Beginning with the January 2021 billing cycle, Public Service Company of Oklahoma (PSO) will increase the fuel cost adjustment on customer bills to reflect higher prices for natural gas and purchased power.
The adjustment is necessary to align the costs that PSO pays to purchase fuel for its power generating stations with the amounts that are charged customers for those purchases. Because fuel costs vary from predicted costs, the factor must be adjusted – up or down – to make sure customers pay only the fuel costs that PSO actually incurs – no more or less.
A significant driver of the increase is lower prices in both the Southwest Power Pool and natural gas energy markets in late 2019 that have now shifted upwards. Because these fuel costs have been higher than predicted, customers have been paying less than the actual cost PSO incurred to provide electricity to them.
“We understand any change to rates can be concerning for customers and we are continually monitoring fuel costs to assure customers are paying no more or less than the actual costs,” said Matthew Horeled, PSO Vice President – Regulatory and Finance. “At the beginning of 2020, fuel costs were at historically low levels. Now, as natural gas prices continue to rebound into 2021, we’re beginning to reduce the gap between today’s actual fuel costs and where they were prior to 2020.”
For a typical residential customer who uses 1,100 kWh of electricity a month, the fuel cost increase will amount to approximately $5.00 a month.
PSO’s fuel factors will be reviewed again in the spring of 2021 to determine if further adjustments are necessary. PSO is prohibited from making a profit on fuel costs.
PSO offers programs and information to help customers reduce the amount of energy they use. Customers looking for information on how to save money on their electric bills are encouraged to visit PSOklahoma.com/save.
About PSO
PSO, a unit of American Electric Power (Nasdaq: AEP), is an electric utility company serving more than 557,000 customer accounts in eastern and southwestern Oklahoma. Based in Tulsa, PSO owns approximately 3,800 megawatts of generating capacity fueled primarily by natural gas. It also maintains and operates 22,000 miles of distribution lines and 3,700 miles of transmission lines. PSO is one of the largest distributors of wind energy in the state. Find news releases and other information at www.PSOklahoma.com. Connect with us on Facebook, Twitter and Instagram @PSOklahoma.