Home News-Free SWEPCO increases costs, impacting Minden resident’s utility bills

SWEPCO increases costs, impacting Minden resident’s utility bills

File Photo | Minden City Hall

Due to the recent severe winter weather that the south experienced, residents of the City of Minden will be facing an increase in their utility bills in the coming months. This is beyond the City’s control, as they are in a contract with SWEPCO and they chose to pass on the price increases onto the City. The City of Minden has no control over these increased costs.

While the typical bill from SWEPCO for the City’s power is roughly 1 million, the bill for the month of February was roughly 3.5 million. 

The City of Minden, not wanting to burden residents with a sudden high utility bill, will be paying this cost up front, and will instead spread the costs onto residents over a 26 month period. According to Russel Poole, Minden residents will notice an increase of roughly 16 dollars per 1000 KW on their utility bills during this 26 month period, as opposed to having one exceedingly high bill to pay. This increased charge will start taking effect in April.

“It’s going to raise the cost, probably an average of around 16 dollars per thousand KW. A  normal bill is about a thousand KW. So it’s really not going to be real noticeable, but there’s no way we could pass it on the way it was. So we decided to average it out in our PCA (Power Cost Adjustment),” said Poole.

This will allow the City to recoup it’s money for paying the cost upfront, while keeping the increase for resident’s monthly utility bills to a minimum.

“The recent record-breaking cold temperatures will likely lead to higher electric bills in the coming months. The City of Minden is working to minimize that impact on customers’ bills. The City of Minden is going to spread the extra cost of electricity incurred in our February billing from SWEPCO out over the next 26 months to avoid over burdening our utility customers,” a statement from the SWEPCO read.

The main factor contributing to the price increase is the cost of natural gas for the power plants rising due to increased demand during the severe winter weather. 

“During this record-breaking cold weather, the fuel costs to generate electricity increased substantially. SWEPCO is working with utility regulators in each state to minimize the impact of fuel costs on customers’ bills. The “fuel factor” used to calculate the power generation fuel cost on the bill is adjusted to make sure customers pay only SWEPCO’s actual fuel costs that are passed on to the City of Minden. SWEPCO is prohibited from making a profit on fuel costs,” the statement read.

Minden has a contract with SWEPCO that runs through 2028. The contract is a pass through of cost associated with SWEPCO generation. The City of Minden has no control over those costs.