OG&E announced on Friday that it will lower its monthly Oklahoma fuel cost recovery effective with the first customer billing cycle in October. The average residential customer will see a reduction of $2.70 per month.
The company said the fuel cost reduction stems from its ability to reduce wind-related grid congestion by adding technology that better controls the flow of electricity on its transmission system. Other contributing factors include a milder than expected summer and lower costs for natural gas, which is used to generate electricity. In July 2017, the company raised its fuel factor by about $9.60 to recover approximately $100 million of actual and additional forecasted under- recoveries.
“Grid congestion along with higher than normal actual and forecasted weather contributed to the need to increase the fuel cost recovery in July,” said OG&E spokesman Brian Alford. “Since that increase, we’ve completed the addition of new technology that has improved the flow of electricity on the grid and subsequently reduced the financial impact of that congestion. We also realized a milder than expected summer.”
Alford added that the lower summer temperatures decreased customers’ energy use, which helped offset the need to purchase higher cost power. In addition, a slight decline in natural gas prices contributed to the lower fuel factor.
The cost of fuel used to generate power is passed on to customers without any profit to OG&E, and the amount appears as a line item on customer bills. The company periodically reviews its fuel cost to ensure that it is neither over- or under-collecting its fuel costs.