Outages and gas demand behind December energy bill spikes in Fredericktown
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Nationwide demand in natural gas also played role
The substation in downtown Fredericktown, which saw unusually high electric bills in December. Matt Morey, Democrat News
Energy prices in Fredericktown reached unusual highs for residents in December from a combination of state resource outages and pricier natural gas backups, according to city and energy officials.
Fredericktown resident Jess Barton said her December utility bill exceeded $300, despite being away for work more often. She expects it typically to be around $150-$200. Like many residents, she saw the cost of her “PPA” five times higher—at $55 in December—than in November.
“I think it’s insane, honestly,” Barton said.
PPA stands for Purchase Power Agreement, and can recoup the difference between what the city budgets for energy in a given month and how much they are actually charged, Fredericktown Assistant Clerk Ashley Baudendistel said.
Fredericktown draws its power from the Missouri Public Energy Pool (MoPEP), not Ameren, as many have said.
The power pool is the system of public energy produced in various Missouri cities. They produce from a variety of sources like: solar, coal, hydro and natural gas, like Fredericktown. There are 35 member cities who draw from MoPEP.
Baudendistel explained that the PPA costs were so high because a couple of MoPEP sources had outages in recent months.
Baudendistel said two energy plants in November had outages. The sudden expense to take them offline and repair may have caused an increase in the city’s charges to the MoPEP.
“They weren’t getting any revenue off of those because they weren’t selling electricity from them,” Baudendistel said.
The power pool map shows about 20 different projects owned by the Missouri Public Utility Alliance (MPUA). Most areas in Missouri produce solar energy. An associate from MPUA told Democrat News that the proximity of the energy doesn’t necessarily mean the city will use it though.
Baudendistel said a PPA is larger based on how much under budget they went at a kilowatt per hour rate.
However, outages are typical this time year, MPUA Chief Markets Officer Rebecca Atkins said in a phone call. She said MPUA may buy electricity from Southwest Power Pool, their larger energy network covering several states.
Costs of natural gas have increased across the country, affecting SPP prices, Atkins said. This may explain why the PPA is higher this year even among the expected winter outages — they used backup sources.
A map of some of the energy sources from Missouri Public Energy Pool (MoPEP), which provide Fredericktown with electricity. From mpua.org
“The way the market works is the marginal is what sets the price,” Atkins said.
U.S. Energy Information Administration charts show that demand and exports have increased for natural gas.
Baudendistel said a customer’s PPA scales to how many kilowatts per hour they used, so someone like Alexis Figge, who paid $500 in December — over twice as much as normal — had a $130 PPA.
Baudendistel said she’ll have more information for Monday at the city board meeting. But some of the increase could be attributed to using extra heat in the winter, which many may have forgotten was much colder at the beginning of the month.
On social media, many targeted Ameren for the issues. While Ameren prices hiked across the state due to state regulation changes, Baudendistel said the city only uses Ameren transmission lines, not energy resources.
“It is something we have been correcting for years to try and get citizens to understand we don’t purchase our power from Ameren, and that we only use their transmission lines,” she said.
Baudendistel said their Ameren transmission line fees have been steady for two years, despite the company’s estimate of a $14 increase after favorable legislation last summer.
Other members of MoPEP might be expected to see an increase in electric bills in December, the closest to Fredericktown being Farmington and Jackson. Other adjacent cities, like Ironton, didn’t see a dramatic rise in bill usage.
Baudendistel said she was still gathering information from MPUA to talk about at the next board meeting on Monday, Jan. 12 at 5:30 p.m. at the Fredericktown Police Department.
But when MPUA got real repair prices for their two offline energy sources, they were lower than expected, Baudendistel said.
“So there should be cheaper prices (in January),” she said. She verified on the budget that this was already the case.
[This edition of Democrat News will be printed before that board meeting, but we will update the story online with more relevant information, if necessary.]
