Clarksdale Public Utilities’ fuel and transmission bills have increased the past year and those charges are being passed on to the customers.
CPU general manager Curtis Boschert is looking into whether or not the fuel and transmission charges are accurate. He talked about the matter during the open session but potential litigation strategy was discussed in executive session.
“We’ve spoken with some customers that have some concerns, in particular, about the fuel charge,” Boschert said.
When Boschert became general manager three years ago, he said the electric charge was not shown on the bills.
“In an effort to be more transparent with the charges that our customers pay, the fuel charge was placed back on the bill as a line item,” Boschert said. “There seems to be some confusion as to what the fuel charge is. What it is, it’s a reflection on the bill of the fluctuation of the cost that we have in purchasing electricity.”
The fuel charges are based on the cost of fuels needed to spin generators that create electricity – typically natural gas – and those fuel prices have gone up.
“Over the last six months, our fuel charge has increased dramatically,” Boschert said. “When you compare some of the years, like last year to this year’s August ’20 and ’21, there have been increases in the fuel charges as much as 112 percent. Those are dollars that we have to pay as a utility to get the electricity and then those are passed on to the customers. And it goes directly to pay our suppliers.”
Boschert said CPU does not keep any of the money customers pay for fuel charges. It goes directly to pay suppliers.
“The cost of natural gas has doubled as to what it was a year ago and much of the electricity that we have or received is generated through gas,” Boschert said. “Those charges for the extra gas are passed to us.
“Also, over the last years, the cost we are paying for transmission, which is the fees, and those transmission costs are the cost that is incurred to get the electricity to us over the big line so to speak and those charges are reflected in the fuel charge. Just like the other, that’s passed through that we pay directly to the supplier that then goes to the regional authority. Those fees in some months have been as much as 50 percent higher than they were a year before.
“So we have no control over those costs. Our rates are the same as they are for the base electricity, but the fuel charge is the difference that we don’t have any control over.”
Boschert told the board he wanted to discuss legal options to see if the fuel and transmission bills CPU was receiving was justified under the current contracts.
“I would say all of us here, we take seriously our position in the community with the Clarksdale Public Utilities and the effect that has on our customers,” Boschert said. “We have to pass those charges on, but we also want to insure those charges are justified and something that is a legitimate charge. I think we owe it to CPU as an entity and to our customers to do that.
“We don’t want our customers paying more than they should have to. We’re sensitive as a commission to what our customers have to pay.”
Boschert said, at the very least, he expects to be able to report at the first October meeting that the process of asking for information has started.
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