Current outlooks suggest that Energy/Power Cost Adjustment (“ECA”) charges could be higher than historical average throughout 2022 due to the projected rising cost of electricity in the wholesale market. This projected increase comes from rising fuel prices for generation resources, primarily natural gas, and could result in higher-than-average bills throughout 2022 for our consumers.
We want to ensure that our consumers are aware of this potential increase and draw attention to Southern Pioneer’s ECA procedure. The ECA is not a new charge; Southern Pioneer implemented its use in 2009 to avoid general rate increases due to wholesale power fluctuations. This notice is to provide consumers with a review of the ECA policies practiced by Southern Pioneer. Consumers may direct billing questions to our customer service team at 800.670.4381.
What is the ECA?
The ECA charge is separate from base electric rates and is associated with the fluctuating costs of procuring wholesale power for Southern Pioneer consumers. Using an ECA helps Southern Pioneer avoid a general base rate increase with every change in wholesale power costs.
Southern Pioneer is a not-for-profit distribution utility and does NOT generate its own power; it purchases wholesale power directly from Sunflower Electric Power Corporation (“Sunflower”), a generation and transmission cooperative. Wholesale power costs fluctuate daily depending on Sunflower’s own generation resource fuel costs, operation costs, and the prices at which Sunflower buys and sells electric energy in the regional market. Southern pays Sunflower directly for the actual cost to procure wholesale power for its consumers. When the actual cost of wholesale power exceeds the amount built into base rates, there will be a positive ECA (or a charge) on your billing statement. When the actual cost of wholesale power is less than the amount built into base rates, the ECA will be negative and reflected as a credit on your billing statement. This ensures that Southern Pioneer collects no more and no less than the actual cost of wholesale power it pays to Sunflower every month.