LAWTON – Beginning with the January billing cycle, Public Service Company of Oklahoma will raise the fuel cost adjustment on customer bills to reflect higher prices for natural gas and purchased power, the utility company said in a news release.
The adjustment is necessary to bring the costs that PSO pays to purchase fuel for its power generating stations in line with the fees that customers pay for those purchases, according to the news release. Because fuel costs vary from predicted costs, the factor must be adjusted–up or down–to make sure customers pay only the fuel costs that PSO actually incurs.
One reason for the increase is lower prices in both the Southwest Power Pool and natural gas energy markets in late 2019 that have now shifted upwards, according to the news release. Because these fuel costs were higher than expected, customers have been paying less than the actual cost PSO incurred to provide electricity to them.
“We understand any change to rates can be concerning for customers, and we are continually monitoring fuel costs to assure customers are paying no more or less than the actual costs,” said Matthew Horeled, PSO vice president of regulatory and finance. “At the beginning of 2020, fuel costs were at historically low levels. Now, as natural gas prices continue to rebound into 2021, we’re beginning to reduce the gap between today’s actual fuel costs and where they were prior to 2020.”
For a typical residential customer who uses 1,100 kWh of electricity a month, the fuel cost increase will amount to approximately $5 a month. PSO’s fuel factors will be reviewed again in the spring of 2021 to determine if further adjustments are necessary. PSO is barred from making a profit on fuel costs.