San Marcos Mercury | Local News from San Marcos and Hays County, Texas

The bills have come due for electricity LCRA bought at inflated prices during a colder-than-normal winter 

FROM STAFF REPORTS

When an unusually cold winter caused record peak energy demand in San Marcos and across the state earlier this year, the Lower Colorado River Authority buyers scrambled to purchase more electricity. They paid inflated, emergency prices.

Tom Taggart

Tom Taggart

Now the city-owned San Marcos Electric Utility owes nearly $4.9 million for its share of un-budgeted expenses under a provision of its contract with LCRA called a fuel and power cost recovery fee.

For the next 24 billing cycles, the city utility’s customers — both residential and commercial users — will start repaying the shortfall to LCRA through a monthly surcharge of .004 cents per kilowatt-hour. The charge will amount to about $4 a month for the average residential customer, city officials say. Commercial and industrial users will be hit with considerably higher dollar amounts proportional to their energy usage.

“The net effect was that the portion of bills to pay for fuel and power cost recovery was not enough to cover the actual expense,” said Tom Taggart, executive director of the city’s Public Services division which includes the electric utility.

According to a letter that will be sent to electricity utility customers starting next week, the polar vortex that plunged the state into prolonged freezing temperatures for much of two months forced LCRA to “purchase more power than forecasted at a much higher cost than expected.”

“The high demand caused price spikes for natural gas and power. The high demand and pricing caps raised by the Energy Reliability Council of Texas (ERCOT) that regulates the Texas electric grid, allowed prices to rise to levels higher than ever before and power amounts that had cost $30 under normal conditions traded as high as $5,000,” the letter states.

Had retail customers paid the real cost of electricity they used this winter, the average residential bill would have been $20 to $40 more during some months, Taggart said.

“This temporary charge is paying for power that customers actually used, and will be paid to LCRA as received. The gradual repayment will be easier for customers to afford than if each customer paid the full cost when the power was supplied,” Taggart said.

For more information, contact the City of San Marcos Utility Customer Services at 512-393-8383.

Downloads

Letter to San Marcos Electric customers on fee increase [pdf]

Presentation to city council on fee increase [pdf]



COVER PHOTO by SIMONAIR CHIU.

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