The City buys its wholesale electricity from the Grand River Dam Authority who has been experiencing unusually high natural gas prices as are all electric generation facilities that rely on natural gas. GRDA is required by the Oklahoma Corporation Commission, just like investor-owned utilities in Arkansas are required by the Arkansas Public Service Commission, to recover costs. The process for recovering the increased fuel cost is through a Power Cost Adjustment (PCA). The PCA is designed to recover actual fuel and purchased power costs from all of GRDA’s contract sales to its wholesale customers. These costs are captured monthly and recovered by GRDA from its customers over a rolling 12-month period.
Just as consumers have seen an increase at the gas pumps in prior months, the fuel cost associated with the generation of electricity has also increased but hasn’t started to trend down as gas prices have. This increased cost for the generation of electricity is reflected in the PCA on our electric bills. The City’s electric rate per kilowatt hour (kWh) includes a built-in PCA rate of $0.023. When the monthly PCA rate, as determined by GRDA, is less than $0.023, as it was during the first five months of 2021, electric customers receive a credit on the electric bill. When the PCA charge is higher than $0.023 the additional amount is passed on to the customers. Since the spring of 2021, the PCA has been greater than $0.023/kWh and our electric bills have included the additional charge. For 2022, the monthly PCA rate has averaged $0.03647 compared to a 2021 yearly average of $0.0243, which has resulted in a 50% increase in the average PCA rate and a significant increase in one’s total electric bill. It should also be noted that the summer of 2022 has been significantly hotter and drier than recent summers, leading to increased customer electrical usage, which is another contributor to the higher electric bills.
The PCA revenue is paid to GRDA to cover their increased cost in producing the wholesale electricity. The PCA is not City utility revenue and is not revenue to cover the $3,800,000 cost of the 2021 winter storm, which was paid from the City’s utility reserves and was not passed on to the customers. The City’s utility rates have not increased since the beginning of 2021.
If you have concerns that your electric meter may not be reading your usage accurately, you may request the City to test your meter by calling 479-524-5136 Option #1. A $25 testing fee will be added to your utility bill if it is determined that the electric meter is working correctly, and no fee will be charged if it the meter is determined to be defective. Also, if you are a Black Hills Energy natural gas customer you may be eligible for a free energy assessment of your home. You can find out more by using this link: https://energy-readyarkansas.com/home-assessment-eligibility.html