Hello West Memphis Utility customers,
I would like to take a minute to explain what the Fuel Adjustment is and what is
causing the Fuel Adjustment to be so high.
First what is the Fuel Adjustment? It is the difference in cost between what is
already built into the rates and the actual cost for having electricity delivered to
West Memphis. For example, built into the rates is $.03/KWH of cost. For the
month of April, the cost was $.077805/KWH so that means WMU must collect an
additional $.047805/KWH to break even on its cost for having electricity delivered
to West Memphis. This number fluctuates every month based on cost.
What is causing this number to be so high compared to previous years. The major
source of generation for electricity is natural gas approximately 50% of electricity
nationwide is generated with natural gas. Natural Gas prices April of 2020 was
$1.74, April of 2021 was $2.66, and April of 2022 was $6.60. That is a 248 percent
increase over last year's cost. But hold on some of you say, don't we own some
portion of coal plants to offset that cost? The answer to that question is yes but
due to a company not performing up to expectations the coal needed to burn is not
being delivered at the rate needed to run the plants. So, a decision has been made
to stockpile the coal until the summer so that when everyone starts running A/C's
the plants will be able to run to maintain the reliability of the electric system.
I understand a lot of our citizens live on a fixed budget and I apologize for what this
is doing to your budget, but this is not something that our office personnel can
control or adjust so please take that into consideration when you are speaking with
The main way you can help yourself is controlling the amount of electricity you use.
Todd Pedersen, General Manager
West Memphis Utilities