Earlier this month the fuel adjustment charge on monthly bills had increased
City officials tried to make sure residents of Augusta were warned electricity costs were on the rise.
“We didn’t want people to be shocked,” City Manager Josh Shaw said. “That is why we sent out the notifications when we did.”
When reports of huge jumps in utility bills began to spread on social media, Shaw called a staff meeting to investigate.
City staff had realized earlier this month the fuel adjustment charge on monthly bills had increased from $.0122 to $.0318. This number which fluctuates each month is listed as the EFA on city bills. The EFA cost on each monthly bill is determined by multiplying the EFA ratio by the individual customer’s usage.
EFA is determined by a formula that adds the cost of the power the city purchases, the cost of natural gas and other consumables at the power plant and water treatment costs at the power plant and divides that amount by the amount of energy purchased by the city each month. The base cost of producing power – established by city ordinance – is then subtracted from that number to determine the EFA.
When the EFA is up, the bill will increase even if usage remains the same.
But if a resident’s usage is up, the cost for usage and a higher EFA charge will make the bill increase significantly.
This month’s EFA of $0.0318 is the highest the city has seen since September of 2008.
In addition to transmission cost increases from Westar – the private company that controls much of the transmission network for the Kansas Power Pool in eastern Kansas – the incredible spikes in natural gas costs due to the extreme and extended winter weather pattern over the past four to six weeks had a negative impact on utility bills nationwide.
Shaw said many people ask about the process of producing power and wonder why the city doesn’t just fire up the generators and create its own power.
“Based on last month’s numbers, it would have cost us $200 per megawatt to generate power ourselves and we were purchasing it from the power pool at $80 per megawatt,” Shaw said. “Generating our own would have only made the costs go up.”
He said these price increases won’t only affect residents of Augusta.
“Cities in the Kansas Power Pool are affected differently by price fluctuations,” Shaw said. “We are working on a study to show how our rates compare to those around us.”
When the city estimated the expected average monthly increase in costs in the notifications it sent out, the prices were based on 2013 average usage figures and EFA values.
Both the average usage and EFA value were significantly higher in February. But if the forces driving up the EFA this month rectify themselves as they typically do, the EFA value could drop to more normal levels as soon as next month.
“We are in a global economy and we are affected by many things,” Shaw said. “But most of these large jumps in month over month costs are due more to increased usage than the increase caused by Westar.”