Winter Storm Uri
February’s history-making frigid temperatures led to historic conditions across the electric grid. The high demand for natural gas caused a spike in natural gas prices. Much of the generation within the Southwest Power Pool (SPP) runs on natural gas, as do several of Sunflower’s electric generating units. Before the recent cold weather, electric providers had access to natural gas ranging from $2.75/mmBtu to $4.15/mmBtu. From Feb. 13-18, the price ranged from $339/mmBtu to $999/mmBtu.
Unfortunately, February’s increase in natural gas costs means higher upcoming electricity bills for our consumer-members. Western Cooperative will not profit from this spike in gas prices. Each month, fuel costs are billed in the form of an Energy Cost Adjustment (ECA) charge. You may not have noticed this cost because it typically varies only tenths of cents from month to month. The dramatic jump in February fuel pricing, which at times was 300x higher than days just before the extreme weather event, will cause a significant increase in the ECA to recover fuel costs.
Western Cooperative remains dedicated to helping our member-consumers get through this extraordinary weather event. We are in the process of analyzing the data and looking at several options to lessen financial impacts on our members.
The first step to minimize the impact on the families and businesses Western serves was an open meeting at our WaKeeney office on March 22. This meeting did not change the current rate schedules, instead, they approved a new tariff rider that will allow these extraordinary costs associated with Winter Storm Uri to be spread over 24 months. See approved Rider below:
How much will my bill go up?
The impact on your bills will be proportional based on kWh usage during February. In the coming days, you will receive a letter from Western that will give you your individual overrun costs. Western Cooperative will spread these extraordinary costs across 24 months to lessen our members' financial burden. If the consumer-member wants to pay off their balance at any time, they will be able to so by calling the Western Co-op office during business hours at 785-743-5561 or toll-free at 1-800-456-6720.
Who is responsible for these price increases?
Winter Storm Uri was an extraordinary event where natural gas demand far exceeded the supply, causing fuel prices to rise astronomically. Since our power supplier uses natural gas to run many of their generating assets, these fuel and market settlement costs are a pass-through variable cost that must be recovered by all utilities impacted.
Winter Storm Uri is being investigated at the legislative level by the Kansas Corporation Commission. In addition to state and local investigations, North American Electric Reliability Corporation (NERC), Southwest Power Pool (SPP), and Electric Reliability Council of Texas (ERCOT) have started investigations to determine what happened.
Who will be affected by the rise in natural gas fuel costs?
These additional costs are not a Western-specific problem. Gas and electricity utility consumers across the state and region will have to pay an increase to compensate for the market prices. All Western consumers will be proportionally billed based on kWh sold in February. We hope to lessen the impacts as much as possible for our consumer-members by spreading those costs out over time.
What can I do if I have difficulty paying my bills?
Western will continue to work with consumers to minimize impacts and work with our members. By waiting until July to apply any additional costs to bills, Western hopes to give our members plenty of time to prepare for the higher bills.
The Western Cares program is available for those who need financial assistance. Applications can be found at westerncoop.com/western-cares. Additionally, Kansas' LIEAP (Low Income Energy Assistance Program) has extended the benefits and deadline to May 28. For more information or to apply for assistance visit, http://www.dcf.ks.gov/services/ees/Pages/EnergyAssistance.aspx For more state-endorsed Utility Assistance programs, visit the Kansas Corporation Commission website at https://kcc.ks.gov/consumer-information/utility-assistance-programs
President and CEO of Sunflower Electric Power Corporation Stuart Lowery Explains Winter Storm Uri
Sunflower Electric President and CEO Stuart Lowry