The Arkansas Leader

First Electric hikes rates

Utlity is raising prices to pay for $93 million in higher costs caused by record February winter storms.

Area residents who get their electricity from First Electric Cooperative can expect higher bills over the next nine months as the utility looks to recoup $93 million due to Arkansas’ winter storms, officials confirmed Thursday.
The $93 million additional charge is the difference between the normal price of natural gas and what it shot up to because of the snowstorms, higher demand and shortages in February.
First Electric operates in 18 counties in the state.
The utility has worked with Arkansas Electric Cooperative to spread out the $93 million difference over the course of nine months to “minimize the financial impact” on customers.
Tonya Sexton, a spokeswoman for First Electric in Jacksonville, said the local co-op budgeted $13 million to cover extra fuel costs for the year.
“We spent $14 million just in February,” she explained. The utility, she said, is trying to lessen the burden by spreading out the added charge over nine months.
Sexton explained that the charge is tied into usage, so the more a household or business uses, the higher the added rate will be.
“We’ve got some warmer month ahead and that means less usage and that will help customers,” she said.
She added the rate charge is a pass-through, meaning the utility is only recouping the extra amount it paid for natural gas.
The utility will compare the base rate for fuel costs and the actual fuel costs during the record-setting February storm, and the cooperative’s customers will be charged the difference, according to the First Electric.
“Due to historic winter weather in February resulting in an excessive increase in energy usage, First Electric members will experience extremely high electric bills,” the company said in a news release. “As demand increased, supply decreased causing natural gas prices to rise. That cost paid by AECC to generate the power is passed on to us and ultimately to the cooperative member as an energy cost adjustment on the bill.”
The utility says it is just recovering costs and will not profit from the extra charges.
Besides the add-on charges, the Arkansas Public Service Commission has set a target date of May 3 to lift the moratorium to suspend all disconnections of electric services per the state of emergency order issued by Gov. Asa Hutchinson. This means First Electric will resume disconnection of electric services for non-payment.
Customers who are having a hard time paying the larger electric bills should call First Electric at (800) 489-7405 to see what payment arrangements may be available.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.