many of those assumptions have been replaced or corrected in the final version. However, EPA’s continued unwillingness to recognize existing nuclear power generation in calculating a state’s “carbon footprint” is still puzzling. For North Carolina, where one-third of the state’s electricity is nuclear (with zero carbon dioxide emissions), it dramatically overstates the carbon dioxide emissions from generating electricity.

The speed and scope of the new EPA rules are remarkable. Many states that primarily use coal to generate electricity are being required by the EPA to quickly replace many of the state’s power plants. While the final rules are set for 2030, interim steps require that many of the replacement power plants will need to be in operation by 2022. Regardless of the costs, which will be very significant in some states, seven years to plan and build new power plants is a very ambitious (some say impossible) timeline.

The top ten states that will see the most impact are Montana, North Dakota, Wyoming, Kansas, South Dakota, Illinois, Iowa, Kentucky, Nebraska and West Virginia. We think it is safe to say that these states, and possibly others including North Carolina, will use every opportunity (legal, political and public opinion) to make their case that the new EPA rules are far too aggressive and will be far too expensive.

One of the arguments they will make is that the basis for the new rules (climate change resulting from carbon dioxide emissions) is a global issue. China currently adds 40 new coal-fired power plants each year and by 2030, China alone is projected to add 10 times the amount of carbon dioxide to the atmosphere that the new EPA rules would reduce. Some will also argue that the EPA ban on all new coal-fired power plants and the forced retirement of 100 coal-fired power plants in the U.S. will make little difference when worldwide, 59 different countries are expected to build more than 1,200 new coal-fired power plants in the next 10 years.

For North Carolina, we think the new EPA rules will probably accelerate the current transition from coal to natural gas for generating electricity. As discussed in earlier posts, N.C. electric utilities have already invested at least $7 billion in that transition. As a result, Wake Electric’s generation mix has declined from 40% coal to 20% coal since 2005.

Do you have a question or comment about the EPA’s final rule on carbon dioxide emissions? Please respond to


August – Voltage Optimization – it’s 120 volts, right?

Actually, the standard is 120 volts plus or minus 5 percent.  Or, anywhere between 114 and 126 volts.
In the past, we typically designed and operated the electric distribution system in a way to use the full voltage range so that during a peak period, the first house (one closest to a substation) on a distribution circuit would see about 126 volts and the last house would see about 114 volts.  The drop in voltage is caused by the electrical resistance in the power line conductor and reflects energy lost as heat.

As the wholesale cost of electricity has increased over the years, we have found it to be cost effective to invest capital in additional conductor capacity to reduce losses.  We have also added additional communications equipment, voltage regulators and capacitors to better control the distribution voltage.  As a result, we are no longer using the full range of standard voltage on many circuits during normal operations.

The unused voltage range gives us a new tool to use in determining the optimal voltage profile on a feeder-by-feeder and minute-by-minute basis.  During a peak load period, for example, we could reduce the first house voltage to 120 volts and, due to the increased efficiency of the larger conductor, still have at least 114 volts at the last house on the feeder.  Also, each residential meter provides an alarm function if the voltage is outside the acceptable voltage range.  That real-time optimization would allow us to reduce load during peak periods and reduce wholesale power costs without a noticeable change for the member.  Early indications are that a 5 percent voltage reduction results in a 3 to 4 percent reduction in load.

All this gets complicated since Wake Electric operates 19 substations and 3,000 miles of power lines on 100 different circuits or feeders.  Most feeders are monitored and managed individually.  Obviously, it takes highly automated systems to optimize these voltage profiles.

But it seems that it’s worth the investment and the effort.  An optimal voltage profile across the system could significantly reduce our wholesale power costs.

Do you have a question or comment about Wake Electric’s voltage optimization plan?  Suggestions for future topics? Please respond to

July – Energy Trends:  Renewables

In recent posts, we have discussed some historical trends that influence members’ perceptions on energy use including 1) “Live Better Electrically”, 2) Energy Conservation and 3) Energy Efficiency. We think the most recent trend or layer to consider is Renewables.

