TEXARKANA - Local electricity and natural gas customers can expect much higher bills following recent extreme winter weather, providers said Friday.
Citing a demand-driven spike in the market price of natural gas, which power generators use as fuel, Southwest Electric Power Co., Southwest Arkansas Electric Cooperative and CenterPoint Energy spokespeople agreed that the cost will be passed on to customers, though they say they are working with state regulators to minimize the effect.
The wholesale price of natural gas increased as extraordinary winter storms brought record-low temperatures to Arkansas, Texas and other southern states unaccustomed to them and demand shot up for energy to heat homes.
"With the extreme temperatures, power generation resources could not meet the high demand for energy across the 14-state Southwest Power Pool regional electric grid in which SWEPCO operates. For the first time in its 80-year history, SPP required emergency reductions in electric load by utilities across the region.
"The call for emergency energy conservation on Feb. 14 and the emergency controlled outages we were required to implement on Feb. 15 and Feb. 16 were indicative of the impact of the extreme weather on customers and the electric system that serves them," SWEPCO spokesperson Peter Main said in an email.
Rob Roedel, spokesperson for Arkansas Electric Cooperative Corp., the wholesale power provider for SAEC and 16 other electric co-ops in the state, also said the system was extremely strained.
On Feb. 16, he said, AECC "set an all-time peak firm load of 2,983 megawatts, which exceeded the previous peak of 2,760 megawatts set in January 2018."
"Even with industrial customers curtailing to help reduce load, Southwest Arkansas Electric hit a record peak of 170 megawatts. Normal peak for February, with industrial customers in full operation, would be in the 125-130 megawatt range," he said in an email.
The high demand resulted in a dramatic upswing in wholesale natural gas costs.
"Fuel costs to generate power to meet the very high level of demand were much, much higher than normal. The final level for consumers is still being calculated, however, the wholesale cost for natural gas during the week of Feb. 14, 2020, was approximately $1.98/MMBtu. On Feb. 15, 2021, the price skyrocketed to approximately $220/MMBtu.
"Natural gas is a traded commodity and demand was very high. Another factor in cost was the fact that many non-fossil generation resources were inoperable. For instance, many wind farms were unable to generate as the turbines were frozen," Roedel said.
Customers' base rates have not changed, Main said, and SWEPCO will not make any money on fuel charges.
"The 'fuel factor' used to calculate the power generation fuel cost on the bill is adjusted to make sure customers pay only SWEPCO's actual fuel costs. SWEPCO is prohibited from making a profit on fuel costs," he said.
CenterPoint, which provides natural gas service in Northeast Texas, also cited higher prices as the cause of expected bill increases.
"CenterPoint Energy took proactive steps to secure reliable natural gas supply ahead of and during the winter event, yet this unprecedented emergency resulted in significant natural gas costs that will affect our customers. Despite the extreme weather and market conditions, CenterPoint Energy maintained reliable natural gas service to our customers, particularly human needs customers. To meet our obligations to serve, however, the company was required to purchase quantities of natural gas supply through the spot markets at elevated prices.
"At this time, the actual treatment of cost related to natural gas purchases to meet customer demand has not been finalized. The company is reviewing all available options, including working with our regulators on a state-by-state basis, as well as natural gas suppliers and pipelines, to lessen the bill impact to customers," spokesperson Alejandra Diaz said in an email.
Customers simply using more power is another reason coming bills will be higher, Main said.
"The number of kilowatt-hours a customer used during this cold snap will likely be higher than usual. Customers can compare their February 2021 usage to the same billing period a year ago with information displayed on their bill or by using the SWEPCO app," he said.
All three companies said they will work to find a solution with any customer struggling to pay their bill.
CenterPoint customers who need payment assistance can visit CenterPointEnergy.com/PaymentAssistance or log into CenterPointEnergy.com/MyAccount to request a payment extension or arrangement.
SWEPCO offers a number of options, including extended payment plans. Customers can visit SWEPCO.com/Assist, call 1-877-446-7211 or contact the company through Facebook.com/SWEPCO or Twitter.com/SWEPCOnews.
Customers can reach SAEC's Texarkana office at 870-772-2743, the DeQueen office at 870-642-2737 or the Nashville office at 870-845-1313.