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Leesburg, Ohio | I know Ron's original question did not relate directly to electric utility companies, but others who responded have complained about fuel charges on their power bills.
I cannot speak for other utility companies, but i can explain what the "fuel adjustment" means on our local electric co-op bills.
At least in our case, the fuel charge is NOT some arbitrary, additional charge. It is the cost of fuel (coal).
Our energy provider, Buckeye Power, (a generation co-op owned by all the Ohio local electric co-ops) adjusts its price of energy each month to us based on the cost of coal for recent months. This is called a "fuel adder", which is designed to allow our statewide generation co-op to recoup the coal cost portion of the power bill at a fair rate, even when the cost of coal goes up and down in a short time period.
At the local co-op and member level, we have changed our billing system so that this "fuel adder" gets passed on through to each member. It is NOT some fake, additional charge. It is simply the cost of coal that you always paid for in your bill each month, but it was not separated out. Now it has its own line on the bill, instead of being just part of the total.
As the cost of coal goes up and down, that cost is simply passed on to the member. If coal goes up, the member pays a bit more that month. If it goes down, the member pays less that month. The charge is calculated based on a moving average, so the member will not get sudden large changes to their bill month-to-month.
Hope that helps.
Edited by KDD 4/5/2020 09:45
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When will "fuel adjustments" be removed?
