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Mena Arkansas News covering Polk County and the surrounding area

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RMEC will supplement charges and spread fees over 9 bills

Submitted by Rich Mountain Electric  Cooperative

The historic winter weather event in February caused an unprecedented energy crisis for the utility industry which resulted in a large increase in energy usage and extremely high electric bills.

During the week of Feb. 14, Rich Mountain Electric requested that members voluntarily limit the use of electric service to ensure that electric service was not interrupted. This request was necessitated by a record demand and a potential issue with capacity in the Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO) regional transmission organizations (RTOs).

Unfortunately, the predicted crisis reached a dire situation on Tuesday, Feb. 16, as demand reached record levels and RTO capacity struggled to meet load requirements. On that date, Rich Mountain Electric’s wholesale generation provider, Arkansas Electric Cooperative Corporation (AECC) set an all-time peak firm load of 2,983 megawatts, which exceeded the previous peak of 2,760 megawatts set in January 2018. Although some electric utilities were forced to implement rolling outages, Rich Mountain Electric was able to avoid service curtailments.

AECC has a diversified portfolio of electric generation which includes coal, natural gas, hydro, wind and solar. During the winter storm, the demand for natural gas skyrocketed not only to produce electricity, but also for natural gas used in industries, businesses and homes. 

As demand increased, supply decreased causing natural gas prices to rise. The wholesale natural gas cost paid by AECC to generate the power is passed on to Rich Mountain Electric and the state’s other 16 electric distribution cooperatives. This cost is ultimately passed on to you as a fuel cost adjustment on your bill. This line item usually does not get much attention. However, during times of extreme weather, it can add several dollars to your electric bill.

Neither Rich Mountain Electric nor AECC earn any margins from these charges. The charges are purely market-driven and is a direct pass-through. We understand this is a financial hardship for our members and we are here to help.

Rich Mountain Electric has jointly worked together with AECC to lessen the impact of nearly $93 million in fuel cost adjustments incurred during the historic winter event. To minimize the financial impact on you, the fuel cost adjustment charge incurred during the winter crisis will be spread over nine electric bills. 

Additionally, the Rich Mountain Electric board of directors approved a plan to further assist our members by releasing up to $540,000 in margins to supplement your electric bill over the next nine months. Although this will impact Rich Mountain Electric’s year-end margins, as a local, member-owned cooperative, the board believes it is simply the right step to take to assist you, our member.

Rich Mountain Electric and AECC are working with state and federal officials to analyze costs that were incurred during the extreme winter weather to ensure that they are accurate. In the event that any fuel cost adjustment fees are changed by future federal or state legal action, any savings or refunds will be returned to you. 

We greatly appreciate our members for assisting in reducing the demand for energy during the unprecedented winter event. Your efforts made a difference in preventing service interruptions. We are truly grateful and thank you for being a member of Rich Mountain Electric. 

If you are having difficulty paying your electric bill, please call us immediately at 877-828-4074 to see what payment arrangements may be available to you. Rich Mountain Electric is offering delayed payment arrangements for up to 18 months.

Low Income Home Energy Assistance Program (LIHEAP) funds may also be available for those households that qualify. Funds are limited, so apply now! For more information and to apply, go to http://www.acaaa.org.

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