Starting about ten years ago, the topic of Renewable Energy became very popular. In some ways, it was similar to the Energy Conservation trend of the late 1970s in that the focus was as a solution to a national crisis. In this case, the crisis was “global warming” or “climate change” attributed to using fossil fuels (primarily coal) to generate electricity.

In North Carolina, there were two primary drivers: 1) a state mandate that required electric utilities to generate 10 percent of the electricity output using renewables by 2018 and 2) state tax credits that when combined with federal tax credits and corporate tax accounting benefits that could cover more than 80 percent of the cost of solar generation. As you might expect, that combination of mandated purchases and favorable economics has produced a large number of solar farms across North Carolina.

For Wake Electric, the combination produced an opportunity to sign long-term agreements to purchase solar renewable energy credits (RECs) associated with 75 million kWh annually from 23 large solar farms in eastern North Carolina. That is the equivalent of 10,000 typical residential rooftop solar systems and should be sufficient to meet the state renewables requirement.

For Wake Electric members directly, the renewables trend is harder to quantify. We think that lower solar panel prices and energy storage technology may make these systems more economically attractive in the future. However, some state and federal tax credits may soon expire which makes the economics worse. Also, some members think that environmental objectives associated with renewables are better achieved through conservation and/or energy efficiency.

Even with the rationale of increasing renewables to reduce the effects of “climate change” and the equivalence with energy conservation or energy efficiency, the renewables trend does not appear to significantly decrease members’ overall use of electricity from Wake Electric. It certainly introduces another layer into how members think about their electricity use.

So what’s next? A continuation of the current multi-layered approach? A new technology that pushes an older trend or layer back to the forefront? Something new? As we reflect on the 75 year history of Wake Electric and then look to the future, we assume that new trends will develop and new layers will be added to the already complicated and sometimes conflicting multi-layered approach that we see today.

Questions about energy trends?  Suggestions for future topics?  Please respond to


June – Energy Conservation & Energy Efficiency

In last month’s post, we discussed the dramatic increases in electricity use in the 1960’s and into the 1970’s as Wake Electric members installed new electric appliances and residential air conditioning. We have labeled that trend “Live Better Electrically” after the General Electric advertising campaign. The result was that by 1978, Wake Electric members’ average electricity use had tripled to 900 kWh per month.

About the same time, however, the term “energy conservation” was in the news, as you can see in this address from then-president Jimmy Carter.

While the issue was specifically about oil and natural gas resources, overall energy conservation (including electricity) was seen as a national priority. It certainly defined the trend in perceptions of energy use in that “using less energy was better”.

For Wake Electric members, the result was a significant decline in the rate of increase of electricity use. Eight years later, by 1986, Wake Electric members’ average electricity use had continued to increase but only from 900 kWh to 1,000 kWh per month.

While the “energy conservation” trend is now seen as more of a personal or economic choice and less of a national priority, it certainly added a layer of complexity in how we think about using electricity.

While “energy conservation” is about doing less with less, “energy efficiency” is about doing the same or more with less. It’s the difference between 1) turning lights off and 2) replacing light bulbs with LEDs.

For nearly twenty years, the trend was all about energy efficiency. Between federal standards, state building codes and market pressures, many residential appliances and heat pumps/air conditioning units now used far less electricity for the same result. We would have expected to see energy use per member to decline during that period.

Surprisingly, Wake Electric members’ average electricity use continued to slowly increase during that period from about 1,000 kWh per month to about 1,200 kWh per month. We think there are a couple of reasons. First, is the potential “rebound effect” of energy efficiency improvements.

