Working on a Cleveland Electric Illuminating account and their fuel adjustment clause has me scratching my head. The rate GR tariff shows a $0.0247/kWh fuel rider but I'm calculating it should be closer to $0.0189 based on their published fuel costs. Anyone else seeing inflated fuel adjustments from FirstEnergy subsidiaries? This particular account is getting hit for an extra $340/month just on this rider.
FirstEnergy Rate GR fuel adjustment seems fishy
Frank, I've seen similar issues with PSO here in Oklahoma. Their fuel adjustment mechanism seems to lag reality by several months, always in the utility's favor of course. Have you checked their fuel procurement practices? Sometimes they're buying power at premium rates during peak periods and passing 100% through to customers.
Connecticut Light & Power pulled something similar last year. Found they were including transmission losses in their fuel cost calculations that should have been separated out. The PUC made them refund $2.1 million to customers. Worth checking if CEI is double-dipping on losses or including non-fuel O&M costs in the rider.
You guys are onto something. JEA down here has been creative with their fuel adjustments too. Frank, check if they're using a weighted average cost that includes long-term contracts at above-market rates. The PUCO should have detailed fuel cost filings - demand the backup documentation for their monthly true-ups.
Rob that's exactly what I found! They're including a 15-year coal contract at $74/ton when spot prices are running $52/ton. The contract has a force majeure clause but they're not exercising it. Filed a complaint with PUCO yesterday citing imprudent fuel procurement practices. This could be a $50K annual issue for my client.
Frank, Georgia Power tried the same game in 2010. The PSC forced them to rebate customers when they couldn't justify above-market fuel purchases. Your PUCO complaint should reference the Georgia precedent - similar facts, utility had to eat the difference between contract and market prices. Good catch on that coal contract.
This is why I always dig into the fuel adjustment true-up filings. TVA here in Tennessee has been pretty clean on fuel costs, but I caught them including ash disposal costs in the fuel rider that belong in base rates. Every utility tries to game these adjustment clauses - they know most customers don't have the expertise to challenge them.
Update from Connecticut - CL&P just got hit with another fuel adjustment audit by PURA. They were including coal plant maintenance outage costs in fuel expenses. $890K disallowance. These utilities never learn. Frank, how did your PUCO complaint turn out?