Slight rate increase more than offset by multiple months of credits, fuel refund
Beaumont, Texas – Entergy Texas
residential customers will end 2012 with an average electric bill about 5
percent lower than last year.
That’s because although the Public
Utility Commission of Texas’ final ruling on the base rate case Entergy Texas
filed late last year called for a small increase to residential customer bills,
that increase will be more than offset by a series of credits and a fuel cost
refund.
The PUCT allowed Entergy Texas a
retail base rate increase of $27.7 million per year. That translates into an
increase of $5.94 per month for the average 1,000 kilowatt-hour residential
bill. Customers, however, won’t see this increase until next spring.
That’s because during November, when
the rate increase is scheduled to go into effect, customers will also receive
the first of three months of a production cost credit. The credit is called a
Rough Production Cost Equalization credit and will lower bills by $13.85 in
November, $12.74 in December and $10.63 in January. For example, in November
2011, the average bill was $114.31. But this year, that bill will be $108. When
November and December are averaged together, monthly bills will be $5.76 less
than the last two months of 2011.
But that’s not the only bill-dropping
news for customers.
Entergy Texas has also filed with the
PUCT to give customers a fuel refund totaling $77.9 million. That translates to
a per residential customer total refund of $68. The company plans to begin the
refund in January; however, the number of months over which the refund will be
divided has not yet been decided by the PUCT.
Both the credits and the upcoming
fuel refund reflect changes in the cost to make electricity for customers.
The credits are a result of the
agreement Entergy Texas has with the other companies in the Entergy Corporation
system of electric distribution companies. This includes utilities in Arkansas,
Louisiana and Mississippi. The agreement calls for the cost of producing
electricity to be “roughly equal” among the companies. That means if it costs
more to produce power in one than in another, the Entergy utility in the state
with the lower cost must make payments to customers in the higher-cost states.
The credits planned for Southeast Texas reflect payment from Entergy’s Arkansas
subsidiary.
The fuel refund reflects lower than
anticipated costs for the fuel used to generate electricity. Regulations in
Texas require Entergy Texas to set a fixed fuel factor that stays on bills for
six months at a time. The factor is based on market costs for fuel at a certain
point in time and determines the fuel charge that customers see on bills. The
company makes no profit on fuel. Prices for fuel, however, change frequently. If
the fuel factor proves to have been set too high, customers will receive a
refund on their bills.
Entergy Texas provides electricity to
more than 400,000 customers in 27 counties. It is a subsidiary of Entergy
Corporation. Entergy is an integrated energy company engaged primarily in
electric power production and retail distribution operations. Entergy owns and
operates power plants with approximately 30,000 megawatts of electric generating
capacity, including more than 10,000 megawatts of nuclear power, making it one
of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8
million utility customers in Arkansas, Louisiana, Mississippi and Texas.
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Entergytexas.com
Twitter: @EntergyTX