Second, we think that energy efficiency is just another layer built on earlier layers, including the “Live Better Electrically” layer. Members continue to add new uses of electricity such as more TVs, more PCs and many more mobile devices that need to be plugged in to recharge. The combined effect is a reduced rate of increase but still increasing amount of electricity use

Questions about energy trends?  Suggestions for future topics?  Please respond to


May – Energy Trends: Electrification (Live Better Electrically)

Last month, we discussed four major trends (electrification, conservation, energy efficiency, and renewables) that have shaped members’ thinking about using electricity over Wake Electric’s 75 year history.
This month, we’ll start at the beginning, with electrification.  In 1940, the year that Wake Electric was incorporated, electricity was used primarily for lighting.  Many members initially used less than 50 kWh per month.  By 1950s, however, many electric appliances were becoming popular.  General Electric’s “Live Better Electrically” campaign was an example.

Live Better Electrically
Ronald Regan GE Theatre

For Wake Electric members, the big jump in electricity use began in the 1960s with the introduction of residential air conditioning, followed by electric heat pumps for heating and cooling.  In 1960, the average energy used per residential member was 300 kWh per month.  That amount increased to 500 kWh per month by 1968 and 700 kWh per month in 1973.  By 1978, average residential electricity use had grown to 900 kWh per month.  That was a 300 percent increase in just 18 years.

In some ways, the trend to “live better electrically” continues to be the baseline for residential energy use but the world was changing, as we’ll see in next month’s post.

Questions about energy trends?  Suggestions for future topics?  Please respond to


April – Energy Trends – Four Major Trends in a 75-year History


As we celebrate Wake Electric’s 75th anniversary, we’ll try to put that history into perspective by highlighting some of the most popular energy trends from decades past.

Electrification – “Live Better Electrically” (Starting in the 1950s) – Over the years, Wake Electric has encouraged members to consider using electricity for new things. Sixty years ago, we were offering special rates and cooking classes for using your new electric stove. Our original customer service office in Wake Forest, built back in the 1950s, actually had a “demonstration” electric kitchen off the lobby. Later, we encouraged members to consider switching to electric heat pumps to heat their homes. Now, most members use electricity for many uses that were once considered novel: lighting, refrigeration, well pumps, cooking, water heating, laundry, and heating/cooling.

Conservation (Mainly since the late 1970’s) – Many members try to conserve electricity by avoiding waste, turning off lights and adjusting their heating/cooling thermostat. All residential members have on-line access (SmartHub) to hourly usage data to help identify conservation opportunities. The most effective way to conserve is to switch over the pre-pay and over 1,100 Wake Electric members have already done so. National studies indicate most folks that pre-pay for electricity use 10% less.

Energy Efficiency (New standards starting in the 1980s) – Many homes are much more energy efficient than in the past. Better construction and insulation, more efficient lighting, appliances and heating/cooling systems all contribute to improved energy efficiency. Most homes can become even more energy efficient but at some point, additional investments produce diminishing returns. We think a good general rule is that investments in energy efficiency should pay for themselves in 7 to 10 years. Again, access to hourly usage data (SmartHub & Green Button) provided free by Wake Electric can provide the data to make good decisions.

Renewables (Mostly since 2005) – Many large solar farms have been built in eastern North Carolina, due primarily to favorable federal and state tax credits. Wake Electric has helped with the financial feasibility of 23 of these large solar projects by signing long-term contracts to purchase the solar renewable energy credits associated with more than 75 million kWh annually. That’s the equivalent of more than 10,000 residential scale solar installations.Residential scale rooftop solar projects continue to have less economic benefits with the average installed cost per watt more than double that of larger projects.

From Wake Electric’s perspective, this 75 year history reflects a fairly complex multi-layered approach. All of these trends or layers play a role in how members think about their energy options. Some members concentrate on one trend while others might use a combination of all four to find an approach that feels right for them.

Questions about energy trends? Suggestions for future topics? Please respond to


March – Spotlight Solar

Over the next few days, we will install several solar arrays at Wake Electric’s new office building in downtown Wake Forest. The arrays were designed and built by Spotlight Solar in Chapel Hill and will be installed by PowerSecure Solar in Wake Forest.

