Why is my Fuel Cost Adjustment so HIGH?
What is a fuel cost adjustment?
If the amount paid by C&L Electric to its wholesale electric supplier for the energy purchased differs from what is built into the base electric rates, then this fuel cost adjustment is applied to each member's bill. This adjustment factor — charge or credit — is multiplied by kilowatt-hours used in the current month. The fuel cost adder is a direct pass-through for increased costs. There is no markup over what C&L Electric must pay for fuel used for power generation.
Why is it going up now?
Due to supply-chain issues and labor shortages with railroads that supply some generation facilities, AECC has had to rely more on natural gas as a fuel source for generating electricity, just as the market price for natural gas has sharply risen. U.S. natural gas prices were as high as $7.48/MMBtu in mid-April. Natural gas prices were almost three times higher in April 2022 than in April 2021, and more than four times higher than in April 2020.
When will the fuel cost adjustment go down?
Natural gas prices are anticipated to remain high for the rest of 2022. AECC anticipates some relief in fuel costs as supply chain issues are resolved and additional generation facilities are brought back online, but the fuel price will likely remain above average for at least the next several months.
What can I do?
The most effective way to lessen the impact of increased energy costs is to reduce your energy usage:
- During warm months, keep your thermostat on the warmest comfortable setting.
- Have your air conditioner serviced to maintain its efficiency and change your filters frequently.
- Close shades and curtains during the day and use LED bulbs for lighting.
- Seal around your doors and windows and make sure your attic is adequately insulated.