Oklahoma Gas & Electric to reduce monthly fuel cost recovery
Oklahoma Gas & Electric Company (OG&E) recently announced that it would reduce its monthly fuel cost recovery because of improved technology and mild summer temperatures.
The average residential customer would see a reduction of $2.70 on their monthly bills, effective with the first customer billing cycle in October.
Using new technology to better control the flow of electricity on the company’s transmission system and reduce wind-related grid congestion enabled OG&E to reduce fuel costs. Lower natural gas prices and a summer with milder temperatures than expected also contributed to the reduction.
Grid congestion and unexpected weather led OG&E to increase its fuel factor by approximately $9.60 in July to recover approximately $100 million of actual and additional forecasted under-recoveries.
“Grid congestion along with higher than normal actual and forecasted weather contributed to the need to increase the fuel cost recovery in July,” OG&E spokesman Brian Alford said. “Since that increase, we’ve completed the addition of new technology that has improved the flow of electricity on the grid and subsequently reduced the financial impact of that congestion. We also realized a milder than expected summer.”
OG&E passes the cost of fuel to generate power to customers without making any profit. The amount appears on customer bills as a line item. The company regularly reviews its fuel cost to ensure that it is collecting an appropriate amount for fuel costs.
“When we increased fuel recovery in July, we said that we would review the fuel factor in the fall to determine if adjustments were needed,” Alford said. “In this case, we found that we would likely over-recover fuel before the next scheduled fuel update in April. Rather than wait nearly eight months and significantly over-recover, we are passing the benefit to customers beginning in October.”
