James W. from Lexington here. I'm working on a long-term budget forecast and trying to figure out how volatile fuel adjustment clauses really are month to month. Kentucky Utilities shows their FAC rate but I'm having trouble finding historical data to see the actual variation patterns. Do these things swing wildly or are they pretty predictable? Any insight on where to find historical FAC data?
Fuel adjustment clauses - how often do they really change?
Walt F. in Louisville. LG&E and KU file their FAC updates monthly with Kentucky PSC. The swings can be significant during extreme weather - I've seen 20-30% variations during polar vortex events when natural gas prices spike. For historical data, check the PSC's monthly FAC filings under each utility's case number. KU is usually something like 2019-KU-FAC-01.
Ed C. from Nashville jumping in. Tennessee Valley Authority doesn't have a traditional FAC since they're federal, but we see fuel cost impacts through their quarterly rate adjustments. James, you might want to look at natural gas commodity prices as a leading indicator - most Kentucky generation is gas-fired now so there's usually a correlation with a month or two lag.
Cora J. in Jackson, Mississippi. Our Entergy fuel riders change monthly and I've tracked them for three years now. Winter months are definitely more volatile due to heating demand impacting gas prices. Summer can spike too during heat waves when everyone's running AC and gas plants are peaking. Spring and fall tend to be more stable for planning purposes.
Thanks Walt, Ed, and Cora. Found the PSC filings Walt mentioned - you're right about those winter spikes! Looks like I need to build in more volatility during December through February. The historical data shows some pretty dramatic swings during the 2014 polar vortex that I hadn't accounted for.