by Mark Cheffey
Palmyra utility customers are feeling the ripple affects of the polar vortex that all but crippled Texas’ electrical grid in February.
Palmyra’s Board of Public Works issued May bills that included a $7 extra line-item charge per meter.
That charge will be assessed to all electricity users in Palmyra for the 24 months in order to cover higher power costs incurred as a direct results from the affects of Winter Storm Uri that brought freezing temperatures to most of Texas where the state’s electrical grid was ill-prepared for the onslaught was pushed to the brink.
The ripple affects were wide spread and resulted in the city of Palmyra receiving a power bill more than $300,000 higher than normal.
Abell said he and the BPW were “shocked and surprised” by the bill, just as other cities across the state were.
Abel explained that, with the extended, extremely low temperatures, wholesale natural gas and electricity prices skyrocketed as consumer demand quickly outpaced limited supplies in mid-February.
The demand for energy coupled with all types of electric generation being unable to produce as much, led to prices being up to 200 times the amount they are normally.
And, yet, Abell said, it could have been worse, even much worse.
For one thing, Abell said, the power bill could have been higher, with it being much worse in Texas.
At one point, Missouri was facing the possibility of initiating rolling blackouts in order to prevent damage to the state’s electricity grid. Fortunately, it didn’t come to pass.
“The potential crisis of the electric grid failing in Missouri was prevented through conservation efforts to lower demand,” Abell said. “However, paying the wholesale electric supply costs is part of the emergency that still lingers with us.”
Palmyra receives electricity through the Missouri Public Utility Alliance as part of a wholesale energy buying collective of 35 cities.
Abell said Palmyra, along with other hometown utilities, are working through MPUA to advocate with electric market regulators, agencies, and legislators to hopefully see some price relief in the future and to put measures in place to make this type of event less likely to happen in the future.
To pay the high wholesale bills on time, the group of collective cities decided to use some of their reserve money to pay the high bills.
According to Abell, the rest of the higher costs are going to be paid back over time through a low-interest, revolving line of credit for up to 24 months.
“For our community, there needs to be something in place to recover the costs of the February energy emergency,” Abell said. “On your bill that included the February electric usage, you were charged your normal electric rate.
“On your May utility bill, you will see an extra line-item charge for $7 per electric meter per month, for 24 months.
“This will go towards paying down the extra money charged during the time that electric supplies were limited, demand was high and wholesale market costs were way beyond what we normally pay.
“If there is any regulatory or legislative action to address the cost of electricity during the energy emergency, we will report back to the board and city council and make any adjustments needed to this extra payment on your bill.”
Abell said he his hopeful the state of Missouri will come to the rescue in helping cities like Palmyra pay for the extra utility costs.
According to the Missouri Public Utility Alliance, many members of the state legislature have urged Gov. Mike Parson to establish an emergency fund, set aside to allow local municipal utilities impacted by the recent weather events in February to apply for zero percent interest loans.
The requested $50 million loan fund would allow for citizen-led utilities to borrow against the fund for up to five years.
“The severe winter storm impacted communities from all corners of the state,” said John Twitty, president and CEO of the MPUA.
“This vital set-aside would allow local hometown utilities a resource to draw upon and ease the short-term impact on customers over time.”
“During the crippling weather of Winter Storm Uri, Missourians throughout the state relied on their hometown, citizen-led utilities to maintain delivery of safe, affordable and reliable natural gas and electric service,” said State Rep. Jeff Porter. “But increased energy demand paired with natural gas supply constraints significantly influenced the price of wholesale natural gas and electricity delivered to these consumer-owned utilities.”
“Utilities plan for market fluctuations, natural disasters and reliability of services by implementing redundancy. No risk scenario would have prepared any entity for the electricity and natural gas market prices realized during the weather event,” said Stephanie Wilson, general manager of Macon Municipal Utilities. “Now communities are burdened not only with paying suppliers, but also how to handle the impact to customers.”