Electric costs increasing in Wallingford for next six months

Electric costs increasing in Wallingford for next six months

Record-Journal


WALLINGFORD — The Electric Division will bill residents more for electricity in coming months as a result of a mid-year recalculation of the power cost adjustment factor.

The Public Utilities Commission voted last week to approve a recalculation of the power cost adjustment, or PCA, from January to June. The Electric Division performs a recalculation of the PCA every six months in January and June to, in part, account for changes in the forecasted cost of wholesale power.

After the recalculation, residents will pay 7.4 percent more for electricity monthly from January to June. A resident who uses 750 kilowatt hours of power, considered average, will pay just under $7 more per month. The PUC will again recalculate the power cost adjustment in June.

The adjustment reflects fluctuations in the costs of wholesale power, which the Electric Division purchases from Energy New England.

The PCA is measured in a positive or negative fraction of a cent paid per kilowatt hour of energy used. It is multiplied by the number of kilowatt hours of energy a customer used to determine the additional charge. The charge is included on each monthly electric bill, said Public Utilities Director George Adair.

The PCA for the next six months was increased about nine-tenths of a cent to $0.006695. This amount is the same for both residential and commercial customers, he added.

Adair said the reason for the PCA increase is twofold. The first reason is an increase in the projected cost of energy in the coming months. The other reason has to do with compensation by the Electric Division for an over-collection of electric costs in past months.

The PCA is adjusted for every six-month period based on how much the Electric Division over- or under-collected in the previous six month period. The over- or under-collection is caused by a disparity in the projected PCA and the actual cost of power. While the Electric Division tries to match the two as close as possible, there is usually a disparity, Adair said.

When the town over-collects in a given period, it lowers the PCA charge in the subsequent six months as a way of “refunding” customers, he said. If the town under-collects in a six-month period, the PCA is similarly raised in the following period to recoup costs.

Of the 7.4 percent bill increase, Adair said, about half is caused by the pending increase in power costs, and the other half is caused by the difference in collection seen in the last two periods.

As a result of the PCA adjustment, a customer using 750 kilowatt hours of energy will pay $100.58 per month, about $7 more than the previous period’s bill of $93.63.

Adair said the $100.58 is more in line with amounts billed in previous periods and described the cost as a return to the norm.

From January 2015 to October 2016, the average residential customer was billed about $98.72.

The PUC has the option to use cash reserves to offset potential increases in the PCA every six months. Adair said the Electrical Division recommended the PUC not use cash to offset this increase, and instead save the cash reserves to offset larger bill increases coming in July due to expected increases in the cost of wholesale power. Adair could not provide an estimate of how much the Electric Division currently holds in cash reserves. He said the reserves are expected to be about $8.48 million by the end of June.

Members of the PUC could not be reached for comment.

The cost increase comes one month after the PUC approved a new three-year rate plan that will include rate increases for both residential and commercial customer. The new rates will take effect July 1.

mzabierek@record-journal.com 203-317-2279


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