Town Talk: Utility billing commodity adjustments explained
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New Ulm Public Utilities values its customers, and understanding your utility bill is as important to us as it is to you. Parts of the bill that we sometimes get questions on are the Energy Acquisition Adjustment, the Purchased Gas Adjustment and the Fuel Cost Adjustment.
New Ulm Public Utilities buys its electricity and natural gas off the commodities market to supply our customers. Just like any market, such as corn, gold or oil, the price can fluctuate on a month-to-month basis. The Utility uses the adjustment to reconcile the market price to the base price in our published rate for the electric, natural gas and steam utilities. By making this adjustment, the Utility has adequate cash to pay for the electric and natural gas commodities, and the customer avoids having a base rate adjustment each year.
The Energy Acquisition Adjustment (EAA) is calculated for electric rates on an annual basis. The EAA is calculated using the projected fuel and purchased power costs for the year. The energy charge is increased or decreased by the projected annual cost of energy purchased from our suppliers. Our base commodity charge is 5.849 cents per kilowatt-hour (kWh). The 2019 proposed Energy Acquisition Adjustment of 1.517 cents per kWh is added to the base commodity charge, resulting in an expected energy cost of 7.366 cents per kWh.
The Utility reserves the right to modify the adjustment at any time during the year if the actual purchased rates per kWh vary significantly from the estimate. This rate is projected to increase by 0.261 cents from 2018 to 2019. New Ulm customers have not seen an increase in their electric rates since September of 2012, and the Energy Acquisition Adjustment saw a reduction in 2015 to 2014 levels.
Natural gas and steam adjustments
The natural gas and steam adjustments are calculated on a monthly basis. These adjustments are handled similarly to the electric adjustment. The Purchased Gas Adjustment calculation is based on the monthly purchased gas from our supplier which includes commodity and transportation costs. The usage charge for all gas billed to our customers is increased or decreased by the amount that the actual purchased gas cost exceeds the base rate of 61.42 cents per centum cubic feet of gas. The natural gas rates have not had a rate increase since February of 2006. However, there have been negative and positive purchased gas adjustments on a monthly basis.
The steam Fuel Cost Adjustment is handled the same way as the gas adjustment and is based on the purchased gas pricing from our supplier, since gas is the commodity used to produce steam. The steam rates were last adjusted in February of 2013.
New Ulm Public Utilities strives to maintain reliable service with stable rates for our customers. If you have any questions with regard to these adjustments, please call our offices at 507-233-2110, Ext. 400.