After a review of the financial impact of market energy costs associated with Winter Storm Uri, the Pioneer Electric Cooperative, Inc. (“Pioneer Electric”) Board of Trustees directed management to present a rate (billing) adjustment to members. The proposed adjustment will cover costs Pioneer Electric incurred during February’s storm. The proposed adjustment will see an approximate $8 per 1,000 kWh of members’ February usage as a recovery charge on future billings. This charge would be in addition to members’ normal monthly bill. The board will discuss and vote on this adjustment during the regularly scheduled meeting on April 28, 2021. If passed, the recovery charge would be implemented in May of 2021 for a period of 36 months.
“Winter Storm Uri was a ‘perfect storm’,” said Steve Epperson, CEO of Pioneer Electric. “The frigid temperatures not only increased the demand for electricity but also significantly constrained the supply of natural gas from fields and pipelines; this gas is needed to fuel generation. Compounding that, wind generation was unavailable through most of the event.”
During the week of February 15, Pioneer Electric, and other utilities across the Midwest, experienced an increased energy demand coupled with severe constraints on available generation resources. These issues caused the market price for electricity to skyrocket. Pioneer Electric experienced a $17-20 million addition to its February power bill.
“The problems we faced during the storm were not unique to southwest Kansas,” said Epperson. “This was an event that had an effect on the Southwest Power Pool’s (SPP) entire footprint, which covers states from the Texas Panhandle to the Canadian border.”
The Southwest Power Pool (SPP) is a regional transmission organization that provides balancing and reliability coordination services, as well as implements the wholesale energy market.
“We understand members may have concerns regarding their upcoming electric bills,” said Epperson. “Our plan to amortize these costs over a 36-month period will help us stand between our members and high electric bills.”
To avoid passing expenses accumulated by Pioneer Electric to members in one large billing, Pioneer Electric’s management proposes to amortize (spread out) costs to members over a 36-month period. If approved by the board, the new billing adjustment will be reflected on members’ bills as a “Feb. 2021 Storm Recovery Charge”.
Any credit or additional expense towards the February event will be allocated to all members and reflected on subsequent bills. Members with questions or concerns regarding upcoming bills may contact Pioneer Electric’s office during regular business hours (Monday – Friday, 8 a.m. – 5 p.m.) at 620-356-1211.
