Monday 10 July 2017

OG&E raises fuel portion of electric bills because of higher prices

Electricity customers of Oklahoma Gas and Electric Co. will see higher bills starting this month because of higher natural gas prices and what the utility called grid congestion costs related to wind generation in the region.
The typical residential customer will see an increase of about $9.60 per month from the higher fuel-related costs. The increase will be reflected in the fuel adjustment factor portion of customer bills, which is reported as a long decimal as a rate per kilowatt hour.
Under Oklahoma law, regulated utilities can't profit on fuel and purchased power costs. Those pass-through costs are tracked by the utility and regulators at the Oklahoma Corporation Commission and adjusted periodically.
OG&E said because of higher fuel and related costs, the utility had an undercollection amount of $86 million by May. Fuel costs will be reviewed again in the fall.
"We could wait and do it outside of the summer months, but what we'd see is that undercollection would continue to grow and create a much higher bill impact," OG&E spokesman Brian Alford said Thursday. "Doing this now limits that impact to customers."
The latest market report from the Southwest Power Pool showed natural gas prices about a dollar higher than spring 2016. Average natural gas prices were $2.70 per thousand cubic feet in the first part of this year, compared to $1.68 per thousand cubic feet in spring 2016.
Alford said customers benefited from historically low natural gas prices for about 18 months. Summer bills are now returning to levels seen in 2015, he said. OG&E did not provide a breakdown on how much of the fuel adjustment could be attributed to higher fuel costs versus higher grid congestion costs.

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