Lyntegar Electric Cooperative sent out letters to its member owners last week regarding Winter Storm Uri, and possible rate changes.
Winter Storm Uri had a devastating impact on everyone in the State of Texas, especially the electric cooperative systems. I want to share with you some information that may help you estimate your Lyntegar Electric Cooperative, Inc. energy cost for this year and moving forward.
First, your base rate is not changing. Where you will see a change is in the Power Cost Recovery Factor (PCRF), referenced each month on your bill. This charge is expected to increase 10 to 15 percent in comparison to last year. The PCRF reflects the cost of fuel, specifically natural gas, and purchased energy required to provide electricity to you each month. If we had charged our members the true cost fo the wholesale component for February, our PCRF would have been $0.69-2/kilowatt hour (kWh) plus our base rate. To put that into prospective, if you used 1,000 kWh that month the PCRF would have added $665 to your bill. The PCRF is not retained by Lyntegar. It is sent directly to our wholesale power provider, Golden Spread Electric Cooperative, Inc. (GESC).
GSEC took the necessary steps to protect their member cooperatives as best they could, but no one was prepared for natural gas prices that reached $1,250 MMBtu, compared to a normal price of $2.50 MMBtu. This was a result of natural gas wells freezing and compressors being shut down during the rolling blackouts, therefore causing a shortage. GSEC’s Mustang Station and Antelope-Elk Energy Center were directly affected by this because they were not able to run without a steady natural gas supply and when they could, the prices were extremely high.
A current estimate of GSEC’s actual February energy cost is $330 million. The total energy cost for GSEC for 2020 was approximately $200 million. Lyntegar’s share of the February cost is approximately $30 million, compared to the $40 million we spent for the entire year of 2020.
Lyntegar is financially sound and our Board is making decisions that will keep us that way. They do not expect our members to absorb these costs in one month, so they will spread them out over a period of time. We will have more information about the entire situation over the next two or three months and I will send another letter after the Board determines the approach that will be used.
We are working with state legislators, GSEC, the two power pools we operate in, and the appropriate state agencies to do all we can to make the necessary changes needed. We will always have to deal with Mother Nature, so we must focus on the things that we can control to keep this type of event from happening to our members again.
If you have any questions, please call the office at 806-561-4588 and speak with our Member Services staff. We want to be as transparent as we can through this process, but know we are working to protect you, our member.
As always, I remain