What is an Energy Cost Adjustment?
The Energy Cost Adjustment line item on your Craighead Electric bill (also sometimes called a Fuel Cost Adjustment) usually does not get much attention, except during times of high energy cost when it impacts your bill the most.
Craighead Electric Cooperative generates no energy on its own. All energy is purchased from our Regional Transmission Authority (or RTO) Arkansas Electric Cooperative Corporation (AECC). When the cost to generate that energy fluctuates an energy 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 adjustment is usually small, and there is no profit added. It is a pass-through cost from wholesale directly to the consumer.
What causes it to go up or down?
When the price of the fuel used to generate electricity goes up or down, so does the cost of that electricity. Geopolitical factors or extreme weather events can cause large acute swings in that cost. As our fuel mix moves from stable but polluting sources of energy like coal to volatile but cleaner natural gas and intermittent renewables these swings in energy cost may become larger.
What is being done to keep it low?
AECC has a diverse portfolio of different types of generation that fortunately reduces the cost impact of severe weather events and shortages. See AECC’s Balance of Power initiative to learn how their robust mix of energy sources hedges against dramatic changes in generation fuel cost. Learn more about AECC’s Energy Cost Adjustment
While the average residential electric bill will increase by about $14.13, from $112.45 to $126.58, the new rates will still compare favorably to other rural utilities in Arkansas and across the nation.
The new rates will affect each member differently. Here are some ways to minimize the impact of the proposed rates.
Due to historic winter weather in February resulting in an excessive increase in electric usage, Craighead Electric members will experience a higher-than-normal electric bill. One of the factors impacting their bill is the Energy Costs Adjustment.
Historic weather Historically cold weather swooped into North America in February breaking temperature records across the Midwest. We asked you to work together to conserve
Thanks to everyone for your patience and understanding as we deal with unprecedented circumstances regarding potential service interruptions. Please know that this could change at
All,
As you know, this historic cold weather event has put a strain on the South’s electric infrastructure. Due to the unavailability of natural gas, some of Arkansas’ gas-fired plants are out of service and others are offline due to emergency repairs. Wind and solar resources are typically unavailable in extreme weather conditions…
Members who elect to use third-party payment vendors to pay their electric bill may encounter unexpected problems from using these services.