We also plan to install several energy storage units using lithium-ion batteries like those used in electric vehicles. Those units will store the solar power produced during the middle of the day for use during the next peak load period, which is early morning in the winter and late afternoon in the summer.  We think this will be a good opportunity for us to learn more about how to much of seamlessly integrate small scale solar and energy storage technologies.

 Wake Electric is already purchasing solar renewable energy credits for more than 75 million kWh annually from 23 large solar farms across eastern North Carolina, the equivalent of more than 10,000 residential-scale solar installations. We look forward to using the Spotlight Solar arrays to highlight Wake Electric’s commitment to use solar power to meet the state requirement for renewable energy.

Questions about solar energy? Suggestions for future topics? Please respond to


February – Time-of-Use-Rates

Last month, we discussed the economics of using energy storage to increase the value of solar power by “time shifting” solar generation from primarily off-peak to on-peak.  A number of members had comments and questions about also “time shifting” their energy usage to take advantage of Wake Electric’s time-of-use residential rate.

Our current “time-of-use” residential rate is as follows:  the on-peak rate of 27.16 cents per kWh for 4 to 5 hours per day (five days per week) is 3.5 times the off-peak rate of 7.76 cents for the rest of the day (and all day on weekends).

The 7.76 cents “off-peak” rate per kWh is nearly a 30 percent discount from our regular rate of 10.944 cents per kWh for nearly 90 percent of the hours in a year.  Even using the same amount of energy, if you can “time shift” much of your energy use to “off peak” hours, there can be a significant savings.  Many members can do that by using a water heater timer or programmable thermostat for your heating and/or air conditioning system.

A word of caution, however:  time-of-use rates are not for everyone.  You have to pay attention when you use electricity.  If not, your electric bill could go up, not down.

Much of Wake Electric’s wholesale power costs are determined by energy use during peak periods.  A time-of-use retail rate actually reflects those costs more accurately.  Also, new power plants are bult primarily to provide energy during peak periods.  Anything we can do to avoid building new power plants saves money and avoids new environmental concerns. Questions about rates? Suggestions for future topics? Please respond to


January – Energy Storage Economics

In last month’s post, we talked about the potential for an increasing role for energy storage, particularly for solar power.  A number of members asked questions about the economics of energy storage so we thought a follow-up post might be helpful.

In order to maximize the benefits of energy storage to solar power, interested members should consider Wake Electric’s “time of use rate” residential rate.  For our current “time of use” residential rate, the on-peak rate of 27.16 cents per kWh for 4 to 5 hours per day is 3. 5 times the off-peak rate of 7.76 cents for the rest of the day.  Said another way, using energy storage to “time shift” solar power from off-peak to on-peak increases the retail value by 3.5 times or nearly 20 cents per kWh.

Of course, it costs something to store the energy, even for a few hours.  With current lithium-ion technology, a battery to store 1 kWh of energy costs about $500.  Assuming a life of 2,500 charge/discharge cycles (about a ten-year life) gives you 2,500 cycles to recoup the cost.  So, $500 divided by 2,500 one kWh cycle is 20 cents per kWh , or about the same as the increased value – essentially a break-even proposition using today’s battery costs.

Some projections of battery costs indicate the costs might be as low as $100 per kWh in the relatively near future.  If so, the battery cost per cycle drops to 4 cents.  Spending 4 cents to gain an incremental value of 20 cents per kWh would appear to be a very attractive economic option.

While energy storage economics can work with or without solar, energy storage can solve solar power’s two big limiting factors:  the mismatch between solar power’s midday peak and when folks use electricity the most (early morning in winter and late afternoon in summer) and solar intermittency on a partly-cloud day.

Even without federal and state tax credits in the future, if they are not extended, we think the declining costs of both solar power and energy storage may make the combination a compelling alternative.

Questions about energy storage economics?  Suggestions for future topics?  Please respond to