Clay Electric Cooperative customers will see another increase in rates, beginning with their May billing cycles. The cooperative is implementing its second increase in one month because of soaring natural gas costs, which recently hit a 14-year high, according to Clay Electric’s website.
Natural gas is the fuel used to generate most of the electricity in Florida.
Customers using the industry household average of 1,000 kilowatts of power will now pay $129.90, a $6 increase. The additional amount each customer pays each month will vary based on how much electricity is used. The higher cost will be reflected in the Power Cost Adjustment (PCA) on customers’ power bills.
Along with the increase last month, Clay Electric has raised its rates by 9 percent this year.
“As a not-for-profit electric co-op, we work hard to maintain our costs and provide affordable electricity, but these large increases in the cost of fuel to generate power make this rate change unavoidable,” said Clay Electric General Manager/CEO Ricky Davis. “As soon as prices to generate power go down, your cooperative will lower the PCA.
Newsbreak reported last month that customers using the household average of 1,000 kilowatts of power would pay $123.90, an increase of $4. That initial increase started with the April billing cycles.
About 70 percent of the fuel used to generate power in Florida is natural gas, and it’s a sizable part of the fuel generation mix for the co-op’s wholesale power provider, Seminole Electric.
Davis said the increase in fuel and commodity prices are projected to increase the co-op’s electric generation costs more than $28 million for 2022. Natural gas has increased from $2.73/MMBtu (Metric Million British Thermal Unit) in April 2021 to more than $7.80/MMBtu in April of this year. MMBtu is a standard unit for measuring natural gas financial contracts.
Clay Electric has raised its rates 9 percent this year while natural gas prices have increased more than 250 percent in the past 12 months, according to the cooperative’s website.
“This latest increase in the PCA will not fully recover the estimated year-end increase in generation costs because markets are predicting natural gas prices will continue to climb and fluctuate in 2022,” Davis said. “Since 2018, this is one of only a few increases in the Power Cost Adjustment due to historically stable coal and natural gas prices.”
The PCA is a separate line item on each Clay Electric bill statement, which reflects the increases/decreases in the co-op's cost of power. The co-op's cost of wholesale power is now more than 70 percent of Clay's total expenses. The cooperative said it was “critical” that it recovers all of its wholesale power costs in its retail sales.
When the cost of power is greater than the amount included in the base rate, the PCA is a charge. When the cost is less, the PCA is a credit.
Clay Electric provides power to most areas of Clay County.