north arkansas electric cooperative
The Thomas B. Fitzhugh Generating Station operates on fuel oil reserves at the peak of February’s severe winter temperatures to help shield electric cooperative members from skyrocketing natural gas costs.
The moderate temperatures of spring have arrived, but the effects of February’s extremely cold weather, which caused a record demand for electricity across multiple states, still linger. That record electricity use combined with skyrocketing fuel costs for electricity production during that period mean North Arkansas Electric Cooperative members will have a higher-thannormal power cost adjustment on their bill. The power cost adjustment is shown on bills as “POWER COST ADJ TO/RTO RIDER.” It is how NAEC adjusts for the increase or decrease in the cost of generating and distributing electricity. These costs change rapidly. Rather than changing the co-op’s base kWh rate every month, we use this line to pass on either additional costs or savings to members. (Eight of the past 12 monthly power cost adjustments have been a credit.) Each month, the power cost adjustment factor provided by NAEC’s wholesale power provider Arkansas Electric Cooperative Corporation is 22
APRIL 2021
NORTH ARKANSAS ELECTRIC COOPERATIVE
multiplied by kilowatt hours each member used in the current month. Members will have a credit or debit depending on the cost of energy during a particular billing cycle. As an example, February’s power costs — reflected on April statements each year — usually are higher and lead to a debit. AECC maintains a diverse mix of generation resources to help keep fuel costs low, but a large portion of its wholesale power generation comes from natural gas. During February’s record cold temperatures, prices for natural gas increased to unusually high levels as supplies decreased. To help minimize the impact to members, the power cost adjustment accrued during February’s period of below-freezing temperatures will be split across nine months and incorporated into the regular monthly power cost adjustment. NAEC does not make money on the adjustment. The Arkansas Public Service Commission mandates the co-op only use the adjustment to recover actual fuel costs billed by AECC.
IMAGES: AECC; NRECA; BOHDAN TSYHANOV/STOCK.ADOBE.COM
Extreme cold period leads to increased power costs