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The original item was published from 12/16/2022 11:29:41 AM to 12/16/2022 11:31:34 AM.

News Flash

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Posted on: December 16, 2022



The Farmington Electric Utility System strives to provide reliable, low-cost energy to its customers. We are a public power entity, which means we have always been governed locally and owned by our customers.

FEUS is not driven to pay a return to stockholders. Our return is to you, the customer, to keep rates low.

On your bill, you’ll see a line item called Power Cost Adjustment (PCA). The PCA represents the cost of fuel to generate electricity and the cost to purchase electricity from the market. The PCA changes periodically when these costs exceed market forecasts.

Understand that changes in the PCA are not due to a change in your electric rates but due to the changing costs of fuel used to generate electricity and the cost to purchase electricity from the market. 

These costs, by necessity, are passed onto our customers. There is no “net revenue” or  overhead markup on these charges.   

We have been able to shield our customers from these dramatic changes in the global power market by utilizing designated cash reserves to offset some of these expenses. This has protected our customers from a rate shock.

Over the last few months, however, there’s been unprecedented volatility and price increases that leave us no choice but to increase the PCA:

1. Natural gas prices have reached the highest cost we’ve seen in the last 10 years. This is due to high liquid natural gas exporting and high demands. The attached graphic, “Natural Gas,” shows the trend of gas purchase cost compared to market forecast. 

2. There’s been a reduction in the amount of energy available on the market.

3. There’s been more electricity usage in the west.

As you can see from the second attached graphic, “Purchase Power,” FEUS’ adjustment to the PCA in November has not reached the balance point for the utility. This is requiring us to increase the adjusted cost by $0.015 per kwhr of consumption.

For the average residential customer, this change will be around $9 per month. 

We will continue to evaluate our ability to trim costs wherever we can in areas that do not affect safety and our long-term reliability. 

The PCA is under constant re-evaluation and will be lowered at the first prudent opportunity upon improvement in commodity pricing.

We appreciate your understanding regarding this matter. We’ll continue to keep you updated.

natural gas 

purchase power

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