Customers of Paragould Light Water and Cable will be getting a small break on the utility’s power cost adjustment.

At its March 17 meeting, PLWC’s board of commissioners voted to stretch out the added power cost adjustment (PCA) over three years instead of the previously announced one year.

At the February commission meeting, the board voted to permit the utility to recoup the extraordinary power costs incurred during the extreme cold from Feb. 12-19 through a separate PCA spread out over 12 months.

The new PCA is over and above the normal PCA, which is a rolling six-month average based on customer usage, added to the raw cost of the power used. The normal PCA over the last six months varied from $.00096 per kilowatt-hour (KwH) during the billing period Oct. 19-Nov. 18, 2020, to $.00210 per KwH for the Jan. 18-Feb. 18, 2021 billing period.

Stretching out the PCA over 36 months instead of 12 results in a lower added bill for the residential customer.

“We have about $7 million in reserves we ended up using to pay for the power we ended up having to buy,” said utility CEO Darrell Phillips on Thursday to explain the effect of stretching out the PCA. “This ‘storm PCA’ should come out to about half a cent more per kilowatt-hour,” he said.

That cost should add about $6.24 per 1,000 KwH, Phillips said. The normal cost per KwH (that is, before any PCAs) has ranged from 7.1 cents to 7.9 cents, between October 2017 and February 2021, based on residential bills during the subject period.

With the “storm PCA,” the electric bill for a residential customer would rise about $10 on monthly usage of 2,000 KwH. A residence using 2,000 KwH could therefore result in a bill for electricity (counting PCAs and rates per KwH noted above) ranging from $153.92 to $172.20. Without the “storm PCA,” the bills would range from $143.92 to $162.20.

Phillips said the “storm PCA” would expire at the end of 36 months. He added that industrial customers would have a separate, lower “storm PCA” lasting 60 months.

“This could happen again,” Phillips said, “so we need to be prepared.”

Utility Chief Operations Officer Brett Bradford added that using natural gas to generate electrical power through the utility’s generators during the February cold snap would not have helped with the cost of power. As previously reported, natural gas costs had exploded from $32 a kilowatt before the cold snap to $4,100 per KW.

“If we’d had a contract with FERC [the Federal Energy Regulatory Commission],” asked commissioner Dr. Mack Shotts, “could we have gotten access to natural gas?”

“The supply wasn’t enough,” Bradford replied. “There’s only one [natural gas] line into Paragould.”

He added that the only way to have cheap natural gas would be to buy it at low prices and then store it for later use. “But when we use it up,” Bradford said, “we’d still have to buy it off the market.”

The “storm PCA” is expected to rebuild the cash reserve total back to $10 million by the time it expires.

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